But in the crazy world of strategic M&A among privately-owned print, mail and graphics communications companies, seller due diligence into the buyer is hardly an exception. In fact, right now the NAPL M&A advisory team is handling three client matters each of which involves full disclosure by the buyer of the analysis that supports the transaction. One involves a $20 million annual revenue sheet-fed and web printer, another relates to a $1.2 million annual revenue direct mail shop, and the third has to do with a $5 million annual revenue packaging company.

Why would a buyer need/want to open the window on their internal evaluation of the opportunity? The answer primarily lies in the buyer’s choice of currency.

If the seller and buyer agree on a price, and if the buyer agrees to pay 100% of the price in cash at closing, then arguably there’s no cause for disclosure. The seller is not asked to become a stakeholder in the buyer’s future success. Landlord-tenant and employment relationships may affect this dynamic too.

But NAPL clients among strategic acquirers know that it’s never so simple. Rarely does the seller have a realistic, firm price expressed in black and white dollars. More often than not, the buyer (and advisors) has to work though layers of Q&A and issues to get to point where there’s clarity on “price” and “structure.” And “structure” usually involves some form of risk-based consideration such as royalties, earn-outs, contingent notes, etc.

It is the choice of buyer’s currency, therefore, that causes the seller to ask for verification or comfort or assurance that the buyer is a viable entity and the M&A plan is feasible, and, therefore, the risk inherent with the structure is tolerable.

An example occurred this week when the NAPL strategic acquirer client e mailed me upon receiving the seller’s information request. He asked, “Huh, aren’t WE the buyer?” Of course, the buyer’s advisor can push back on the seller’s request, which I did. And the buyer can express willingness to use more cash, which reduces the seller’s push for disclosure (“why do you care, our client is just going to write a check and be done with it?”).

I could only imagine if the client was buying a house and the seller asked for his household budget and copies of credit card statements to verify the debt. Not happening at home; not uncommon at the office.

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“Different animals have different flight distances and they gauge them in different ways. Cats look, deer listen, bears smell,” explains the co-narrator and protagonist, Pi Patel, son of an Indian zoo owner. “Giraffes will allow you to come within 30 yards of them if you are in a motor car, but will run if you are 150 yards away on foot. Fiddler crabs scurry when you’re ten yards away; howler monkeys stir in their branches when you’re at twenty; African buffaloes react at seventy-five.”

Sales prospects also have their own flight distances. In retail, for example, some customers will bolt a store if a salesperson approaches them as soon as they enter; others will politely decline the help and proceed to look around; still others will find the greeting welcoming and praise the shop for its attentive customer service. Experienced salespeople can make a quick judgment call about how quickly to approach each customer, but knowing how hard to keep after prospects without scaring them away is more difficult when you can’t see them. Are you sending them too many emails and alienating them? Are you sending too few and falling out of their awareness altogether?

In an  item in today’s [Re]View member newsletter, we cited an article in the May 13 issue of BtoB magazine by Christine Crandell, President, New Business Strategies, about four “customer experience disruptors” that can drive prospects and even some established customers away. The first is the point at which Marketing identifies a lead and tries to move it to the front burner and spur the prospect to act.

At this “zero moment of truth,” writes Crandell, “most companies believe they can accelerate the funnel velocity and treat prospects accordingly. That’s when the first disrupter happens: an inundation of marketing emails, irrelevant calls to action, ‘freemium’ offers that don’t work or aren’t really free, and those creepy follow-you banner ads promoting the product a buyer just looked at.

“This experience differs from what the potential buyer expects and introduces doubt in their minds,” she continues. “Buyers typically give a seller the benefit of the doubt and move forward”―continue walking into the store despite the salesperson assault―”but, in extreme cases, they will completely disengage”―turn right around and walk back out the door.

How to keep customers engaged without annoying them? When it comes to email, a lot depends on the message you are sending. Constant emails with special offers, new products, one-day sales, etc., will earn you a quick trip to the “block email address” folder. Emails with valid information, interesting content, and items the customer can use are far more likely to be accepted and even opened. The added benefit of good business content is that it establishes your company as a “go-to” expert in the field and someone they will likely think of calling should a need for services such as yours arise.

You don’t have to stop the emails, blogs, twitter messages, etc. Just make sure that you’re feeding your customers a diet of good, targeted content they can use to grow their business instead of a stream of junk food that fills their mail boxes but not their minds.

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If a new printing technology started to reduce the purchases of offset presses or electrophotographic (toner) devices, then we could say it was a disruptive technology. Christensen talks about this in his 1997 best-selling book, “The Innovator’s Dilemma.” In the book, he classifies technologies into either sustaining or disruptive. Sustaining technology relies on incremental improvements to an already established technology. Disruptive technology is more revolutionary than evolutionary.

