We live in an age whereby Printers do not survive unless they invest in technology, employees juggle many duties and there is an emphasis on being a low cost producer. If a printing company has high prices – guess what? They go out of business. If their presses are 30 years old – guess what ? They go out of business. You get the idea – it’s really not rocket science.

But when we move from the private to the public sector, the dynamics change. “Government efficiency” is considered an oxymoronic concept. We are shocked when someone in the public sector seems to care about our problem, is competent and has a sense of urgency in their duties. That is very, very sad – but even more so, very destructive. The U.S. Postal Service is the poster child this year for a government agency no longer able to survive in the modern age.

Attempts are being made at restructuring, but what is the long term outlook? Yes, they have labor unions to contend with. But they also have other major problems with far superior competition (UPS, FedEx), and a huge volume decline; not to mention a computer infrastructure that is a joke.

For example, have you ever used the USPS tracking system? I have many times – and 90% of the time, the package is delivered while their system still
says “A label has been generated. No further information is available.” That is a workflow process that does not scan often enough (hardware issue?) or a database that never syncs with field data. Either scenario is from a flawed, and broken system. Compare the tracking to their competitor, UPS, whereby they can tell me on my Droid (with their own app) each and every step in the shipment. AND when it is delivered, I can see the signature in an email within 5 minutes after delivery. Now – is it any wonder that UPS Ground is a better choice than Priority Mail?

Have you ever visited a Post Office, and there is a like-new credit card reader sitting on the counter, but you cannot use it? It even has a sign on it that says “Do not Use” . The Postal worker has to take your card and scan it themselves – once again a broken system. AND taxpayer dollars were wasted on a project that did not deliver on its’ promises. Was anyone held accountable for the waste or cost? Why not? In the private sector, people lose their jobs when
millions are spent on failed projects. They actually have to have an acceptable ROI.

Why is the USPS broken ? I think it’s simple – no U.S. government agency can compete in the private sector, where efficiency and competency is required for survival. Capitalism is Darwinian, eliminating waste and rewarding smart capital decisions. Government agencies tolerate waste, bad decisions and Capital project cronyism. It’s not rocket science…

There seem to be two schools of thought among printers regarding “New vs. Traditional” Media. On the one hand, some printers fight anything that has to do with digital media, viewing it as a threat to their business that they have to treat with utter disdain. And then there are printers that are trying to determine how to add digital to their product and service offerings in order to build more effective and ingrained customer relationships. I submit that the latter school of thought will work and the former will be an utter and bitter failure.

One has to, first of all, believe that print media will always serve a purpose in our society, which I believe it will. And yet, digital media will not be defeated considering the cost of getting a digital message to the marketplace. Second, there is the learning curve for the printer. New software and hardware is needed, new applications have to be learned, and salespeople have to understand how to use a digital product to their advantage. Third, there is the fear factor to overcome. Fear in the customers’ mind is usually based upon the unknown of what a digital product is and how to create and use it. If ad sales reach the point whereby a printed product is unsustainable, clients sometimes look to a digital replacement, in order to keep the title alive. But clients, like printers, have to learn how to launch a digital product, the types of e-media/books available and most of all, how to sell their advertisers and make it profitable for them. They many times fail to do the simple things, like buying an iPad to learn what the craze is all about, and how it can be used for their title.

Printers and their clients have to learn to embrace digital media and determine how they can use it to make their clients more effective in their product sales and/or advertising. The alternative is to keep “kicking and screaming” until the sheriff shows up and lots of people are out of work…

One of the absolutely worst ideas in Sales is to call on a prospect without an appointment. I was on the receiving end today of a bad sales call.The regional representative for an unnamed digital press manufacturer shows up in the lobby unannounced to see me. At the time I was on the phone, had a stack of pricing and proposals staring me in the face, a person in my office waiting to speak with me, a financial report due at 11 and we are short-handed because of employees on vacation during hunting season. The last thing I need is to waste time with an unannounced sales pitch. And to top it off, he says “tell him I am town for the day, call me so we can perhaps meet this afternoon.

Here is what this Salesperson fails to acknowledge or realize:
1. If you are fortunate to have a responsible job in the year 2011, you are doing the job of at least 2 people. YOU ARE BUSY!

2. When you call on a prospect in these circumstances, here is what you are saying: YOUR TIME AND SCHEDULE IS NOT AS IMPORTANT AS MINE.

3. “I am in town for the day – call me” WHAT? A clueless comment.

4. He/she damages their credibility in my eyes. If they do not understand why and what is wrong about their approach, how astute are they in any technical matters of a potential deal? Could they possibly provide any expertise we do not already possess as an organization? Do they bring anything to the table or are they as clueless about consultative selling as they are about prospecting?

