C. Clint Bolte & Associates

This premier conclave of the National Association for Printing Leadership saw a number of firsts: (1) its largest crowd ever at 264 attendees to a West coast venue, (2) sixty "first timers", (3) 119 companies represented (89 Presidents or CEOs) and (4) the most in-plants ever at seven with six of those being higher education printing operations. Despite Arizona ending its three year drought with ample rain during the February 16-20 conference, there were stimulating keynote speakers, lively breakout sessions, and numerous networking opportunities at the Scottsdale JW Marriott Desert Ridge Resort.

Andrew Paparozzi, NAPL's Chief Economist, delivered his annual State of the Industry Report. Following nine of eleven quarters of sales declines; Paparozzi indicated that the four hundred member Printer Panel has reported four consecutive quarters of positive, increasing sales. "After a year of extending (production) hours," Paparozzi reported, "We're (the printing industry is) finally hiring again." The expected 4.5 - 5.5% growth for 2005 will only get us back to the pre-recession sales levels of $86.6 billion in commercial print revenues recorded in 2000. He summarized, "Printers not experiencing increasing sales, improving profitability, and firming prices should be asking themselves why!"

The greatest threat represented by this good news is "complacency and assuming, as too many printers are, that a favorable turn in the business cycle is going to make everything right again." The reality of print is that our jobs, service mix and workflow are getting more complex. Therefore, Paparozzi concludes, "We (printers) must make better decisions over a broader range of issues, excel at more tasks and think integration of systems, not stand-alones."

His chart showed the nondurable manufacturing productivity since 1990 has doubled that of the printing industry (77.1% versus 36.9%). Paparozzi remarked, "Technology is an essential part of productivity maximization, but only a part. We have to get more per employee … while not over-hiring." He suggested that the industry is competing for eighteen specific skills that are in demand across the entire economy. And ten of those are IT-oriented.

Several of the Printers' Panel, whom Paparozzi queries quarterly, reflect a series of best practices: (1) CEO-to-CEO selling as a key part of getting to know the client's total business, (2) a Board of "Advisors" with no legal authority but opine on increasingly complex business issues, (3) Employee Performance Appraisal Systems that score precise, embrace interpersonal skills as well as job-specific technical skills, define clearly performance standards and encourage extensive on-going dialogue with employees, (4) a dynamic performance indicator report with at least a dozen metrics traced frequently.

Paparozzi showed the sales results of 173 members of the Printers Panel during the past decade. Fifteen percent of the firms experienced above average growth in at least seven of the ten years. The remaining 85% of the industry are up one year and down the next. And there is no conventional method of classifying these printing companies in terms of size, equipment configuration or product specialty. He concluded, "The gap between the enduringly successful minority and the up-and-down majority will widen as our industry gets more competitive and complex."

Featured keynoter Dr. Martha Rogers spoke on "Customer-Focused Marketing and Strategy" taken from her series of popular business books and consulting practice (www.1to1.com). Building "share of customer" and "return on customer" depend upon "applying more resources to keeping valuable customers than acquiring new ones of unknown value." She advocates "treating different customers differently." Facts have shown that a greater share of client's business results in incrementally lower costs to service and clients becoming more locked in. The exception is WalMart as many vendors lose money on goods and services sold to this behemoth or make much less than from their more loyal clients.

In differentiating among clients, Dr. Rogers illustrated that the top 10% of jewelry buyers buy 66% of all jewelry sold, the top 0.2% of clients rent 25% of all car rentals, the top 5% accounted for 50% of all LEGO sales and the top 5% consume 60% of all long-distance services. Rogers admonished, "Identify, understand and connect with these most valuable clients."

She advocates "tiering" your clients into those you want to retain as being the most valuable, those you want to "grow" as having additional potential and those you should consider firing. She illustrated this by a business equipment firm whose top 3,000 clients represented 50% of sales and should be receiving more 1-to- 1 marketing efforts. The bottom 7,000 bought little from the firm over the recent two years. This later group should receive periodic postcard blasts.

She emphasized the tasks of "identify, differentiate, interact and customize" as the key to implementing this strategy. She offered numerous successful case study examples of process and retail businesses. If she had learned a little bit about the printing industry and chosen her illustrations around job shop applications, there is no telling how many printer clients she might have attracted as a consultant much less be invited back to speak to this and other printer groups in the future.

In presenting the latest digital technologies important to printers, NAPL's Senior Consultant Howie Fenton mentioned that wireless fidelity (WI-FI) transmissions would become increasingly important as more printers adopt computer-integrated-manufacturing. Chemistry free plates will be increasingly attractive to printers as chemistry accounts for 30% of the costs of printing plates. Typical printers spend $40,000 to $100,000 a year on plate chemistry. He emphasized that while the large format (8-up) inkjet digital proofs have become the industry de facto standard it is important to run a daily test and recalibrate when necessary as inkjet is inherently quite variable.