In the printing industry, we could point to increasing efficiency and automation in prepress and pressroom areas as sustaining technologies. In contrast, digital presses and inkjet presses would be considered disruptive technologies to traditional offset printing. The threat from a disruptive technology isn’t apparent immediately, because in the early life stages of new equipment, the technology is often buggy or has performance or reliability problems and, as a result, appeals to a limited audience.

If we look back in time at the evolution of inkjet reduction printing, we could point to the time frame between 1993 and 2009 as the time when the technology was immature and suffering from performance problems. However, sometime after 2010 we start to see more manufacturers come to market with more mature versions of technology and today we are starting to see more companies purchase inkjet equipment.

Production Inkjet Mass-Market Adoption

One of the toughest questions to answer at the recent InkJet Summit was when will Production Inkjet become a disruptive technology and achieve mass-market adoption. Here is an interesting perspective from Ray Kurzweil, an inventor, businessman, and author who explains how the disruptive technologies will transform industries, business models and pose new opportunities—and hurdles.

What will be the effects? It could be argued that inkjet production printing will foster more variable data printing (VDP) jobs because of the increased efficiency of longer run length VDP work compared to electrophotographic (toner). The initial markets for inkjet production printing are books, direct-mail, and transactional printing. The two markets most likely to utilize the variable data printing capabilities are direct mail and transactional printing.

But those are very specialized segments of the marketplace. Mass-market adoption would mean that commercial printers would use these devices to print a variety of different applications. Inkjet production printing sits in the window between digital presses that are toner or electrophotographic (EP) and offset printing.

For inkjet production printing to make sense, they need to have enough work in this window. This window is based on run lengths. Although dependent on the specific product (books, magazines, etc.), this window is somewhere between 500 to 10,000 sheets. Within that window, you need to print enough pages per month to make the technology worthwhile. Depending on your selling price, you may need to print six – eight million pages per month minimally to break even, or nine – ten million pages per month to make money.

The bottom line is that right now the total cost of investment requires a very high volume of pages to make sense. What will it take for inkjet production printing to achieve mass-market adoption? In my opinion, the cost has to come down so that the cost of entry makes financial sense for the average commercial printer.

The tougher question is what is that price point and how long will it take to get there. To answer these questions, we have to play some what-if games. What if the total cost of investment comes down $250,000 every 2 ½ years? At that rate it could take 5-7 years. But that’s based on those assumptions. What do you think? Do you think it will take three years or do you think it will take ten years?

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East Rutherford, N.J. (May 14, 2013) ―The National Association of Quick Printers (NAQP) announces publication of the 2013/2014 NAQP Sales & Marketing Study, the first sales and marketing study for the quick and small commercial printing segment. The study was produced for NAQP by Mitch Evans Consulting.

“There were a number of fascinating insights uncovered in our survey about how companies identify prospects and convert them into customers,” says Evans, who serves as Managing Director of NAQP. “We were able to get a clear picture of the sales and marketing strategies today’s quick and small commercial printers are using and how they handle various facets of the sales process, from estimates and order entry through ongoing customer communication.”

Among the topics reported on in the new study:

• A profile of respondents’ 10 top client industries, the percentage of the companies’ total sales each major client represents, and the top industry sales targets.
• A profile of the products and services sold, how they have changed over the last 12 months, and changes that are expected to take place in the coming year.
• A breakdown of how marketing and advertising dollars are spent as a percentage of total sales, plus types of marketing, effectiveness of each marketing type, use of social media, and primary marketing challenges.
• Information on top client relationships, including length of relationship, client acquisition method, frequency of client visits, and top client sales growth or decline.
• Also, type of CRM software used, lead generation methods, procedures for estimate write-ups and follow-ups, and sales/CSR training methods.

“This new study will be a valuable tool for quick and small commercial printers who want to benchmark their marketing budgets against those of their peers, see how other companies set expectations for their sales staff, and fine-tune their sales and marketing efforts,” says Evans.

“In short, it will be a significant asset for company owners and managers who are challenged to find the best ways to spend limited marketing dollars and implement a more effective sales process,” he adds.

The 2013/2014 NAQP Sales & Marketing Study (NQ1024), 62 pp., perfect bound, is available now for $155.00 (NAQP/NAPL members) and $249.00 (non-members), plus shipping and handling. For more information, or to order, go to http://ilnk.me/NP1024 or call (800) 642-6275, Ext. 6324 or Ext. 6349.

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If you are contemplating a sale of your Label Business give me a call at 201-523-6326 or e-mail me at tcobery@napl.org.

