At the core of all successful business decisions is an underlying strategy based on solid market research, accurate data, and current information. Printing managers who have learned to stoke their companies' business plans and strategies with a constant flow of useful and essential business data are in a much better position to unlock growth potential and protect against sales declines.

But honing in on just what pieces of information to compile and analyze can be a daunting and dizzying task.

`"The first place to start is with your own organization," advises Dennis Castiglione, president of Procom Management Group Cleveland, Ohio, a graphic arts management consulting firm. "Take a good, close look at your company to see what kinds of customers and markets you're serving, how you've grown with them, and the profitability of the products you are currently producing."

Consultant William K. Marrinan agrees, saying that compiling strategic business information starts with an introspective look. He says that there are key pieces of business data-which he calls fact-based data-inherent in a company that should be used to develop a profile or a current assessment of a business.

FIRST, LOOK AT THE RECORDS

Such information can be found in a printing company's records of sales and marketing, operations, and financial matters, says Marrinan, who is the president of Marrinan Associates, Inc., Raleigh, N.C., a consultancy that offers printers services in the areas of strategic business planning, mergers and acquisitions, and turnaround management Marrinan also serves the National Association for Printing Leadership (NAPL), Paramus, N.J., as an associate consultant.

Marrinan advises printing company clients that are undertaking strategic business planning programs to develop profiles of various types based on internal business data. He adds that his company advises and helps managers in these efforts. A sampling of these profiles follows.

1. Account base profile. "Printing managers should compile a list grouping their customers by sales volume and amount of margin contribution so that they can determine which customers are giving them the most business and where they are making the most money," advises Marrinan.

Based on the results of the customer profile, managers can develop a sales strategy that leads to revenue growth and high account retention. By developing this fact-based profile of the sales account base, Marrinan notes, printers can more accurately assess where to invest their resources to increase and/or maintain existing accounts.

DIFFICULT PROPOSITION

It's important for printers to know the composition of their account base, he adds, because given today's fiercely competitive marketplace, quickly replacing the loss of a major client would be extremely difficult for the typical printer.

2. Product profile. This is a straightforward exercise, in Marrinan's view. Managers who complete a profile of their company's products can easily assess which products make the most money.

3. Sales rollover profile. Here a company analyzes its sales by individual account for a period of at least two years so that managers can assess the number of lost accounts or decreased business compared to the number of new accounts and increased business.

"Looking at total sales to assess business growth can be deceiving because the average sheetfed printer experiences what I call a `negative sales rollover' or 'churn' of between 12% and 16%, while the average web printer experiences levels of 18% to 26%," explains Marrinan. "Rollover of minus 15% refers not to a plunge in total sales from one year to the next but to the percentage of displaced sales, sales that somehow have to be replaced."

Understanding this point is important, the consultant adds, because negative rollover needs to be taken into account in sales growth plans. For example, a printing company aiming to expand its sales from $1 million to $1.25 million but saddled with a sales churn of 15% actually needs to write total sales of $400,000, not just $250,000.

"SIGNIFICANT BUSINESS ISSUE"

"In my opinion," says Marrinan, "probably the most significant business issue facing printers today is this matter of negafive rollover-the need to replace lost business just to hold their own.

Still, printers can combat negative rollover. Marrinan says that printing managers who pay close attention to rollover can readily identify when an account is showing signs of leaving and can take immediate action to recover lost business and thwart the flight of the account

4. Financial profile. This analysis, which helps printers identify where expenses can be reduced or productivity improved, has as its goal the identifying of profit improvement opportunities.

As strategic planning consultant Ken King sees it, "Printers first need to define their businesses in a very systematic way." To do so, King suggests that managers answer the following: Who are our customers? What are their needs? What products and services do we provide to meet those needs? What specific value do we add? How are customer needs apt to change?

"When we look at today's successful printing firms-the profit and growth leaders-virtually without exception we find that they have focused on some market segment, developed an indepth understanding of customers' needs in that segment, and created the competencies that permitted them to excel at maintaining those needs," explains King.

