Diversify Your Buckets

What do you print? That's not the same as: What print manufacturing processes does your business have? The first thing I want to understand about your print business is the communication product you manufacture and its job in the marketplace.

If you print election ballots, they provide a key part of the execution of a democratic government. If you print restaurant menus, they enable restaurant customers to make their meal decisions. If you print parking passes, you enable folks to safely park in restricted areas. You get the idea. 

I prefer to start at the “job level” because the threat of a shift to digital alternatives is one of the first things I assess when I try to understand a print business. Is your current print work at risk of being replaced with digital alternatives? This is a fact of life in the market we live in—and COVID-19 just accelerated a lot of “jobs” from analog to digital that I thought would hang on for much longer.

The job a printed piece does leads us to the customer who requested it, and that leads us to customer segmentation. Understanding the segments of your current customer base is really important. In 2020, COVID-19 crushed some market sectors—like retail and restaurants—and exploded other sectors—like labels and packaging. I’ve spoken with some printers whose businesses dropped by 30% because an entire sector of their business went dormant, but luckily they had the other 70% to carry them through. Turns out, diversity is always a good idea, in employees, in customers, in stock market portfolios, and of course in nature. Diversity hedges you against complete failure. Do you know if you have a diverse portfolio of customers? This is where customer segmentation comes into play.

Your next step is not to go purchase a Salesforce license. This isn’t a technology problem (yet) and most people who jump into thinking an investment in a CRM is the answer often fail to solve the most fundamental challenges of not understanding their basic market segmentation as soon as possible. We have a tendency to overcomplicate and aim for perfection only to fail to make simple, actionable progress. You have a set of customers—let's say anyone who has transacted with your company in the last 24 months. Then you have patterns within this group of customers. Customer segmentation is about finding the patterns. Define market segments. Don’t overcomplicate this by trying to use terms or definitions that aren’t familiar to your team. Group your current customers into market segments that make sense to you, like pharma, higher ed, technology, travel & leisure, etc.

Once you have put each of your customers into a segment bucket, group them by buckets and start thinking about what you print for them.  Again, you’ll find patterns. Then pull some numbers from your Print MIS and put values to the buckets. This will give you a sense of the “weight” of each market segment. You have a basic marketing segmentation. Discuss this with your sales team. This simple exercise can initiate all kinds of good ideas and strategy adjustments. Individual sales representatives might not be aware of all the market segments you already do business with. You (as the owner) might not be aware of how dependent you are on a single market segment. The last task should be done with some outside, non-biased assistance. Describe the “jobs” your printed products do in each market segment. Ask the following questions:

1. Is there currently a digital alternative that could do the job your printed product is doing?
2. What are the advantages of the digital alternative? (Pretend you’re in a high school debate and you have to debate the opposing view.)
3. How likely is your current business in this sector to be replaced by digital alternative(s)? When?
4. What are the advantages of the printed product? Is your customer maximizing these advantages?

The results of this simple exercise can help you direct sales efforts to more “stable” market segments producing a more diverse customer segmentation. I know what you’re saying: We’ll take any customers we can make money on! Yes, we all know that standard, but having the data can make the cold calling more strategic. It could also impact acquisitions or investments in equipment as you specialize and differentiate.