New Rules of Engagement —Morgan

FOR DECADES, the printing industry’s “Terms and Conditions for Sale” was a keystone in helping printing companies and their customers work together. Created by the major printer associations, the “Terms and Conditions for Sale” document sought to establish acceptable standards of doing business between printers and their customers.

This document was created to establish “rules” to minimize the number of conflicts between printers and their customers, and diminish a printer’s financial liability when a job went awry. These standards were set up by parties that represent printers so, understandably, those terms and conditions were fashioned to primarily protect printers.

Over the past several years, print buyers have been blatantly disregarding printers’ Terms and Conditions for Sale. Eager to find the source of the resistance, I polled more than 100 top buyers from my 11,000 member e-community, Print Buyers Online.com. We asked the following questions.

First: “Do you read the Terms and Conditions of Sale for each of your print suppliers?” Interestingly, 27 percent of respondents said that they never read these documents, and 46 percent rarely read them. (“I thought the Terms and Conditions of Sale contract was a standard agreement—not customized by each printer.”) In addition, 11 percent responded that they weren’t even aware that printers have such a contract.

One print production exec from a well-known financial institution said: “I haven’t read printers’ terms and conditions for some time. [We] created our own terms and conditions that go on every purchase order. Executing the purchase order is linked to the acceptance of all of our corporate terms. This protects my company from liability.”

Irrelevant, Outdated

Next, we asked: “How relevant are printers’ Terms and Conditions for Sale documents?” In response, 43 percent said, “It’s irrelevant and outdated. We establish our own terms with our print suppliers.” And 35 percent indicated, “It’s somewhat relevant. It’s a guide, but I don’t expect to be held to all those rules.” Only 20 percent of the respondents found printers’ Terms and Conditions for Sale very relevant and use this to know their responsibilities and rights.

An ad agency production manager elaborated: “I know these are intended to protect the printer and should be given a cursory glance. Ultimately, actions, not legal fine print, will dictate with whom I do business. If a printer wants to nitpick, he/she risks not getting future business. Is there potential for a big financial risk on a large job? Sure. But I would only be placing such jobs with businesses I’ve already determined will stand behind their work, not their lawyers.”

The core issue behind the departure from these standards is the lack of effectiveness of printers’ Terms and Conditions for Sale. These guidelines don’t take into account how different each print job can be. For instance, one term that printers commonly included in their contracts is that the printer may produce up to a “10 percent overrun or 10 percent underrun” on print jobs. Of course, this means the printer doesn’t have to be held accountable to go back on-press in the case of up to 10 percent under and can charge for up to 10 percent over. This rule might have made sense for a simple project with a quantity of 1,000, but not for a more complex project or one with a million pieces.

But, even for simple jobs, this standard is no longer acceptable to print buyers.

Why? Today’s buyers have a keen eye on the total cost of a project, attempting to reduce or eliminate inventory, and get the most from their mailing lists and return on investment (ROI). Even a small change in the quantity ordered greatly increases the cost of the communication. Right or wrong, a significant deviance from expectations is something that most buyers are unwilling to accept. Interestingly, for years now most printers have not even pressed the issue of 10 percent under/10 percent over, knowing that it’s better to keep the customer than be “right” on paper.

There are other reasons why the traditional trade customs are out of date and do not adequately serve buying companies. Business relationships between buyers and suppliers have changed significantly in the past several years.

Today’s printers have to be much more flexible in accommodating different client’s needs. For the most part, blanket “rules” are no longer acceptable to buying companies. Perhaps the disconnect occurs because today’s marketing communications increasingly call for dynamic and complex strategies, yet these projects are created in a manufacturing environment. From the buyers’ perspective, perhaps that’s the difference between a printer and a solution provider. One manufactures a printed product that could be ordered by any customer; the other creates distinct solutions for specific clients.

Both printers and buying companies have challenges in creating effective communications. Potentially, each project has different communication goals, ROI and quality expectations. As the communications programs become more complex, so does accurately communicating and delivering on those expectations. This complexity creates the need for more flexible and fluid relationships between buyers and suppliers.

So what do print buyers want from printers? They want a partner that is capable of understanding their unique challenges and goals. They want flexibility, instead of one set of rules.

Working Relationships

Top buyers in our surveys agree that their firm’s terms and conditions always override the vendor’s, if push came to shove, and that the corporate standards they provide to suppliers outline overs, invoicing, proofs, etc., on their own terms.Making the relationship work falls not only on the solution provider, but equally on the buying company and print buyer.

Print buyers must more accurately define their expectations not only for quality expectations, but expectations for workflow, ROI and project goals. Just as the outdated Terms and Conditions for Sale no longer work, nor does the standard buyer’s bid sheet that explains a job by a few simplistic print specifications.

Buyers must expand their Request for Quotation to reflect the true complexity of the communication’s piece. And that RFQ will need to be refined for every project. However, solution providers must probe deeper and ask more expansive questions instead of just quoting and accepting a job based on receipt of limited specs.

This requires much more work than many of us are used to. But the payoff for the buyers is a job (and equally important, process of working with a printer) that is effective (meets the communication goals) and is truly satisfactory the first time (acceptable process and product quality).

The payoff for the printer is developing a stronger relationship with the buying company, where the buyer receives service that’s so unique and beneficial that they aren’t interested in going somewhere else.

Therefore, moving away from the traditional Terms and Conditions for Sale puts the solution provider in the mindset of offering customized service. Ultimately, this customized service affords the printer the opportunity to become more profitable.PI

—SUZANNE MORGAN

About the Author

Suzanne Morgan is president of the annual Print Oasis Print Buyers Conference (www.printoasis.com) and Print Buyers Online.com, a free educational e-community for print buyers and their print suppliers (www.printbuyersonline.com). PBO has more than 11,000 members who buy $13 billion a year in printing. PBO conducts weekly research on buying trends and teaches organizations how to work more effectively with their print suppliers. Morgan can be reached at smorgan@printbuyersonline.com.