June 2004
A cautionary tale for sales reps
A narrow ink-on-paper focus cost one sales rep his accounts and his job

Some time ago, the president of a printing company asked me to help him interview two prospective sales reps. I agreed immediately. I have always believed that increasing your sales force by one rep, let alone two, is a very exciting opportunity. I also knew that the owner of this firm understood that it’s highly unlikely you’re going to achieve the next level of growth without adding more sales reps. Your current sales team will generally give you incremental growth—something close to the rise of inflation or the rise of the GNP. However, for a company with sales under $5 million, hiring these candidates provided an exciting opportunity to become a $7 to $8 million organization, which in our industry is quite significant.

Both prospects had impressive resumes—they had worked for a large print shop for quite some time before deciding to join a much smaller firm. Their new employer couldn’t offer anywhere near the expertise or knowledge that was available to their customers at the bigger company, but the lure of more available accounts, quicker turnaround and lower prices, made the transition seem like a very good opportunity.
Unfortunately, this move was a disaster. The limitations at the new shop did prove to be huge challenges, and then the company was forced into receivership.

Coasting on price
I’d like to share a story that one of these sales reps told me. Here’s the background. When he worked for a large multinational printing company, he did a great deal of work with a fledgling mutual fund company. This company was owned by a smart, dynamic person who was determined that his organization would grow and be part of the financial boom of the second half of the ’90s and early part of this decade.
As the funds prospered, and the company grew, there was an ever-increasing need for printed material and the sales rep benefited from this phenomenal growth. He was at their offices every day, writing orders and filling a huge need because the company counted on his printing expertise and knowledge. This situation went on for many months and the sales rep enjoyed the rewards of an account with annual billings of more than $2 million.

Eventually, the mutual fund company hired a professional print buyer and, as you probably have already guessed, things started to change. Smaller jobs went to smaller printers who were thought to be more responsive and less expensive and the larger jobs were put under the microscope to make certain that the company was buying this work as competitively as possible.

There’s no question that the smaller jobs were not the printer’s strong suit but it certainly was knowledgeable about producing the larger jobs. However, it seems that the sales rep focused strictly on the ink on paper requirements for this company and not fulfilling all its communications needs. There was very little creative input other than providing a piece of paper with a price on it. The sales rep told me that the fund company president frequently asked him, “What are you doing for us?” and his response was basically the same. “I am giving your company the very best prices that we can possibly provide and yet they don’t seem to be good enough.” The questions from the president always had the an underlying meaning but the sales rep’s answers never changed.

Printers must
get involved with customers much earlier in the process
than when the file is turned over to us

Mindset for growth
The bottom line of this story is that all the work was eventually lost to his competitors, and since the sales rep had spent so much time on this one account and had neglected other customers, most of their work also went to other printers. It was at this point that the sales rep felt that going to a new company would re-energize him and give him a fresh start. This, of course, was not to be. Not a nice story.
The sales rep never really understood what the president was asking or saying to him. Clearly the president was looking for ideas and input for communicating with his unit holders using printed products in a much more creative way than what the sales rep was prepared to recommend or consider. Every unit holder of a mutual fund is bombarded with printed material, including quarterly statements and an annual report that, up until recently, the securities commission mandated must be mailed to each unit holder for every fund he or she held.

Consider other options. Rather than sending an entire multi-page book to everyone, even individuals who hold only one fund, send only the information relating to their fund. This reduces paper, press time and enormous amounts of money for postage. In today’s demanding business environment, printers must get involved with customers much earlier in the process than when a file is turned over to us. It’s becoming quite clear that survival, let alone growth, depends on this mindset.
Duncan McGregor was president of the former Arthurs-Jones Inc., a Toronto-based, award-winning commercial printer. He led the $5 million-a-year firm to a five-fold increase in sales. He is now a consultant to the printing industry and can be reached at (416) 487-7666.
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