Analysis. Top Ten Best Practices for Adding Cross-media Marketing Services. February Service Area. Comments or Questions?

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1 Analysis February 2012 Top Ten Best Practices for Adding Cross-media Marketing Services Service Area Business Development Strategies Comments or Questions?

2 Table of Contents Introduction... 3 Evolution in Full Swing... 3 Top 10 Best Practices ) Leadership Focus on Marketing and Business Development ) Repositioning: If You Smell Like Printer Marketers Will Run ) Identify and Solve a Chronic Business Problem ) The Conversation is on the Solutions Tactics, Strategies, Goals NOT Print ) Walk the Talk and Self-Promote! ) Educate Customers ) Educate Staff ) Team Selling Seals the Deal ) Price = Value to the Buyer ) Success Doesn t Happen Overnight, Be Patient... 8 About the Author... 9 List of Figures Figure 1: Nearly 87% of Print Service Providers Offer or Plan to Offer Cross-Media Marketing Services... 3 Figure 2: Which of the following best describes your primary area of responsibility?... 4 InfoTrends

3 Introduction Print service providers have repeatedly heard that the key to survival is to expand their offering beyond print to include a host of media options backed by marketing services. However, that message was seldom backed by solid how-to strategies. InfoTrends conducted a research study titled The Evolution of the Cross-Media Marketing Services Provider to assess the current state of the move into cross-media marketing services and identify the best practices for successfully making the transition. This paper offers a synopsis of the top ten best practices identified by the research. The study included surveys from more than 280 print service providers offering crossmedia marketing services, and telephone interviews with 30 profitable firms that made the transition to offering cross-media marketing services. These interviews were conducted under the condition that participants names and their firms would be held in confidence. The results of those interviews (but not the identities of the respondents), along with select survey results, will be shared in this article. Evolution in Full Swing The survey revealed that print service providers understand the critical importance of moving into cross-media marketing services and are adding these services to their mix. InfoTrends defines cross-media marketing services as the use of two or more media types print, , Web, mobile, and/or social media (Facebook or Twitter) supported by marketing services, such as creative, campaign management, and data analytics. Of the 285 respondents to the survey, 58% report they currently offer some level of crossmedia services. Furthermore, nearly 87% of respondents were offering services today or had plans to start offering them within the next 24 months. Figure 1: Nearly 87% of Print Service Providers Offer or Plan to Offer Cross-Media Marketing Services No, and we have no plans to start 13.3% Yes, we have offered them for more than 24 months 19.6% No, but we plan to offer them within months 14.7% No, but we plan to offer them within 12 months 13.7% Yes, we have offered them for less than 12 months 23.2% N = 285 Print-for-Pay Respondents Source: The Evolution of the Cross-Media and Marketing Services Provider, InfoTrends 2011 Yes, we have offered them for months 15.4% InfoTrends

4 Top 10 Best Practices 1) Leadership Focus on Marketing and Business Development Success in offering cross-media marketing services requires leadership with a focus on marketing and new business development. Firms reporting offering cross-media marketing services (compared to those who were not) were more focused on sales, marketing, and business development. This chart compares responses from firms that offered these services and those that did not. Firms offering cross-media marketing services were twice as likely to indicate that sales, marketing, and business development was their primary area of responsibility. It is worth noting that the majority of respondents to the study (90%) were executives. Figure 2: Which of the following best describes your primary area of responsibility? Which of the following best describes your primary area of responsibility? General Management Print Production Information Technology / Software Development Customer Service Other 100% 80% 60% 40% 20% 5% 42% 21% 43% Sales / Marketing / Business Development Prepress / Premedia Graphic / Web Design Finishing / Binding / Mailing 6% 53% Cross-Media firms are more likely to have a focus on sales, marketing, and business development 0% N = Base = Print-for-Pay Respondents 2) Repositioning: If You Smell Like Printer Marketers Will Run Firms offering cross-media marketing services were more likely to describe themselves as cross-media marketing service providers or marketing service providers. The majority of firms interviewed all repositioned their firms by either dropping print from their name, keeping print and adding other descriptors, or creating a spin-off company. It was done with good reason, as a common theme expressed by firms interviewed was, If you smell like a printer, marketers will run. Describing the need for repositioning, the marketing director of 120-employee firm with $20 million in revenues said, If a marketer hears the word print, they send us to the purchasing. Or if they hear the word print, they tell us they are skeptical in our abilities to service their needs. Offer Cross-Media Marketing Services Source: The Evolution of the Cross-Media Marketing Services Provider, InfoTrends 2011 Don't Offer Cross-Media Marketing Services InfoTrends