Respecting your prospects’ time by making an appointment sends a much different message: “I know you have responsibilities on a daily basis, I understand and respect that, so let me be at your disposal when you think you can carve out an hour.”

As I write, I have been on hold with Adobe for 29 minutes…I had a very simple, simple question which I needed answered. In order to get that answer I had to provide my name, software serial number, email address, version of Acrobat X, version of the problem software (Firefox 5). I also had to previously wade through a menu that did everything it possibly could to discourage me from talking to a live human being. When I finally did reach a “warm body”, the usual occurred: first, the impression that I am in a boiler room in Calcutta; then interrogate me for 5 minutes to verify my identity; ask me to define the problem; rifle through papers so they can find a canned script to fire back at me; put me on hold to discuss the problem with their “service team” (code for they are clueless how to fix the problem). Then, after returning to my call, ask me a few of the same questions I already answered. Bottom line: there is no fix for the problem yet. (Firefox 5 does not allow you to create a pdf from within the browser, as it did before with Acrobat X….). He could have simply told me that in the first 60 seconds after I identified the problem, if he was knowledgeable.

In commercial printing, if you “jerk people around” like that, you are out of business eventually. Why? Because I can hang up the phone and call another printer for a price or schedule or design help. Customer Service is very important for survival in this age of printing. In some cases, it is the only thing that separates you from your competition.
What about quality? Everyone prints well these days…
What about service? Deliver jobs in 3-10 days or your shop will quickly be empty.
Price? This industry is so cheap already I am amazed at pricing levels. With technology, prices have plummeted. A job that would have cost $10,000 in 1980 will now cost $3,000. Name me another industry where you charge 70% less for your product and you still survive (maybe electronics?).

Treat your customers well, and they will come back…and your customer service can be the difference maker, and possibly the only thing that separates you from your competitors.

Over the last 2 or 3 years, the amount of State and municipal work that is “Set a Side” has gotten out of control. “Set A Side” simply means that you cannot bid on the project unless your business is “small”, minority owned, female owned, owned by a handicapped person or a veteran. In theory this sounds very noble and altruistic to award business to such suppliers. After all, it’s a good thing – right?

Here is who these policies harm when they get so out of control and QUOTAS are mandated by the politicos:

1. They harm the TAXPAYERS. Why ? Because the taxpayer pays much more for printing. There are not enough “set-a-side” suppliers that can provide the thousands of types of printed products without them also sub-contracting and putting a mark up on it. Or, even if the business has the equipment, they operate in a non-competitive environment, which always results in higher prices! Price is no object when quotas need to be filled, and yet in the meantime 42 of 50 States are operating in the red this year-and considering how to make bankruptcy legal.

2. They harm society by BREEDING CORRUPTION. We once lost a nice multi-year contract that was converted to a set-a-side contract when it expired. I was told by the State Procurement official, that “there are quotas to fill”. We had done a great job for over 5 years and yet were left with no chance to bid. A week prior to bid opening, I received a phone call from a “set-a-side qualified” print broker who wanted to subcontract the job to us. I refused, since that was illegal according to the bid specs. He laughed and said he would certainly find 10 printers that would print for him. I told him to enjoy his stay in the state penitentiary.

3. They harm all the employees who work for “non-set-a-side” owned companies.
What about the employees who are not working for a “set a side” company? What about their desire and willingness to work hard and earn a living? They get harmed by enjoying less overtime, having to work reduced work weeks or having wages frozen: because revenue has decreased at their company.

Projects from the private sector are always awarded on the basis of price, performance, value added and quality. It is ludicrous to award them on the basis of class, race, gender. It is another example of a good intention gone awry. It provides no societal or economic redeeming value/benefit, it harms legitimate businesses, and breeds corruption. Our state and federal governments are in crisis situations with their budgets. It’s about time time we got rid of this wasteful and corrupt practice.

Tuesday, January 18, 2011

The owners of North America’s two largest makers of coated paper are discussing a deal that could result in one of them having a significant ownership stake in both manufacturers, according to a published report. NewPage’s owner, Cerberus, and Apollo Management, which has a controlling interest in #2 maker Verso Paper, are discussing what to do about NewPage’s high levels of debt, PPI Pulp & Paper Week reported recently. Apollo is also the largest holder of #1 NewPage’s $800 million second-lien bonds, the publication said. “One mutually beneficial scenario could see Cerberus retaining a diluted equity stake by sharing ownership… with Apollo through debt equitization,” the publication said. “Debt equitization” means debt held by Apollo would be converted to an ownership stake.
Apollo’s apparent “loan to own” intentions for NewPage came to light early last year when it and two other hedge funds snapped up more than 50% of the second-lien bonds, apparently under the assumption that NewPage’s inability to make debt payments would eventually give them control of the company.
Magazine publishers, printers, catalog companies, and other major buyers of coated paper would certainly cry foul if two companies controlling more than half of the continent’s coated paper capacity tried to merge. But it’s not clear whether Apollo would trigger any antitrust alarms if it obtained a sizable equity stake in NewPage by swapping debt for equity.
Analysts and industry executives have touted consolidation as the path to reasonable profitability for paper manufacturers. The tactic has worked well in the North American uncoated freesheet market but not so well in the newsprint market. UPM is trying it in the European coated and supercalendered markets with its proposed purchase of Myllykoski.
Source: http://deadtreeedition.blogspot.com/2011/01/newpage-verso-owners-reportedly.html

