How to Write Marketing & Sales Plans for Prepress Companies By Don Belval, Pilothouse Planning Group The Way it Once Was... Once, prepress companies and their clients formed special bonds of trust. Customers didn't get involved in the printing process (except for approvals), and they didn't particularly want their prepress company or printer in their creative process. When a company provided a quality product on time...over and over...the client developed a certain confidence that his or her work was in good hands. Call it 'peace of mind'. It had value. Clients seldom questioned pricing, and often refused to consider other companies they didn't know well. It's different now. Clients are in the work process. They create page files, specify colors electronically...even scan their own images. Yet, because they’re often new to the industry, they tend to be less knowledgeable about the prepress work process. Is that good news...or bad? It depends. If your company is flexible and responsive enough to meet these new market conditions, and if you know how to market yourself, your services and your company, it's great news! Clients are generating more color pages than ever before. And they're looking for people who can help them convert those pages into selling tools, entertainment and information that can help them meet their communications objectives. This booklet will help you identify the best prospects for your services, understand their needs, analyze the competition and build actionable Marketing Programs. Ten Steps for Marketing Plans that Work (No one said, "Ten Easy Steps") 1 . Preplanning Set your objectives. Before you begin your plan, you need to know your business objectives. Is it your objective to grow sales, increase profits, gain market share or enter new product or market segments? Objectives should be measurable and time-related. They'll provide targets for your plan and your organization. EXAMPLES: Objectives: 1. Grow Sales 8% Annually thru 2000 2 2. Achieve Average Pre-Tax Profit of 14% 3. Add 10 new High Value Accounts per Year 4. Increase Company Productivity by 6% per Year Form a 'planning team'. Include sales, production, technical and administrative management. Each function needs to be involved in the analysis as well as the decision-making that follows. 2 . List Your "Billable" Services. What does your company do? What services do you offer? What are your specialties? Where do you make money? What services does your company offer today? List your 'billable' services and the approximate percentage each represents of the company's total annual sales. Then, list those services you plan to offer in three years. Discuss it with your planning team and get agreement on these. EXAMPLES: Billable Product/Services Today Image Capture/Color Seps (18%) Film Output (Value Added) (50%) Stripping (6%) Page Assembly (11%) Proofing (10%) Lithoplate Output (2%) Customer Training, Support (3%) Three Years from Now Digital Printing (Demand) (10%) Database Management (15%) Digital Photography (5%) Interactive, Multi-media (10% Internet, Website Products (5%) Pre-production on-site mgt (5%) Image Capture/Color Seps (15%) Film Output (Value Added) (30%) Proofing (5%) (Source: International Prepress Association) These are the service products you'll price, promote, bundle and sell. As a service business, prepress companies have a unique set of problems. While you offer a specific set of services based on your facilities and skills, you're actually selling your company's potential! Each time you accept an order, you promise your customers that you can do what they want for the price you have agreed on. That poses some special considerations for your marketing plan. How can you 3 demonstrate a service product you haven't developed yet? Are you willing to sell on spec? Your marketing plan should provide the answers. 3 . Segment Your Markets So you have a great set of services? So what? Who needs them? Any group of customers who respond in the same way...to the same appeal...can be called a market segment. Customers in the same segment tend to have similar expectations about products. Sometimes they're competitors (with each other), or parts of the same business. In consumer markets, segments are often based on demographics and behavior... grouped by characteristics that help predict their responses. Market segments in the printing industry are usually described by WHAT these customers do with the materials you produce. A typical prepress company may serve several market segments: EXAMPLES: Market Segments Publishers Magazine, special interest Magazines, News/Entertainment Catalogs Books/Covers Advertising Agencies Print Ads, all Collateral Materials Multi-media Corporate Accounts Collateral Materials Annual Reports Packaging Other Retailers Inserts Direct Mail Point-of-Purchase Designers/Studios Customers in a segment usually have the same requirements concerning quality, pricing, turnaround times, service needs and delivery. By picking high value accounts in market segments with needs that fit your particular skills and work flow, you increase productivity and improve the bottom line. How do you segment a market? Often by the type of materials you're asked to produce. Segments allow you to focus your sales efforts on accounts that need the things your company does well, and accounts that are more profitable. They're also more defensible. 