Are you up-to-date on the newest economic forecasts? The ones that say the US economy is on course for a soft landing?
The Wall Street Journal reports that this prospect of a soft landing is fueling investor optimism for a boom reminiscent of the 1990s. And if that prediction comes true, it promises to bring new opportunities for in-plant growth.
In fact, I see two possible growth opportunities and three improvement strategies that can result from this scenario. We’ll discuss all of them in this blog post.
First, though, what exactly is a soft landing?
What Is a Soft Landing?
The Brookings Institution defines a soft landing this way:
“The Federal Reserve often increases interest rates to moderate economic growth when inflation becomes a concern. A significant rate hike could lead to a recession, often termed a 'hard landing.' Conversely, suppose the Fed incrementally raises rates to sufficiently decelerate the economy and curb inflation without triggering a recession. That is referred to as a 'soft landing.'”
Importantly, a soft landing can result in financial benefits. It’s likely to lead to a decrease in interest rates and a reduction in inflation, while allowing for continued — albeit slower — profit growth. Companies could maintain hiring, potentially leading to increased expenditure for development.
In such a situation, it's advisable to strategize your investments. The graphic below outlines two main strategies to consider:
- Enhancing in-plant growth. This could include developing new applications or formulating a marketing strategy.
- Boosting productivity, for potential cost savings. This might mean implementing more automation, investing in equipment-specific employee training, or implementing a quality assurance program.
Deciding which approach to take starts by researching the opportunities out there and listening to what your customers have to say.
Listening to the Voice of the Customer
When exploring investment opportunities, it's crucial to understand customer needs, trends, and preferences thoroughly. Many publications — including In-plant Impressions and WhatTheyThink — as well as manufacturers and market research companies such as KeyPoint Intelligence InfoTrends can help you identify new investment trends.
Another effective strategy is conducting customer surveys and focus groups. We do this in all of our consulting work to provide valuable insights into consumer opinions and desires.
Through this process, you might discover unexpected knowledge about your customer base. For instance, they might be interested in new offerings such as stickers, promotional items, design services, or mailing solutions. Alternatively, feedback could reveal areas of concern, such as perceptions that your prices are too high, dissatisfaction with longer turnaround times, or apprehensions regarding the quality of your products.
By understanding these aspects, you can tailor your investment strategies to align with customer needs, while enhancing satisfaction and business success. That could mean either increasing growth or improving productivity and lowering costs.
Embarking on a path to spur growth involves exploring diverse, innovative applications. The most sought-after enhancements include broadening large-format printing capabilities, integrating contour cutting, expanding into promotional products, upgrading or initiating e-commerce and Web to Print solutions, and incorporating personalized or variable data printing features.
The key to selecting new applications lies in identifying those with the highest potential for success, which could be learned through focus groups and surveys but can be augmented by one-on-one conversations with customers.
Regarding marketing strategies, there are three primary approaches to consider:
- Developing a comprehensive sales plan that emphasizes face-to-face interactions.
- Enhancing your website's functionality and improving your e-commerce features, to boost your online presence.
- Using videos to showcase new capabilities, products, or services.
One of the great mysteries in the in-plant community is how commercial service providers overwhelmingly use salespeople, and the underwhelming lack of salespeople in in-plants. Looking at this as an outsider, the lack of salespeople would be considered a competitive disadvantage due to the inherent advantages of face-to-face sales, which include:
- Personal engagement: Establishing a rapport with clients through personal meetings to create trust and foster loyalty.
- Product demonstration: Showcasing products or services live, allowing for demonstrations of functionality and benefits.
- Customized presentations: Tailoring sales pitches to each client's specific interests and needs based on prior interactions and knowledge.
- Immediate interaction: Answering questions, addressing concerns, and overcoming objections on the spot.
- Relationship building: Developing a deeper understanding of the client’s business over time, leading to potential upselling and repeat business.
- Closing the deal: Finalizing sales through persuasive communication and negotiation, often resulting in instant decisions and immediate sales.