King serves as both the director of technical services for the Graphic Arts Technical Foundation (GATE), Sewickley, Pa., and the head of consulting services for the Printing Industries of America (PIA), Alexandria, Va.

CAPTURING MORE SALES

The point of a strategic business plan is to increase revenues, and that means capturing more sales from new and existing customers alike, observes industry management consultant Ted Stitzer, who oversees the consulting services offered by NAPL.

"Right away, the compelling question for managers becomes, `why do customers buy from us in the first place?' If a company doesn't understand that, how would it know what to emphasize in its marketing messages since it apparently doesn't understand why customers already use its services," says Stitzer.

To assess clients' needs and demands, many consultants recommend the use of customer surveys.

eKG Research Associates, Inc., Flint, Mich., offers a survey that measures a printing company's competitive position in the eyes of its customers.

ASK THE CUSTOMERS

"Our survey asks customers to score their satisfaction with the subject printer and with comparable printers-the competition, in other words; we then index those scores to come up with a competitiveness index that is, in effect, the percentage difference separating the subject client from its competitors," explains Dallas Dort, the founder and president of eKG Research Associates.

To determine which qualities should be measured in the survey, eKG staff members continually survey print purchasers, says Dort. Based on recent survey findings, here are the top 16 issues that matter to buyers:

-Quality of product or service

-Ideas, information, knowledge

-Range of capabilities, products, services

-Clear and helpful quotes, estimates, proposals

-Clear and helpful invoices

-Shipments that match orders, specifications

-Meets deadlines (on-time delivery)

-Accurate invoice amounts

-Prompt quotes, estimates, proposals

-Prompt shipments

-Prompt problem solving (jobor order-related)

-Readily accessible people, information

-Understands customer's business

-Enthusiastic about customer's business

-Competent people

-Price.

Since these are the topics that matter most to printers' customers, Dort points out, printing companies that do well tend to be those that focus on the important issues.

LEARNING MORE ABOUT DEMAND

It's also valuable to managers to learn more about their customers' industries. "In strategic planning for printers, a core question is a very simple one: why do people use print? The question and the answer point up why printers need to have an understanding of the demand side of the business," explains Joseph Webb, Ph.D, a co-founder and a principal of the TrendWatch market research consultancy, which is based in Harrisville, R.I.

Who are your customers? What are their communications challenges? And where does print fit into their communications needs? These are questions that attentive printers are obliged to answer, advises Webb. He adds, "Read the trade magazines, both the print and Web versions, that cover your customers' industries. This may sound like a simple exercise but it can be valuable and is often overlooked."

Yet another way to gain insight and assess trends in a client's industry is to attend trade shows and conferences that target that industry.

SIZING UP A GIVEN MARKET

Formulating a successful competitive strategy hinges on accurately assessing the size, expected growth rate, and competitive make-up of a given market.

"Printers need to have a clear picture of the structure of the industries they serve, plus their share of market and that of their competitors. Why? Because strategically it matters a great deal if they are the leader or a follower," explains Wallace Stettinius, former chief executive of Cadmus Communications and now a lead professor in strategic management at NAPL's Management Institute.

For example, Stettinius notes, a smaller firm directly confronting the market leader in a mature market may be waging a losing battle. He says, "In an expanding market, companies can grow without direct confrontation. But to grow in a mature or declining market, a company has to take business away from its competitors, which is never easy to do."

Printing managers wishing to determine the size of their specific marketplace and their share of it face no small task.

Stettinius counsels, "I don't know of any single place to go for this information since a lot of market data is compiled by production process, not specific products. In the past, using a variety of means, I've compiled information based on known competitors in my marketplace and known prospects.

"For example, a printer trying to determine market share might find that a shop quoting on $10 million in work that gets $3 million in actual jobs has achieved 30% of an identified or served market. Information like this constitutes valuable insight in strategic planning."