4 . Define High Value Accounts. What do your most profitable accounts look like? How will you recognize the next one? It won't surprise you to learn that a small percentage of your company's accounts 4 produce a high percentage of your sales and profits. But can you predict which accounts will be profitable before hand? What characteristics tell you: "This account's needs will fit our capabilities perfectly. We can make money together." You have the information you need to define potential 'high value accounts' in your files. Print a list of your accounts. List accounts with the largest sales and greatest profitability first, then those with lower volumes and profitability. Look at the top 10% of your accounts (sales and profits). Do these accounts have anything in common? Are they all part of the same segment? Do they have similar organizations? Frequency of orders? Job size? Type of work? Expectations about quality and/or turnaround? Process understanding? Financial stability? If you can answer these questions, you will be able to construct a 'typical' high value account profile, one that defines the characteristics of an ideal account for your specific business. From there, your planning team can identify other potential accounts that fit this profile. The next step is to identify the needs of these accounts, and to prepare a sales story that will help them understand the benefits of doing business with your company. This is part of the marketing plan you will develop here. 5 . Identify Market Needs What do they want? What to they expect from you, anyway? Primary Need: Your clients have needs at two levels. First they have a primary purpose for printed materials. Normally, it's tied to their overall communications objective. EXAMPLES: Primary Need or 'Purpose for Printing' Primary Need Persuade/sell Inform/educate Entertain Type of Materials Wanted Advertising, collateral, p.o.p., direct mail Publications, books, multi-media, etc. Magazines, multi-media, books, other It's important to understand this need; it often determines the level of their investment. And it can guide the kind of package you offer (mix of services, quality and pricing). This is where media decisions are made... print, broadcast, skywriting. You may not be able to influence it, but you will be able to suggest improvements and enhancements that might improve the client's satisfaction and increase confidence in your company if your understand this primary need. Secondary Needs. Customers have a second set of needs they use to discriminate between brands, or vendors. These are the customers’ selection criteria, the things 5 that must be satisfied to meet their primary need. These often vary by segment. Examples for printing-related services often include the following: EXAMPLES: Segment Retailers Primary Need Persuade/Inform ("More Sales") Secondary Needs Print Quality Turnaround (As promised) Cost (Price per agreed unit) Convenience (No hassle, solutions) Reliability (Trust, 'Peace of Mind') Specialty Magazine Entertain/Inform Quality (Critical Color, Adver.) ("Sell Advertising") Turnaround (Deadline related) Responsiveness (Flexibility, "whatever it takes") Breadth of Services (including storage, transmission, etc.) Reliability/Consistency Price/Value Once you've identified your customers' needs, put them in order of importance. Then define them in specific terms so you know what targets you have to meet for each type of customer. For example, turnaround times for clients in one segment may be 5-7 days. For another, overnight is demanded. Assign a value or quantity to each need. It will help you understand the benchmarks you have to meet...and to estimate the impact on your costs (and pricing). By the way, always ask your clients. They may not use the same words, but they'll certainly separate the 'wish lists' from the real wants. 6 . Identify and compare your competitors. Who's trying to satisfy the same clients... with the same services? How do they stack up? Now you know the customer's needs. How well are you meeting them? Are your competitors satisfying the customers needs as well as you are? Better? Which ones? A good marketing plan helps you establish a competitive advantage by capitalizing on the things you do well (strengths) and by neutralizing your weaknesses. Your goal in this step: determine which customer needs you satisfy best (better than 6 competitors), and where you need to improve. One way to identify your customer-perceived strengths and weaknesses is to develop a simple competitive comparison chart. You have most of the information. Here's an example: Down the left side, list the secondary needs you identified in order of importance (to the customer). Then, across the top, list your key competitors ...either other tradeshops or printers and service bureaus competing for the same service dollars in the region(s) you serve. And include your company. Now, one at a time, using a 1-to-5 rating (5 = excellent), rank the ability of each competitor (and yourself) to meet the customer's most