During my printing sales days, I had two different individuals as customers. One was a purchasing manager for an economy hotel chain (not a good combination to start off with). Her philosophy was that no supplier was going to make a profit from her. She was just brutal. She would ask for prices for three quantities and then expect the price per 1,000 from the highest quantity even though she ordered the lowest quantity. She would ask for artwork, then give the job to another printer and expect the art for free if you wanted other jobs down the road. She even convinced one printer to produce four-colour catalogues for free to hang on to her business. We finally fired her as a customer figuring that no work was better than any of her work. As a result, we actually saved money and retrieved a little of our sanity.

The other customer was a purchasing manager (already doesn’t sound good, but wait) who actually knew something about printing. We printed one- and two-colour labels for him on coated-one-side stock, usually in small quantities. One day he asked us to quote on some four-colour sales sheets. We had just got into four-colour printing so I really wanted the order. I low-balled the price and went to see him. He looked at my quote and told me that at those prices we wouldn’t get the job. Our prices were too low and there was no way we would make any money on it. (He was right.) Then he told me that if I added about 20% to the job we would get it.

He explained his reasoning like this: if we made no money on his work then we might not come through for him when he was in a real bind and really needed us. The labels we did for him were worth a lot less than the sales sheets but went on an assembly line that cost thousands of dollars per hour to run. If his people screwed up and ran out of labels for the line, the cost of the downtime wildly exceeded the cost of the printing.

Of the two accounts, it’s obvious who got the stellar service and support. We even gave the label guy some ideas we picked up from another company in a different industry. After we fired the hotel company we ended up doing a lot of work for one of its competitors, whom we went out of our way to help, almost in retribution for the hell we had been put through.

Taking this one step further, have you wondered what’s happening to your suppliers? Are they getting squeezed so bad that they can’t make a profit no matter what? I am not saying suppliers have to make a fortune from every customer or that they should be driving Ferraris. I’m saying that if suppliers can’t make some sort of reasonable return on investment, something is going to give. The exit of a number of companies from the paper business is an indication of this. As the number of suppliers declines, so do choices, flexibility and service. The printing industry is still a service industry, and when choices decrease so does our industry’s ability to service customers.

I remember about a year ago a printer who did a lot of business cards and stationery closed down because he felt that it just wasn’t worth it to stay in business even though he was debt-free and the company had been around since the ’40s. He had been pressured to keep lowering his prices. After he closed down, many of his customers, including some print brokers and other printers, found that when they went to other printers their costs went up 30% to 40% and the turnaround time increased. If your customer isn’t making money you know that’s not good but if your suppliers aren’t making money, that isn’t good either.