It is easy to hear the success stories of businesses that have gone to the moon, but most of these business owners have lived through tough times as well.  Just read a book on Edison’s life and you will see the # of failures he had before his great invention.

Recently a business owner closed his doors, but shared his lessons learned with “What They Think”, an organization focused on sharing lessons with the printing industry.  Below is an interview and details.  Any business owner dealing with this economy can take some valuable lessons from this.

The Rise and Fall of Mallard Press

By Cary Sherburne
Published: October 12, 2009

The recent closure of Mallard Press caught our eye. While I don’t know Bob Gay or the company personally, a review of its web site revealed a company that appeared to be on the right track and making the right investments for the future.  Bob Gay was kind enough to speak frankly with us about the factors that led to the demise of the company.  Perhaps there are lessons here for others in the industry who may be teetering on the edge or worried about the future. Mallard Press was an independently owned and operated commercial printing business that had been in operation in the Chicago area for 30 years.  At its peak, it brought in revenues of over $5 million.  Here’s what Bob had to say. In Part One of the article, he discusses what happened; in Part Two, we move to what perhaps should have happened.

WTT: Bob, what would you say was the major contributing factor that led to closing the business?

BG: My biggest problem was that I had taken on too much debt.  I had made investments that were required to take my business where I wanted it to go, and I had about three and a half years to the finish line.  We were doing fine until about December of 2007, which was our first bad month, with sales off 18%. I remember seeing those numbers as if it were yesterday.

WTT: What were some of those investments?

BG: We had invested in Canon color and black & white digital to the tune of $10,000 to $15,000 per month.  We were into Komori for about $14,000 per month.  And the KBA press, which is a marvelous press and probably the most versatile printing press in the world, bar none, was an $11,000-per-month investment.  That is a lot of debt service for a company with $5 million in revenues.  We were building to grow, but any downtick in revenues was painful because of that debt service.

WTT: When you saw the December 2007 results, what actions did you take?

BG: We did make some adjustments to the business, and as a result were able to go through the spring of 2008 fairly strong, although the June through September period was below average, down 15-20%.  It gets tough to recover from four months of consecutive losses.

WTT: To what did you attribute the revenue decline?

BG: To a change in customer buying habits.  We did an analysis of our client base.  We were not losing clients; they were just spending less, due to the economy and possibly to more use of electronic media.

WTT: So what did you do next?

BG: We then looked at increasing our client base through acquisitions.  AGS, a die cutting operation, was basically closing its doors and we made a deal with them that would keep their company together, because the services they offered were services we were outsourcing anyway. There was also another company that was closing its doors and we purchased some of their assets as well. This was about $2 million in business and we took 10 of their 18 employees on board. As a result of all of that, we had a terrific December.

WTT: Then what happened as the new year began?

BG: From January through now, everything tailed off.  Sales were down 27%.  We again looked at our customer base, and it was the same Top Ten customers, but their sales volumes were down.  We even had some loyal print brokers that were getting less work for the same reason—their customers were also dialing down.

WTT: I am sure all of this must have led to some painful decisions.

BG: Absolutely.  We made some first quarter adjustments to get things in line, but I knew that it wasn’t going to be enough.  After the second quarter, I really needed to make some deep cuts.  This was extremely painful, because people who had done nothing wrong were losing their jobs.  The remaining staff took pay cuts to keep their jobs.

WTT: In hindsight, would you have made staff cuts earlier?

BG: Yes, but I was slow to do so because it is just not in my nature.  These people worked hard, and I was optimistic that the services we provided would help bring the business back.  This is how we had always survived before—because of our diversification.  If one area was not performing, the other two areas could pick up the slack.  But with the decrease in sales and additional 10 employees, I increased payroll by $400,000 but only increased sales by 1.5%. I was operating as a man in business, not a businessman.  A businessman would have made the cuts sooner, but the man in business had hoped it would come back.

WTT: What else did you do to try to salvage the situation?

BG: We went to the equipment finance companies, Wells Fargo, GE and IKON Financial, and working with them was tremendous; they were all on board to help us. We were able to negotiate six months interest only payments to help us weather the storm and work to get our sales up.  We also went to our landlord to see what they would be willing to do.  We let them know that others were participating and we weren’t just coming to them for help.  They were a bit reluctant to help and I basically had to sell my soul a little to get their cooperation.  They gave us six months at half rent, but the negotiations gave them the full right to kick us out if they didn’t think I was going to perform after these six months.

WTT: I take it that resulted in the crowning blow, then.

BG: About three-quarters of the way through the process, we provided the landlord with a financial statement per the agreement.  It was a bad June and we were not making any headway.  They performed their fiduciary responsibility to their shareholders by exercising their right to evict.  We looked around for other spaces and looked to our lender for some additional support.  Even though we eliminated 12 employees and took some other steps that brought us back to break-even, our lender decided not to extend our line of credit or to provide us with the funding to move the business to a different location.