important needs. Be honest! Better yet, talk with your clients. Ask them how they think you're doing. If you asked them for information on their needs, it's a short step to ask them what they like about your company and service...and what they don't like. That will at least give you the data you need for rating your organization. Next, rate your competitors. Give each a rating based on what you know about their ability to meet each of the needs. You may choose not to discuss competitors with your customers, but you need an objective assessment. If you believe the people on your planning team are objective, ask them. If you still want information from your customers, you can always use a 'blind' survey; that is, use a research group to survey customers without identifying the source. Businesses do it everyday. 7 . List Your Competitive Strengths, Weaknesses Why do your clients buy from you? What do they like about your company? What do they hate? Study the comparison chart you just completed. What does it tell you about your 'relative' competitive position? Which needs does your company satisfy better than your competition? Where are you vulnerable? By now, you have a clear picture of your company's competitive strengths and weaknesses. List them on a sheet of paper. On one side, list your apparent strengths; on the other, your weaknesses. EXAMPLE: Strengths 1. Quality color 2. Responsive to client's Weaknesses 1. Must improve turnaround to distant accounts 2. Breadth of line doesn't meet 7 special needs. 3. Reliability new needs of clients 3. Pricing perceived higher than competitors. Some of the issues in this example aren't 'marketing'; they're production and product concerns. But the way you present yourself to customers is a marketing issue. A good marketing plan can sometimes turn weaknesses into a positive sales story. The company in this example might say to their customers: "We offer the highest quality color anywhere, solutions to all your print communications problems, and peace of mind when you do business with us. Isn't that worth a little more?" The implication is that the benefits are worth a little more money, a little more time. Or, they might put it another way... "You know you can trust us with your quality, no matter what (or how long) it takes. Anything else is too expensive at any price." What has this company accomplished with these positioning statements? Simply this: They have built an appeal around their strengths... the things their company does well. And they have neutralized weaknesses. Every element of the company’s marketing plan should be consistent with this positioning -- product offering, literature and advertising, sales presentations, pricing, even proposal content. If the marketing plan were to be written around today's business conditions, you would be ready to start developing strategies and programs now. But your marketing programs are going to take place in the future. You should first define trends in your business that might change the situation you've analyzed. 8 . Define and Analyze Trends What's the single most important trend affecting your business? How will it impact your company? What changes do your customers see in the future? What type of services will they need? How will their objectives change? What about performance requirements? The kind of materials they'll be providing? List the trends as you see them now. Consider the questions above and two other areas: 1) external and technical trends such as desktop, digital photography, etc.; and 2) competitive trends including changes in services offered, pricing and other issues that might impact you directly. 8 EXAMPLES: 1. 2. 3. 4. 5. 6. More color pages, shorter runs Digital, On-Demand Printing Growth Computer-to-Plate systems Remote proofing Internet expansion, website growth Multi-media production Once listed, look at each trend and ask: "If this trend continues, what will it mean to my business? Will it force me to change my product offering? Pricing? Other things?" What's the probability, anyway? On a scale of 1 to 100, how would you rate the likelihood that each trend will continue or have a direct impact on your business? When? Remember, people tend to overestimate the short term impact of a trend...and often underestimate the long term results. Where do you learn about trends? Talk with your customers, again. What do they expect to include in their print and related communications programs in the future? Read management information reports from the IPA. Scan the agendas of industry meetings. Talk with your peers. Discuss important changes in your business with your planning team. If you find a trend that seems particularly threatening, you can analyze it further with 'force field analysis'. Ask which forces are fostering the trend, and which are hindering it. Identify the greatest forces...those that are having the strongest influence on the trend, and watch them closely. It's like an early warning system. Don't try to write solutions yet. Just define the impacts and probabilities. Which trends represent opportunities for your business? Which represent threats? List the opportunities and threats associated with the trends you identified. 