Direct Mail Buyer Pleads Guilty; Accepted More Than $1.8 Million in Kickbacks
November 23, 2010
WASHINGTON, DC—Nov. 23, 2010—A former employee of two Massachusetts-based customer relationship management agencies who purchased direct mail advertising has agreed to plead guilty to charges relating to his receipt of more than $1.8 million in kickbacks, the Department of Justice announced.

According to the charges filed today in U.S. District Court in Boston, Reed A. Richard conspired with others to defraud two of his employers by accepting kickbacks from two direct mail advertising printing brokers in exchange for awarding printing work to companies the brokers represented. The conspiracy took place from approximately January 2000 through at least February 2006.

According to the court documents, Richard, a former director of production at PreVision Marketing LLC who resided in Carlisle, MA during the conspiracy, took the kickbacks during different periods of employment with two separate customer relationship management agencies, which he defrauded as part of the schemes. Richard is also charged with tax evasion for tax years 2004 and 2005 by falsely claiming substantial personal expenses as business expenses on tax returns.

Richard was responsible for procuring direct mail printing services by obtaining competitive bids from printing companies, awarding contracts, reviewing invoices and authorizing payment. According to the charges, he approved invoices knowing that they were fraudulently inflated to include the kickbacks he was to receive. A portion of the inflations were passed from the brokers to Richard as kickback payments.

In order to conceal his role in the scheme, Richard purported to provide consulting services to the printing brokers through a shell company he owned. Richard claimed substantial illegitimate business deductions on his corporation’s federal income tax returns. As a result, he under-reported his corporate and personal taxable income, resulting in a total tax loss of approximately $170,000.

The plea agreement is subject to court approval.

Today’s charge arose from an ongoing investigation into the direct mail printing industry being conducted by the Antitrust Division’s New York Field Office, with the assistance of the Internal Revenue Service (IRS) Criminal Investigation, in Springfield, MA. Anyone with information concerning fraud or tax offenses relating to the direct mail printing industry should contact the Antitrust Division’s New York Field Office at 212-264-9308, visit www.justice.gov/atr/contact/newcase.htm or contact the IRS Criminal Investigation’s Springfield Office at 413-785-0090.
Source: Press Release

November 22, 2010
SAN FRANCISCO—Nov. 22, 2010— ForestEthics has released a report said to uncover the Sustainable Forestry initiative’s (SFI) industry-sponsored greenwashing in marketing wood and paper products. Titled “SFI: Certified Greenwash”, the report asserts that the SFI label primarily serves the interests of the timber, paper and forest products industries. Its centerpiece is a two-page infographic depicting the web of influence through which those industry interests dominate SFI.

“Greenwash is deception pure and simple,” said Aaron Sanger of ForestEthics. “Our report exposes SFI’s greenwash, an industry-sponsored scam that threatens our forests, communities, fresh water and wildlife.”

Among the report’s findings:

• Virtually all of SFI’s funding comes from the paper and timber industries.

• SFI’s most commonly used label, the Fiber Sourcing label, requires no chain-of-custody tracking of a product’s content or origins.

• Out of 543 audits of SFI-certified companies since 2004, not one acknowledges any major problem on issues—such as soil erosion, clearcutting, water quality, or chemical usage—that should be the focus of a ‘sustainable forestry’ program.

• In one case, the SFI audit team—which included only two auditors—spent just five days assessing an area larger than the entire state of Pennsylvania. They reported no violations of SFI standards and didn’t identify so much as a single opportunity for improvement.

• Board members representing SFI’s environmental and social sectors include Mike Zagata, former NY Gov. Pataki’s “most controversial agency head”, and Marvin Brown, who this October resigned as Oregon state forester amid accusations that his department conducted and tolerated environmentally-harmful forestry practices.

In March, ForestEthics mailed letters to Fortune 500 companies that rely heavily on direct mail to market their products and services, including companies from the insurance, financial services and telecommunications sectors. Citing public controversy about SFI’s deceptive “green” marketing practices, the letters offer ForestEthics’ expertise to help companies find legitimate ways to improve and promote the environmental attributes of their products.

Source: Press release.

