Business Strategy

Finding & Keeping Good Salespeople, Part 2

September 16, 2022

By David M. Fellman

This is the second part in a two-part series. Part one, in the May/June 2022 issue of PostPress, focused on hiring salespeople. Part two focuses on retention.

Having (hopefully) found yourself a good salesperson, how do you keep that person with you? It’s pretty simple, really. First and foremost, you make sure your expectations and your salesperson’s expectations are in sync, and then you keep your side of the bargain. (And if your salesperson doesn’t keep his/her side of the bargain, we’re not talking about a good salesperson, right?)

Your expectations start with the job description – developing new customers vs. servicing established customers, quote machine vs. missionary, etc. – and continue with more tangible action standards and objectives. Your overall objective (and the salesperson’s quota) might be $500,000 in sales, and one of the action standards to support that might be 20 “prospecting starts” each week. (That’s my term, by the way, for a process which begins with the identification of “suspect” companies and ends with the qualification of real prospects.)

Your salesperson’s expectations probably start with an income goal but may also include support and “working conditions” expectations. Let’s deal with those first. Part of your side of the bargain is to ensure that the promises your salesperson has to make are being kept; promises of quality, service, reliability, etc. Now, the salesperson shouldn’t be making unreasonable promises – again, one who does that would not be a good salesperson, right? – but you have to understand that those promises are a critical part of the selling process. If the promises aren’t kept, the customer may not buy from you again, and that affects the salesperson’s income. Put yourself in a salesperson’s shoes. If you do your job – developing customers, winning orders, etc. – but your “promise keepers” don’t do their job, you’re probably going to look for a better group of promise keepers before too long.

Income expectations

Now let’s talk about income goals and expectations. I’ve seen many situations that were doomed from the start because the printer either created or allowed an unreasonable earnings expectation. Here’s an example: A candidate earned $65,000 the previous year selling office products. The printer told him he could earn a lot more than that selling printing. “I’ll pay you 10% of everything you sell,” the printer said, “and for the first 3 months, I’ll let you draw $5,000 per month so you won’t be taking a huge pay cut while you’re getting things rolling.”

In the first month, the salesperson worked hard, but sold basically nothing. In the second month, he continued to work hard and landed a few small jobs and one good-sized (by this company’s standards) job. The small jobs were in the $300-$500 range. The good-sized job billed at $3,500, and his total sales for the month were a little less than $5,000. In the third month, he landed several new customers, six small jobs and three good-sized jobs, for total sales of approximately $11,000.

I asked the owner how the new guy was doing. “Great,” he said. “I couldn’t be happier!” I asked the salesperson how he was doing. “I’m dying here,” he said. “Everyone tells me I’m doing great, but I’m not even close to covering my draw. I must do $650,000 in sales to equal what I earned last year, and I can’t see any way that’s going to happen.”

Here’s the problem. The printer hired a $65,000 guy for a $30,000-$45,000 job. The first question you should always ask yourself before hiring a salesperson is how much sales volume you can reasonably expect. I ask my clients to produce three figures: a solid performance, an exceptional performance and a minimum level of performance. The second question you should ask yourself is how much you’re willing to pay for each level of performance.

When I did this “after the fact” with this particular printer, we came up with $300,000 as a solid performance and $450,000 as a really outstanding performance, all of that based on his equipment and capacity and market dynamics. His answer to the second question was the same 10% of sales he’d offered to the salesperson, with the expectation that benefits and expenses and taxes would increase that to a total “compensation load” of about 15%. “With anything more than a 15% load,” he said, “the work he brings in won’t be profitable.”

Here’s a hard fact. The arithmetic of the situation tells you exactly how much salesperson you can afford, and it may very well disqualify the kind of candidate you would really like to hire. The trap that many printers have fallen into is to think that a more talented and experienced – and therefore more expensive – salesperson will automatically bring in enough business to make everybody happy. It doesn’t work that way. If the printer paid $65,000 for $450,000 in sales – which we agreed, remember, would represent an outstanding performance – the salesperson might be happy in the short term, but please also remember that the printer promised him he could earn “lots more” selling printing. And the printer wouldn’t be happy at all with a wages-plus-benefits-plus-expenses-plus-taxes compensation load up around 20%. The most likely scenario is the loss of a talented salesperson because the job was not all it was cranked up to be.

The moral of this part of the story is don’t oversell the job. Remember, this all starts with reasonable performance expectations. If it would take a beyond-reasonable sales performance to get to the salesperson’s desired or required income level, the relationship is almost certain to fail.

