It's time to get tough with customers

I began writing this column on a day when the best part of 4,000 job losses were announced across a plethora of UK businesses. This was followed swiftly by the quarterly Bellwether report on marketing spend, which revealed budgets were being slashed on an unprecedented scale. Then came a British Chambers of Commerce survey that described the downturn as deepening at an alarming pace and what was described as a "frightening deterioration" in the economy. The results were the worst since the survey started 20 years ago.

Resisting the urge to fret about global events that are beyond one’s control is a skill I’m attempting to hone, but the news has been depressing and alarming in equal measure – and that’s without studying goings on specific to the printing industry.

It started me thinking about what types of business will be able to keep their proverbial chins up during this downturn. That in turn reminded me of something a speaker said at last year’s Vision in Print conference.

With hindsight, the event’s title, ‘How to survive and thrive in a print recession’, could hardly have been more apposite, although the word ‘print’ could perhaps have been replaced with ‘global’.

Interflex operations director Andrew Dearden made a couple of points that should resonate with print companies up and down the country.

The firm produces flexible packaging for clients such as retailers and multinational brand owners that are known for their absolutely ruthless purchasing practices.

Like many companies in our industry, Interflex has found itself on the wrong end of rapidly rising input prices, particularly utilities and raw materials. What’s different is that unlike so many others in our sector it has taken a tough – and to my mind entirely reasonable – approach to passing these input price rises on to the customer.

Walk away
What happens when the client simply turns around, rejects this out of hand and goes off and finds another, cheaper print supplier, I hear you ask?

If that happens, the company says it is perfectly prepared to walk away from the business. Playing this kind of hard-ball with clients in such a fashion requires, well, balls. But the alternative is to end up as one of those much-derided, and increasingly defunct, busy fools.

Anecdotal evidence that I have come across suggests that other print suppliers are also having the courage to take firm action when customers don’t play by the rules. One printer I heard about that had been given the runaround on payment got to the point where, when the promised cheque wasn’t in the post (again), it had absolutely no qualms about resorting to a winding-up petition.

Naturally the customer was outraged, even though it was completely in the wrong. I like to think that the company will have been persuaded to take a long look inwards at the way it operates following that episode and will have learnt an important lesson about the value of ethical business dealings. Everyone needs a favour at some time or another, and those who ride roughshod over others will find those favours are slow in coming, just when they’re needed most (if they come at all).

As those previously mentioned busy fools go to the wall, customers may well discover a newfound value and respect in well-run suppliers of substance. Interflex’s Dearden also had a fantastic phrase to sum up the mental attitude he brings to the business: “This year is the best you’ve ever had.” The past is irrelevant, the future is just that. We are operating in the present and however ugly it is, we just have to deal with it.



Two-minute takeaway on coping with the current market conditions

  • When the going gets tough, the tough get going. The ability to take difficult decisions, and stand by them, will be an important skill for print company operators during the downturn. Taking a stand should earn the respect of both staff and customers alike
  • Why should printing companies continue to absorb input costs to the detriment of their own profitability? Why should large-scale retailer clients benefit from print’s hardships? Find strategies to pass these costs on, or the strength to walk away from business if that proves to be impossible
  • How about this for an ethos: “This year is the best you’ve ever had”. Having a can-do attitude is a challenge in such uncertain times, but it’s amazing what a difference having a confident leader can make to a business