9 . Select Marketing Strategies to Match Your Business How can you cash in on your strengths and opportunities...and neutralize the rest? Selecting strategies is easy when you've completed a reasonable analysis of your markets, your key accounts and your competitive situation. You simply decide what you have to do to capitalize on the strengths you've identified, and how to neutralize your weaknesses. 9 By this point in the planning process, you have a reasonably good understanding of your company's market segments, target accounts, and your relative strengths and weaknesses. If you had endless resources, lots of free time and some assurance that the conditions you had identified were stable, you could try to do everything... enter new markets, add new products, experiment with different programs...until you got it right. But you work in a different world than that. So, like everything else, good marketing plans are based on choices. Which opportunities or problems should you address in your plan? Which should you emphasize? It's one of the truths of marketing that you can get more impact when you select strategies that build on your strengths....rather than trying to correct voids or problems. If your prime capability is handling high volumes of images and page files, you want to seek out accounts that need this (catalog houses, direct marketing, color publications, etc.). Collateral work and annual reports may be good businesses, but they may not play to your strengths. Look at the list of strengths and weaknesses, threats and opportunities you've prepared, and select those with the greatest potential impact...and select strategies to address these. What is a strategy? Strategies are really "what" you want to do. Programs are "how" you plan to do it. Writing strategies begins by answering the question: What do we have to do to capitalize on this strength or opportunity? Or to fix this problem? Keep it general. List as many options as possible (including your current strategy). One caution: try to avoid writing down 'Things to do'. There are five categories for strategies in a basic marketing plan: 1. 2. 3. 4. 5. Product Pricing Marketing Communications and Promotion Sales Coverage and Distribution Information Plans may include all, or a few. But essentially the goal of all marketing is to accomplish three things: 1) Create awareness of your services and unique capabilities among potential high value accounts; 2) Induce trial of your services in those accounts; or 3) Expand demand for your services in existing accounts. EXAMPLES: Marketing Strategy Options 1. Expand file management and distribution services. 2. Focus on high value accounts, established market segments 10 3. 4. 5. 6. Introduce remote file approval and proofing options. Develop transaction-based pricing for digital services Create awareness of new digital services. Focus on target high value accounts. Improve sales productivity with new interactive sales tools (pricing models, demonstration programs and proposal forms). 7. Develop ongoing customer satisfaction measurement and feedback programs. When you've completed your list of optional strategies, ask the following questions: • • • Which options are most likely to help you achieve your marketing objectives? Which options best provide a sustainable competitive advantage? Which strategies appear to counter competitor strengths...and actions...most effectively? Which strategies appear to minimize your vulnerability to competitive response? Which are most consistent with your strategic plan (have you written one yet)? • • 10. Develop Programs to Carry Out Each Strategy. How will you carry out the strategies you've selected? What actions will you take? Tactics or programs are the things you plan to do in your plan. Brainstorming is one way to develop a list of workable programs. Get your planning team together and review the problems, opportunities and the strategies you've selected. Ask them: "Knowing what you know today about our services and capabilities, what are the best ideas you can imagine to address this issue (problem/opportunity) or implement this strategy?" List the ideas, group them by similarities, and prioritize them. Review the programs you've listed for each strategy. Are they consistent with others supporting the strategy? Given your strengths, which ones have the greatest probability of success? And which programs are likely to have the greatest impact on your top and bottom lines? Let your planning team decide. When you've completed this step, you have the key elements of your plan. The final steps are these: 1. Assign responsibility for each program (to a member of your team). 2. Determine when the program must be completed to achieve your goals. 3. Estimate the 'scope' of each program (how much, how many, how often, etc.) to achieve the goals you've set. 11 4. Calculate the cost of each program. 5. Estimate the sales impact. What additional sales do you expect from the program? What improvements in profits do you expect? When you've completed these steps, you can create a budget and forecast for your marketing plan. And you'll have the tools in place to measure and control results. Two Steps to Success... 1. Prepare the plan. 2. Do it!