5 Still, it is important not to lose sight of the fact that print production is the major revenue generator for many firms. The president of a 46-employee cross-media marketing services provider in the Midwest summed things up by advising, Don t ignore print sales when chasing cross-media solution sales. If I had the chance to do it all over, I would start another company for cross-media marketing offerings while letting the print company handle the printing. Ultimately, the print business keeps the lights on. 3) Identify and Solve a Chronic Business Problem Firms that have successfully evolved into cross-media marketing service providers reported that a key catalyst to capturing business is identifying a unique business problem in a particular market and solving it. Once a solution for one market segment or industry is built, it can be repurposed for others. The CEO of a 65-employee provider in the Southwest pointed out, When attempting to solve customers problems, you must first identify the gates you have to pass through. Then you need to build a super-efficient workflow with as few touchpoints as possible, because touches cost money. 4) The Conversation is on the Solutions Tactics, Strategies, Goals NOT Print A common message among leading cross-media marketing services firms was to stop talking about print and frame the discussion into business language that solves the client s problem, such as: Driving in-store traffic and revenue per store Re-igniting relationships with orphan customers Speeding up and automating the moving parts of complex and fast-moving campaigns Marketing smarter and outwit the competition Profitable firms acknowledged that while print remained a staple of their offering, the trick is to focus clients on the actual solution and its potential results rather than stressing the print component. The President of a 46-employee firm that successfully made the cross-media transition had an astute observation on the role change that must occur in making the transition. He said, Printers are used to taking direction and marketers are used to giving direction. Printers must evolve and become comfortable with giving orders as well as taking them. InfoTrends

6 5) Walk the Talk and Self-Promote! Educating customers and demonstrating credibility are critical success factors in offering cross-media services. In many cases, customers are not asking for cross-media services because they do not know what they are, or they do not realize that the firms they buy print from offer these services. To fill in the customer knowledge gap, the cross-media marketing service providers InfoTrends interviewed reported a mix of self-promotion efforts that included developing educational events, creating contests, entering awards competitions to grain recognition, producing promotional pieces that demonstrated competency in the ability to deliver on all facets of a cross-media campaign, and documenting efforts in a case study that is accessible to clients and prospects. Commenting on the importance of self-promoting cross-media marketing services, the senior VP of business development at a 50-employee firm in the Midwest noted, Customers need to know what you are doing. When you are selling pure print, this it is an easy process because you just send samples. With cross-media marketing services, you need a history of showing what you can do. We have found that self-promotion and written case studies on the cross-media work we ve done help to demonstrate credibility. Amplifying that message, the president of quick printing franchise with 25 employees and $3.6 million in annual revenue added, Plain and simple if you don t buy into selfpromotion, you will fail. The campaigns we ve sold came from testing our clients with our own campaigns. The firm s cross-media marketing services business grew because of its self-promotion and educational outreach. Customers now actively approach the company for cross-media services in addition to print. 6) Educate Customers A number of firms interviewed reported hosting recurring educational events, both virtual and brick-and-mortar. The senior VP of business development for a cross-media marketing services provider in the Midwest reported that his firm created an ongoing branded customer education forum. The program consists of a conference event, ongoing Webinars, an e-newsletter, an educational Website, and a printed magazine. We came back from an industry users group event and were extremely motivated by the cross-media opportunities we heard about. So we decided to take that model and see if we could motivate our customers in the same way, he recalled. What we developed was a program that is non-threatening to customers. The event is about knowledge sharing and peer exchange, and it is winning us new customers. A firm with 54 employees in the mid-atlantic region reported setting up a university for customers offering monthly educational programs. The training is held in a live InfoTrends

