Establishing Customer Loyalty

Many printing company managers would argue that customer loyalty is dead, the victim of corporate America's ongoing quest to reduce costs. Still, some printing executives and industry consultants have discovered tools and unlocked strategies by which to cement relationships with customers even in markets where price rules.

"Loyalty today is not the same as it was 10 years ago because the business challenges faced by our customers have changed," reports Sylvia Konkel, vice president of marketing and public relations for EU Services, Rockville, Md., a full-service direct-mail provider with annual sales of $40.3 million. She adds, "I sense that many clients want to be more loyal, but sometimes their financial obligations are stronger than their ties with us."

Making an extra effort to cultivate customer loyalty is more important since printing has become a commodity, explains Rich Schildgen, president of CL Graphics, a Crystal Lake, Ill.-based printer of direct-mail, newsletter, and general commercial work. The company, with 16 employees and $1.7 million in annual sales, offers clients everything from design and photography to printing and fulfillment.

CL Graphics also offers various seminars for customers, such as graphic design, prepress for designers, prepress for buyers, postal classification and mailing, nonprofit print services, direct-mail marketing, paper, newsletters, and page layout.

Schildgen says that his firm's efforts to create loyalty have helped keep sales steady in a tough market.

"Our research absolutely proves that relationships lead to loyalty, and profit is very closely tied to customer loyalty," reports Dallas Dort, president of eKG Research Associates, a consultancy in Flint, Mich. Among its services, eKG offers printer clients a written, quantitative survey that measures customer satisfaction and their competitive position in the eyes of its customers.

"Selling relationships starts with approaching senior management in a client company, which is not easily accessible to sales reps but attainable to printing company owners and executives," says Dort.

Yet he believes that owners and executives are naïve about how much time they should invest in developing such relationships. "Somebody has to open the door for sales people because they can't get past the gatekeepers. There's simply no better alternative than for senior owners and managers to be an active, daily, continuous part of the relationship selling process," contends Dort.

Overall, he says, the huge obstacle to building and sustaining customer loyalty is top management commitment. The few printing firms that succeed at relationship selling, says Dort, are those in which the owner is deeply involved.

In the view of Sid Chadwick, president of Chadwick Consulting, Lewisville, N.C., periodic meetings between executives of buyer and supplier companies represent a powerful tool for retaining customers. For example, executives of EU Services hold annual relationship meetings with executives of its client companies. But setting up these events was no small task, says Konkel, who reports that the effort took years and lots of persistence.

On the other hand, while building relationships is extremely important, there is the risk that closer client bonds can impede honest communication, warns Suzanne Morgan, president of Print Buyers Online.com, Arlington, Va., an Internet-based educational community of print buyers.

"The closer the relationship between a printer and print buyer, the harder it is for the buyer to speak up when something is wrong. That's why it's really important for printers not to be complacent and to continually work at demonstrating resourcefulness, problem solving, and finding ways to make the relationship easy," explains Morgan.

Morgan advises printers to focus on finding ways to save time for buyers. "Instead of the buyer having to make telephone calls to check on job status, printers can offer on-line job tracking," she says.

A critical component to understanding customer loyalty is learning what customers and employees think about a company, advises Gregg Van Wert, principal of The Haven Group, a consulting firm located in Oakland, N.J. He says, "Employees affect loyalty because they interact with customers."

Van Wert developed two Internet-based survey tools to gauge employee satisfaction and customer loyalty. One tool examines 80 data points that are consistent from survey to survey and collapses them into 15 benchmarks that measure progress in achieving customer expectations and changing customer perceptions.

The results are used to generate a competitive market position analysis that:

• reveals gaps between customers' expectations and a company's performance;
• validates a firm's sales messages to individual customers;
• identifies aspects of performance that influence customers to choose alternative print vendors;
• segments data by salesperson, to pinpoint where additional sales training is needed; and
• benchmarks strengths and weaknesses.

James R. Schultz of Great Lakes Integrated used The Haven Group's customer scorecard, then decided to pursue investments in digital printing.

"We'd always been considered a high-end larger-format sheetfed printer, so we weren't certain of market reaction if we got into digital printing," recalls Schultz, chairman, president, and chief executive of the Cleveland-based company, which bills more than $25 million annually. "But the survey results revealed that our customers wanted us to get into that field to round out our services."

Schultz also uses the survey data in formulating strategic, operational, and sales plans. "These surveys help determine what direction to take, because even though printers need to diversify, we can't afford to make investment mistakes," he notes.

Schultz says that the days of purchasing equipment and assuming that market demand will develop are over; instead, investments must be based on an understanding of customer needs.

"There's been a drastic change in print buyers' wants over the past 10 years," observes Karen Mikula, founder of The Training Difference, Basking Ridge, N.J., "so to retain customers today, printers must change how they serve them."

Mikula bases her opinion on the results of two studies conducted a decade apart measuring why print buyers changed suppliers. She conducted the earlier study for the National Association for Printing Leadership, while Print Buyers Online.com conducted the most recent poll (see sidebar below).

"These buyer shifts indicate that the definition of service has changed, and that customers want what they need, when they need it," explains Mikula. "Buyers value a supplier that's not just going to provide a printed piece, but will help them be more successful."

Morgan agrees, saying, "Buyers want their printing sales reps to bring in new ideas, and to help answer their questions."

CL Graphics feels it is such a printer. "We consider ourselves to be a resource for our customers, one that can help them on issues beyond ink on paper," reports Schildgen.

EU Services, which developed a supplier partner program designed to build on factors that foster loyalty, strives to be a resource to help clients find the services they need. Says Konkel, "We have to come through for our clients no matter what, which is what we try to convey to all our customers." The approach has yielded results: the typical customer has been with EU Services for eight years, and some have been clients for the company's entire 35-year history.

Printing companies need to maintain current information about customers, which they can then use to create value, says Chadwick. "This is basic information: key personnel, with correct spelling of names; issues not to be discussed; alternate contact in the absence of the lead buyer; delivery requirements; and any detail that makes things easier and predictable for the buyer," he says.

Beyond that, he adds, printers that understand their customers' business conditions, objectives, and priorities give customers good reasons to build long-term relationships. "In other words, to be proactive, identify the source of a buyer's 'pain,' " says Chadwick. "Not only that, but appreciate that buyers don't have time for a sales rep who doesn't understand their business, and they certainly don't have time to do the training."