Unfortunately, not all parent companies allow “sales staff.” Some will call them “customer service staff,” though, overcoming that objection.
Whatever the case, if you opt for a face-to-face sales strategy, you must equip your sales team with a toolkit. This toolkit should begin with a compiled list of both potential and existing customers.
Another crucial component is a collection of samples showcasing successful products and various paper options. This approach is grounded in the understanding that one of the primary reasons customers choose commercial providers is sales representatives who can effectively demonstrate product capabilities and material choices.
Videos highlighting your new offerings can also be valuable assets in your toolkit. These videos can be made easily accessible through links on your website and promoted via social media, helping to draw attention to your new capabilities and products.
Increasing Productivity and Lowering Costs
The same focus groups and surveys that glean customer preferences can also reveal if they think your prices are too high, your service too slow, or your quality subpar.
If such feedback emerges, a strategic move would be to enhance productivity by implementing software automation, investing in staff training, or establishing a quality assurance program. Often, productivity issues stem from identifiable bottlenecks that prolong cycle times and inflate costs, or from specific problem areas that lead to quality issues and extensive inspection procedures.
Should customer feedback indicate that your pricing seems excessive, it may be time for a comprehensive competitive price analysis. Begin by selecting a representative sample of products — 12 to 18, perhaps — to gauge customer reactions. Sometimes, this sample can be enough to verify if your prices are higher than the market average. Expand the sample to include 20 to 30 products for a more conclusive assessment. Determining the root cause is essential, whether it’s inflated budgeted hourly rates, overstaffing, or inefficient production processes.
The root of the issue may lie in productivity bottlenecks, where work stagnates in one department, outdated equipment or insufficient staff training lead to poor quality, or slow turnaround times occur due to overly rigorous inspections.
Addressing inflated budgeted hourly rates involves recalculating these rates to reflect current realities. If the issues are tied to excess staff or protracted production processes, a reevaluation of workflow through software automation, further staff training, and a review of staff management processes may be warranted.
Time and Costs
Initiating a comprehensive analysis is a critical step that should precede any capital expenditure requests. Fortunately, conducting surveys and focus groups is a financially savvy move — they are typically free and can be completed swiftly, often within a week or two. Other preparatory steps, like identifying potential and current customers, assembling a sales toolkit, and producing promotional videos, demand a bit more time.
Some tasks, however, will require an even more extended period, such as the in-depth research of various products necessary to develop specialized applications. This kind of research can span several months.
When boosting productivity and curtailing costs, pinpointing the underlying issues — like bottlenecks that cause delays and inflate expenses or problems that compromise quality — should be relatively quick. Nonetheless, the process of actually enhancing productivity and trimming expenses is more time intensive.
Investments in software automation, staff education, and quality-control systems demand more time to implement and come with a higher price tag. The silver lining is that the benefits derived from increasing productivity and reducing costs tend to have a more enduring impact than many growth-enhancing strategies.
Preparing for the Opportunities Created by a Soft Landing
So where do you begin? Here’s a summary of some of the ways you can get started as you prepare for the opportunities created by a soft landing:
- Gather insights: Conduct surveys and focus groups, and research trends in publications to understand customer needs.
- Strategize for growth: Evaluate “hot” applications or create a sales plan with a sales toolkit.
- Consider increasing productivity and reducing costs: Analyze root causes using tools like competitive price analysis, ratio studies, and BHR analysis.
- Implement software automation to streamline processes.
- Provide staff training to improve skills and efficiency.
- Initiate conversations early with your administrative team and start planning:
- Talk to management about your goals, research, and metrics.
- Describe the priorities and allocate time and resources.
By putting all of the right pieces in place, you’ll find yourself in a better position when a soft landing hits.
Preparing for the Opportunities Created by a Soft Landing
With the US economy on course for a “soft landing,” in-plants can get ready for the potential benefits that could result. By gathering customer feedback and analyzing market trends, you can determine whether to look for new growth opportunities or find ways to boost productivity and save on costs instead.