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Besides sales, inconsistency and uncertainty also are being reflected in the industry’s overall staffing. According to BLS data, total employment for print and related support activities during the first four months of 2013 fell 2.0% from year-earlier levels. The decline for all of 2012 was 2.1%. The drop among production and nonsupervisory workers was even steeper—3.4% for all of 2012 and 2.8% for the first four months of this year. (See the chart below.) While the decline, no doubt, reflects ongoing industry consolidation, it also reflects erratic demand.

Furthermore, companies, on net, have not been boosting hours, something you would expect to see if business was firming substantially. Among NAPL State of the Industry participants, more reported lower (35.3%) payroll hours than higher (24.1%). This isn’t surprising since sales were essentially flat in the first quarter, continuing the string of fits and starts we’ve been witnessing for several years now. Two-thirds of State of the Industry participants expect to either leave staffing unchanged (56.4%) or to reduce it (9.8%). And based on the critical needs companies have identified, we can assume that for those that expect staffing to increase (33.7%), much of the increase will be in the areas of sales, marketing and CSRs.

Andy Paparozzi          Joe Vincenzino

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It may not always be such a conclusive difference, but whether it’s home court, home ice, or home field, playing on your own territory seems to be a lot more comfortable than traveling to an opponent’s venue. Some might say the presence of home town fans is the reason, and it certainly is harder to make a free throw when you’re a visitor forced to shoot against a backdrop of screaming, arm-waving home team fans. But it’s not always the fans. It is more often a matter of familiarity with the peculiarities of a place than with the involvement of spectators.

In golf, for example, where (local pro notwithstanding) there is seldom a home town favorite and fans applaud good play on all sides, a player who is familiar with a course or has played there a number of times definitely has an edge. Even when games, such as the Super Bowl or NCAA playoffs, are played at neutral sites, teams that have been in the particular arena before generally are more successful.

What makes the home turf such an advantage is that the players are comfortable with it, know how the ball bounces off the outfield corners or the puck plays off the boards, and don’t face the kind of uncertainty that can lead to indecision or error.

Enjoying a home field advantage doesn’t just happen in the sports world. When we work in a certain industry, sell to a particular vertical, or cover a specific territory, we can often leverage our familiarity with the nuances of that area or specialty to achieve a greater degree of success. And if we don’t use this advantage to our benefit, we are really short-changing ourselves.

You know your local area, your customers, the processes you use, and the products or services you offer in great depth and detail. And you can and should use that knowledge to help you gain an edge on your competitors.

If your home town has a summer or holiday festival that you know happens at a certain time each year, contact your local officials well in advance about printing the signs, creating the awards, or supplying printed t-shirts.

If you have developed experience and knowledge about wide-format, four-color, or letterpress printing, for example, use your proficiency as the basis of a blog or social media initiative that establishes your position as a go-to expert in those areas.

If you read in the local paper that one of your customers or prospects has just opened a new store, expanded an office, hosted a charitable event, or won an award, contact them, offer your congratulations, and suggest ways in which you could help them with the marketing on their next venture.

And if you don’t feel that you have a home team edge, work on developing one. Learn more about local events and the people in charge of them. Investigate ways to leverage your industry know-how through social media and other outreach strategies.

Perhaps most important of all, get closer to your customers, learn everything you can about what they do and what they want. And remember, if you need to get a fuller picture of your customers’ needs and preferences, an NAPL eKG Competitive Edge Profile is the best available industry tool for doing so.

Why not share ideas about some of the things you have done to develop your home court advantage.

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David Avrin will kick off the conference on Friday morning with his presentation “It’s Not Who You Know, It’s Who Knows You! – Building Your Business by Building Your Brand”. David is an in-demand business marketing speaker, author and executive coach, and has spent over two decades on the front lines of Marketing, Public Relations and Strategic Branding.

A highly rated speaker at last years event, Nancy Proffitt is back to share her experience and expertise.  She served as a senior management executive with FedEx Corporation for more than 20 years, using her leadership development and business skills and her profit-oriented attitudes to promote positive, rapid and lasting organizational change. Nancy is known for her no-nonsense and often humorous coaching style which focuses on maximizing human potential to produce measurably increased profits.

Want to learn more about direct mail, designing effective mail and best practices? Then you’ll want to hear Trish Witkowski, who is Chief Folding Fanatic at the online community foldfactory.com. An award-winning designer, she held the position of creative director for a Baltimore-based agency for several years and has taught design and desktop publishing at college level. Trish frequently writes and blogs on the topic of folding and finishing and hosts a weekly e-video.