Given the way in which the world economy is restructuring and the general uneasiness about the future, price has become the issue that continues to plague some salespersons. They have a hard time overcoming price objections because that is the only thing they offer to the client.
As a print Salesperson, if price is always the determining factor in whether you land a sale, look for another career. You have to bring VALUE that has worth to the table for your clients and the company you work for. If you won’t/can’t then you are either lazy or do not possess the skill sets needed for success.

Some of the common pitfalls of Salespeople who
only offer “the lowest price”:

1. They submit price quotes and NOT proposals. Proposals offer client solutions to their problems. Price quotes can be obtained on the Internet and there is no need for a Salesperson if all they do is submit price quotes.

2. They do not ask the right questions of their prospects: ie. “what factors determine who you use as a printer? If it is only price, then have you ever thought about the possibilities of getting some good input from your print salesperson to make more money for your business? After all, we have 5 other clients in your market and we have helped them just as we can help you…let me explain how…”

3. They are afraid of having a higher price than their competitor. Frankly, there is “always a lower price”. Over 5-8,000 printers go bankrupt per year. That means the market is full of “survival pricing” that benefits no one. If a Salesperson does not see value and believe they are worth more than someone else, then look for a new career (again). Salespeople have to have certain innate character attributes, one of which is self-confidence in their ability to be a valuable asset to customers. Some salespeople are too arrogant, which can turn off clients. But, if given a choice in hiring a salesperson, I’ll take the “arrogant cocky personality type” (which you can tone down with some frank discussion) versus the “chicken-little timid type” who has no confidence in their ability to be worth more to a client than their competitor salespersons.

The National Review has weighed in on the protectionist paper tariffs recently:

“…Ironically, just a week before the AFL-CIO attack, Ohio’s incumbent governor, Democrat Ted Strickland, was in Washington seeking special favors to protect a corporation whose actions could come right out of an Oliver Stone fever dream. That company, which Strickland mentioned by name in his testimony, is NewPage, an Ohio paper company. And like the fictitious Teldar Paper of Wall Street — the subject of Gekko’s infamous “Greed Is Good” speech — NewPage is owned by a rapacious hedge fund that is forcing the company to downsize, kill jobs, shut down plants, and bully other companies out of its market — all in the name of higher profits.
The hedge fund in question is none other than Cerberus Capital Management, a firm last seen driving another of its companies — Chrysler — into bankruptcy. Like its management of Chrysler, Cerberus’s ownership of NewPage has been nothing but trouble — but that didn’t stop Ted Strickland from going to Capitol Hill to lobby on its behalf. Following a business model that could be charitably described as “strangle the supply of paper in order to force up prices,” NewPage was a leading liquidator of jobs during the 2008 recession. It shut down six paper-making facilities in 2008 and refused to sell two formerly profitable plants to an eager buyer — thereby reducing the supply of paper in the marketplace.

But NewPage wasn’t content shutting down its own plants. It actually went to the trouble of buying other plants just to shut them down, too. These moves attracted wide condemnation from union leaders, whose pleas went unheeded. NewPage pocketed more than $300 million in federal handouts while still posting losses in the hundreds of millions of dollars — and quarterly losses increased by 60 percent even while its sales increased. This while its CEOs (it has had five of them in the past four years, only one of whom lasted a full year) walked away with multimillion-dollar severance packages. Other high-level executives banked millions of dollars in bonuses.

Which brings us to Strickland’s testimony. Contra his anti-corporate rhetoric in this campaign, Strickland is in fact lobbying for political protection for NewPage in the form of new protective tariffs tailored to ensure its interests. In doing this he risks not only his carefully cultivated image as an anti-corporate crusader but also (and more important) undermines the United States’ credibility as an honest partner in international trade relationships.
In his testimony, Strickland had this to say about the paper companies he was hoping to save:

Strickland made his case in terms of saving Ohio jobs and workers from the ravages of unfair international trade, but what he failed to mention was that he seeks trade sanctions so stiff and severe that both the Chinese and Indonesian governments are guaranteed to dispute them, even before they take effect, at the World Trade Organization. Retaliatory tariffs—which are sure to follow should Strickland get his way—could threaten thousands of American jobs and hurt millions of American consumers, in Ohio and around the country.

NewPage is the very type and model of a self-interested corporation that puts profit above all and isn’t ashamed to take political favors and government handouts in the course of doing business. That Strickland would go to back for such a corporation at all—much less defend it, by name, in federal testimony—while selling himself as the blue-collar champion of the working class is remarkable. That he does so while his allies compare his opponent to Gordon Gekko, who would be right at home in NewPage’s executive suite, suggests that he is either immune to irony or believes Ohio voters to be deaf, dumb, and illiterate. “Money never sleeps,” according to Gordon Gekko. Neither does hypocrisy.”

– Mytheos Holt covers Ohio for National Review Online’s Battle’10 blog.