WTT: Why was that? Presumably you had been doing business with them for a long time.

BG: Yes, but their position was that we were maxed out on our line of credit with no good outlook for being able to pay it all back, and they were simply not in a position to lend us the $100,000 or more it would have cost us to move.  This was on a Friday afternoon, and rather abruptly, the next Monday, per the request of the bank, the company went into receivership in order to pay down the line of credit and the other creditors as well as take control of all receivables.  That obviously brought the business to a screeching halt.

WTT: Why do you think the banks took that position after working with you for so long?

BG: I have probably always been the exception when they have discussions in their board room.  I can just hear the discussions:  “They are out of factor, but Bob has a passion for the business and we believe in what he is doing. He has built a unique company that has advantages over standard printing companies, and he will be a survivor.  He has done it before.” To be honest with you, in 2008, I was swinging back and forth between being three to five months behind in rent.  I never thought 2009 sales would still just not materialize. Clients are simply buying differently, and I don’t know if those levels are going to continue to decline or whether they are even going to continue to use print in many cases.

WTT: What about all of the government talk about bailing out small businesses, stimulus, TARP and all of that?  Did you try for any of that money?

BG: Sure did.  I asked about an SBA loan that could spread the short-term debt over a longer term with a lower interest rate and I couldn’t even get that. Now 38 people are without jobs. So much for economic stimulus.

Read the second half of this interview

Recently there was a discussion between business owners who were concerned with surveying their customers and causing a negative reaction. They shared how much they hate getting surveys. In a Business to Consumer relationship many times we get pounded with surveys and get numb to them hitting “delete” as quick as we can. But, I would warn you not to generalize. Know thy customer!

Depends on the relationship one has with the specific supplier, how important that supplier is to their business, how long the survey it, and most importantly if the company responses quickly the first time the customer shares their thoughts. If I have a good ongoing relationship with the supplier as a partner, they are important to my well being, the survey is short and covers points most interesting to me and not you, and the company responds quickly maybe even call me, then I feel it is a way to get things changed and get a reaction. I will fill out surveys for them.

Example, if I have a partnership type relationship with my printer, rely on them to perform to drive marketing efforts, the survey takes a minute, and they call to discuss, then I DO NOT get survey burn-out.

If you are just another printer, who puts out average work with no skin in my game, the survey doesn’t respect my time, and you do nothing when I gave feedback of any kind in the past, then I hate to get your survey, wouldn’t take it, and WOULD get survey burnt out quickly. I would be burnt out the first time I got a survey and maybe even use it as an excuse to stop using you because I was thinking of moving on anyway and needed a reason.

We get so many surveys, but the ones I take are the ones where I respect their business, enjoy working with them, they know me, or I know they will do something with my information.

I would argue that burnout is an indication that the supplier is missing something in their relationship with the customer or they lack an understanding of how frequently to go to the well for feedback or how to approach customers for feedback.

In the September 25th issue of the On-Demand E-Newsletter issue, Survey Advantage President, Michael Casey, shares with the community effective ways of implementing best practice surveying processes to stay connected with print buyers.

Read the article

Survey Advantage now is offering busy managers the ability to view recorded trainings focused on customer retention, client share expansion, and referral generation, on-demand.  Many times managers and business owners are unable to make the specific days and times of our webinars due to their busy schedule. 

We have released several 7 to 8 minute, recorded trainings to explain how to survey using different printer MIS installations; PrintSmith, Printer’s Plan, Technique, Enterprise Print Management Solutions, Printer’s Plus, and a session on how to survey using all other MIS installations.   To view the on-demand library and select your specific printer MIS, visit www.surveyadvantage.com/printers.

We are planning to release several new trainings in the future focused on our other verticals; marine services, association research, business services, parking facility feedback, manufacturing, education, finance, and healthcare.

At this year’s convention Survey Advantage will highlight two new programs;  CustomerPulse for Printer’s Plan 2010 and CustomerPulse for PrintSmith.  Survey Advantage now works closely with both MIS providers to help franchisee owners survey customers after print jobs are completed.  Survey Advantage has worked closely with franchisee owners of all Allegra Network’s the brands; Signs Now, Allegra Print & Imaging, American Speedy, and Insty Prints, offering  owners customer loyalty, lead generation, revenue retention programs that are affordable for the small business owner.  

Survey Advantage invites all attendees to visit us in booth 525  for a demo.