7 classroom environment to facilitate learning and forge personal relationships, as well as through replays of the classes available online. The company also provides clients with access to free white papers and case studies on its Website. Customers provide their contact information to receive the white papers, thus generating sales leads. 7) Educate Staff Educating and training staff beyond technical training was a common practice among top providers. Self-education is a critical phase in the evolution, reported the president of a quick printing franchise with 25 employees and $3.6 million in sales. Our team spent an enormous amount of time learning about all of the channels in a multi-channel marketing campaign. We all became experts in Web, digital, mobile, social, QR codes, etc. To be successful in the sales process, you have to understand the process and make it simple so that your clients understand it too. This company relied on vendor education to get its staff up to speed. Overcoming a resistance to change was identified as a real phenomenon among firms making the cross-media transition. Education is a tool that can help overcome resistance to change. The president of a $30 million cross-media marketing services firm in the Southwest revealed, People were the biggest barrier [to making the change]. They had to learn how to write proposals and to be able to explain and articulate the company s value proposition. To help address this challenge, the firm hired an outside party to coach its staff. Furthermore, all sales personal were trained in consultative selling. 8) Team Selling Seals the Deal Successful providers of cross-media marketing services report that placing full responsibility for selling these services on the sales team has not worked. Instead, they are using a team selling approach that includes its various project experts (e.g., marketing, data, IT). According to the marketing VP at a large firm in the Midwest, Sales is the scouting team for deals; we ve found it ineffective to put everything on the salesperson. Instead, the entire team is involved when making presentations to clients. Sales identifies and qualifies the opportunities and builds the relationship, but the team collaborates to pitch the solution. This team sales approach was echoed by several of the firms interviewed. A number of firms reported recasting sales responsibilities to have account managers focus on selling to existing clients, while sales reps pursued new business. A few firms reported moving customer service reps into account management positions once the sale is complete, the idea is that these folks will take over the process of managing and growing the account. InfoTrends

8 9) Price = Value to the Buyer Pricing is a critical factor in profitably offering cross-media marketing services. Indeed, uncertainty about client acceptance (43%), moving customers from a per-unit pricing mentality (34%), and determining real costs and overhead (34%) were the top challenges sited by survey respondents. An analysis of pricing levels reported by respondents indicated that firms that offered these services longer charged more. It is important for firms new to cross-media to avoid giving away services to win print work and set pricing based on the value to buyer. Pricing is an art form and a juggling act. Firms interviewed reported that while some elements of the price are standard, most of the pricing is based on scoping individual project requirements to determine baseline costs, marking up costs to achieve preferred margins, all while considering the customers budget requirements. We estimate our costs based on hours to complete and raw materials consumed, then buffer that by 25% to get a baseline, explained the VP of cross-media marketing services at a 54-employee firm in the Northeast. The baseline is a check that we are covering our costs, not the final price. The street value is based on how the customer will benefit from the work in terms of increased revenues, lower costs, optimized processes, etc. We ve sold work at 20 times the baseline; the final sales price is based on what we bring to the table. To guide firms in making pricing decisions, InfoTrends released a new study titled Pricing Cross-Media Marketing Services that includes how firms are charging, what they are charging, and how pricing is presented to clients. 10) Success Doesn t Happen Overnight, Be Patient The firms that we interviewed were quick to point out that success was the result of trial and error. A number of firms reported investing in services that they thought clients would rush out to purchase, like personalized URLs and database-driving multi-channel marketing campaigns only to find that the sales process took much longer than anticipated. Many of these new services make you think you have magic dust and everyone will buy it, reported the senior VP of business development at a 50-employee firm in the Midwest. There isn t a magic dust, though you have to find the right person and the right pitch. This material is prepared specifically for clients of InfoTrends, Inc. The opinions expressed represent our interpretation and analysis of information generally available to the public or released by responsible individuals in the subject companies. We believe that the sources of information on which our material is based are reliable and we have applied our best professional judgment to the data obtained InfoTrends

9 About the Author Lisa Cross Senior Consultant Lisa Cross is a Senior Consultant for InfoTrends Business Development Strategies service. She is responsible for conducting market research, supporting market forecast estimates, managing custom consulting projects, and reporting on industry events. Comments or Questions? InfoTrends