Our Saturday morning general session speaker is Peter Ebner, who with over 25 years experience in the printing industry, knows a thing or two about sales. As a professional sales trainer and marketing consultant, Peter knows the challenges selling printing presents and he’ll demonstrate how to land more jobs. But, what makes his seminars and training programs so effective is his extensive hands-on experience in the printing industry. His programs not only reflect his personal experience, selling printing for over 10 years, but also the experience of the 60,000 salespeople he has trained.

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East Rutherford, N.J. (May 8, 2013)―The National Association for Printing Leadership (NAPL) Mergers & Acquisitions Team announces that it is conducting an acquisition outreach initiative on behalf of a prominent worldwide label supplier in the Midwest Region of the United States. The M&A Team has been retained to assist in a strategic growth plan for its client, one of the top label suppliers to some of the largest brands in the beverage, food, and consumer products market.

NAPL M&A specialists are now in the process of identifying suitable candidates for acquisition by the Company. Candidates should be focused on the pressure-sensitive label market, ideally with revenues in the $10 million-$40 million range.

The client is well-capitalized and invests continuously in people, processes and technology. Today the majority of the client’s products are produced utilizing offset and gravure print processes. The client will be able to bring $6 million to $10 million in flexo business that is currently being outsourced to the acquired company. The client seeks a business whose operational management team will continue in that capacity after the acquisition.

“This will provide a unique opportunity for a proven business with a strong management team to join forces with one of the tag and label segment’s most successful players,” says Tom Cobery, NAPL Senior Consultant and tag and label industry specialist.

Cobery encourages any interested parties considering their liquidity or growth options for coming years to explore this opportunity by contacting him by June 14^th at (201) 523-6326 or tcobery@napl.org.

(Please note: All aspects of the outreach process will be held in strictest confidence, and NAPL will engage in a more detailed discussion with potential candidates after an initial conversation and signing of a standard confidentiality agreement.)

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About the NAPL Mergers & Acquisitions Team: NAPL’s Mergers & Acquisitions Team offers company executives trusted advisors who help them build shareholder value through strategic mergers and acquisitions. The Team provides merger advisory services, as well as helping companies with strategic sale of a business, strategic partner assessment/procurement, acquisition of general intangibles, and post-merger integration services. For information, contact Tom Cobery, NAPL Senior Consultant, at (201) 523-6326 or tcobery@napl.org.

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With seemingly more and more sales training resources available today from both industry-specific as well as general sales practitioners, there is an abundance of available assistance for those looking to improve their skills. In speaking with a business owner this week, they shared that the sales process training package they purchased 16 months ago is finally being rolled out to the sales reps. What happened? Is it a knowledge gap or an execution gap?

No doubt that selling print and print related services has gotten harder as the overall volume of work has decreased and individual company capabilities become harder to differentiate in the marketplace. The search continues for that superstar sales rep that’ll move all their business to your company as your next sales hire. What you usually get though is the rep whose business is on the skids and is looking for a new home as they try to salvage the business they have. It’s a new game, a different game. The existing sales reps in the industry will have a very difficult time surviving without the ability to change and the desire to add to their selling skills. Is it a knowledge gap or an execution gap?

From the NAPL White Paper, How CEOs can Transform the Sales Process, “Many legacy sales forces are not well prepared for a market that is changing before their eyes. It’s up to leadership at the top to move proactively and realign this critical function with the reality of today’s business landscape. It has become the responsibility of the executive suite to restructure the direction of the sales organization.”

These issues are not new in 2013 but have been magnified since the economic trauma of 2008 and the need for margins in a mature industry that is in transition. Is it a knowledge gap or an execution gap? The answer is yes. Industry veteran Bob Rosen talks about how many reps are not “wired” to be effective in sales. Caliper recently studied a large group of salespeople and determined that the majority of existing salespeople were in the wrong job.

Have you hired the right people with the right skills to be effective in your market? If you realize that you have the wrong people, what can you do? It would be very difficult to just wipe the slate and start over with the “right” people. Not realistic. One option you have is to create tiers within the sales organization. Perhaps there is a top tier for those that are doing all the right things (i.e. Senior Sales Representative): making their budget, growing their business with work that has margins in it, cross selling your different capabilities, using the CRM as directed, managing their sales funnel, etc. Reps in this tier have the ability to earn your highest scale. A second tier might be for those that are not doing these things but are in a reactive account management mode (i.e. Account Representative): quoting on work and trying to protect the business they have. This tier would pay a lower scale than the top tier.

Creating sales tiers is one option to deal with this situation and I’m sure there are many more out there. Doing nothing though is not a good option. As a business leader, it often comes down to making choices about how to improve a situation. Bridging the gap between knowledge and execution is a leadership issue that cannot and should not be overlooked.

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