Phoenix, AZ:  Survey Advantage introduced three new printer programs to several members during an introduction July 27th at the headquarters of Printing Industries of Arizona.  Survey Advantage will offer CustomerPulse, HealthCheck, and MarketCheck to PIAZ members interested in revenue preservation, client share expansion, and lead generation.  CustomerPulse is designed to help printers obtain immediate feedback after jobs are completed while HealthCheck and MarketCheck are designed to help printers during strategic planning and ISO 9000 process improvement efforts.

In San Diego, CA during Franchise Services annual owners conference Survey Advantage and Printer’s Plan co-presented the newest version of Printer’s Plan and how surveying customers after jobs just got easier within the application.  The new features of 2010 now flag the last time customers were surveyed to help manage survey frequency.  In addition, the smartlink of Survey Advantage pulls in the job number from Printer’s Plan enabling printers to quickly and effectively follow-up with customers.

Print ’09, the largest printing show in North America, will be in Chicago from September 11-16th.   Survey Advantage president Michael Casey has been asked to lead a presentation on Monday, September 14th from 2:15PM to 4:00PM.   Please read the overview below or visit www.myprint09.com for more details.  

Topic: Creating and managing a customer retention strategy

On average 5% of a printer’s revenue is directed to the marketing budget to capture new customers through tradeshows, advertising, and get your name recognized on the cluttered field of printers.  Printer’s with an effective, deliberate customer retention strategy benefit from lower marketing expenses through higher client share and customer referrals.  Rarely does a printer lose an account completely, but many will lose client share if they don’t have an effective early warning system in place when a specific job goes out with a problem.  This session will discuss ways printers have implemented programs to retain customers by driving loyalty, proactively gathering print job feedback, customizing services, and making their customers feel unique and special.  Multiple studies have proven how much more profitable it is to grow revenues with existing accounts versus pursuing new accounts.  Retaining customers is the best way to keep your business healthy, reduce marketing budgets, and drive referrals to your door.

What you will learn
• Effective customer retention strategies
• Printer loyalty programs
• Printer referral programs
• Printer loyalty benchmarks to shoot for
• The importance of surveys
• Best practice survey techniques
• Low cost customer feedback process
• Customer service processes to consider

Presentation for Executive Management, Owners, Customer Service Directors and Managers, Sales and Marketing Directors and Managers

From October 29th-31st, 2009 the National Association of Quick Printers will hold their annual conference in Austin, TX.  Survey Advantage has been asked to present a session and moderate a session.  Below is a summary of each session.  Please visit www.naqp.com for more details on the conference.

Session 1: “Leveraging Customer Feedback to Expand Client Share, Drive Referrals, and Preserve Recurring Revenues”  Mike Casey, Survey Advantage

Learn how printers have implemented processes to preserve recurring job revenues, drive referrals, and uncover opportunities to expand client share. Learn how to fully leverage your existing relationships to grow your business. This session will also cover ways to streamline the process by using technology and customer information you already have in your operation.

Session 2: “Panel: How to keep customers coming back for more” Moderator, Mike Casey, Survey Advantage

A prerequisite to being a printer today is producing quality on time. And everyone has solid customer service so there goes that differentiator! Your peers will share how they create and maintain loyal relationships by making their customers feel unique and special and change the game for competition knocking on their customer’s doors. Learn what successful, profitable printers are doing beyond shipping quality on time with great customer service. Learn the little and big things they do that keep customers coming back every time.

Associations, corporations, non-profits, small business owners always ask this question.  It is a loaded question, but here are a few things to consider.  Response rates can vary from <10% to >80% depending on a lot of things and how you approach the study.
 
1) Topic is very important.  How important is it to them to share their brain and heart??  Get inside their head and know their appetite for the topic you are throwing at them. 
 
2) Positioning is important.  You must sell the idea to participate.  I am not saying with incentives, but tell them why it is important TO THEM. 
 
3) Know your audience.  If your members are really engaged with you, you share lessons learned from previous surveys, then you have a great foundation for high response rates.  
 
4) If you don’t send out a survey a week to members then you have a good foundation.  Surveys should have meaning and pick your battles when asking members for help.
 
5) Try to keep them short whenever possible and tell them that.  “This is a five question survey that will only take 2 minutes”.  That will get better response then “This is a 125 question survey that will take you what feels like forever”. 
 
6) Think about each question before you send it to them.  Wording, clarity of purpose, understanding what information you want back and what format should be taken into account.
 
These all may seem obvious, but it is amazing how many surveys I get that start asking my gender, marital status, and income when frankly there is nothing in it for me, it is wasting my time, and I wonder what they plan to do with that information to get at me!   I just received a birthday card last week for a trip to the Virgin Islands.  It was my birthday the week before and that scared the *&*() out of me because they don’t know me, I don’t know them, it was a scam mailer, and I wonder what else they know about me.   Be relevant and respect your audience.