Affordable salespeople

All of this begs a question: What do you do if you can’t afford to hire – or if the job won’t support – a proven professional? My best advice is to hire someone who’s going to be a proven professional someday. Let’s take another look at that quote from Caliper’s promotional material: “The Caliper Profile is a personality assessment instrument that objectively quantifies an individual’s competencies and identifies candidates with the strongest potential.” In other words, you have tools available to help you identify young/inexperienced people who are likely to grow into the job. You’ll have to train them, and manage them effectively, but the “opportunity equation” is pretty clear-cut: good candidate + solid training + solid management = great salesperson.

Here’s something else to consider: Attaining an income level is no guarantee of performance. There are plenty of “hacks” earning $65,000 or more in sales, some of whom inherited great territories or compensation plans that benefit the salesperson far more than the company. I believe, though, that the top 25% of people who will start with you at $35,000-$40,000 will outperform the bottom 50% of people currently earning $65,000 or more, and the top 10% of those $35,000-$40,000 people will outperform the bottom 80% of those earning $65,000 or more. Like any other investment, the best strategy with salespeople is to buy early in the value cycle; in other words, to invest in relatively inexpensive things which will appreciate in value.

Appreciation

Appreciation, by the way, is another part of the formula for keeping good salespeople, and you show your appreciation in both tangible and intangible ways. The intangibles may be the most important consideration here, and the moral of this part of the story is to treat your valued salespeople with at least the same respect you show a valued customer. (That’s good strategy, of course, with any valued employee.)

The tangibles provide you with opportunity too. Here’s an example. One of my clients had determined that she was willing to pay a new salesperson $45,000 to bring in $350,000 in sales in her first year, and we both agreed that $350,000 was a reasonable expectation. We told the candidate that this position had “low 40’s” potential in the first year, and that met her income requirements and expectations. The salesperson’s compensation plan started with a salary of $2000 per month, and my client’s original plan was to pay 6% commissions on top of that, which would add up to exactly $45,000 on $350,000 in sales. My recommendation was to reduce the commission rate to 5% and add two incentives to the plan. The first was a $2,500 bonus to be paid if the salesperson reached her quota of $350,000. The remaining $1,000 was budgeted for “random acts of appreciation.”

About five months into the first year, the owner and salesperson went on a sales call together, and on their way back to the office, the salesperson remarked on a watch that the client was wearing. “I really want one of those,” she said. “I can’t really afford one yet, but it’s definitely on my list.” That led the owner to call the client to inquire about the watch, and that afternoon, she ordered one (about $400) from Amazon. As she gave it to the salesperson, she said, “This is just because I appreciate the way you do your job and represent the whole company. Keep up the good work!”

I’m sure you see the motivational and loyalty-building value of that act of appreciation. Please also note that there was still $600 in the budget for additional “random” acts.

Danger!

Let’s go back to the subject of income expectations for a moment. For most salespeople, part of the expectation is the opportunity to increase sales and earnings from year to year. That holds true right up to the point where many salespeople settle into a comfort zone.

What do you do in that situation? Here’s what you don’t do. You don’t arbitrarily decide that since the salesperson isn’t working as hard, you won’t pay him/her as much.

This goes all the way back to the question of reasonable sales expectations and what you’re willing to pay for that level of performance. After asking my clients to define first year objectives and compensation tolerances, I always ask them to think ahead. This process, combined with the interview process, ultimately yields seven data points: (1 & 2) first year sales expectations and what the printer is willing to pay for a reasonable performance, (3 & 4) future sales expectations and what the printer is willing to pay for a reasonable performance, (5) what the salesperson needs to earn in the first year, (6) what the salesperson wants to earn in the first year and (7) what the salesperson wants to earn by some future year. With those seven data points, it is usually possible to craft a compensation plan that will work for both parties in both the short term and the long term, and that’s important because changing a compensation plan is by far the most dangerous element of sales management.

Please note that there’s usually a difference between what a salesperson wants to make and needs to make, especially in the first year. The need figure may have to cover hard, fixed expenses or it may reflect the value the salesperson places on his/her own talent and experience. Either way, you have to guarantee that need figure, or else the salesperson won’t come with you or stay with you.

You don’t have to guarantee the want figure, but you do have to provide a reasonable opportunity to reach it. If not, the salesperson is probably not going to stay with you. Again, don’t oversell the job!

Closing thought

Here’s a closing thought for today. It is certainly worth the time and effort it takes to find good salespeople, but ultimately, you don’t need to keep salespeople – you need to keep customers!

In addition to the expectations and appreciation issues, it’s important that you never let a customer be your salesperson’s customer, as opposed to being your company’s customer. You prevent that by broadening the interface between your company and your customers, involving designers and customer service personnel and maybe even production people in the relationship. You also make sure that you have a personal relationship with the most important customers.

Most printing companies seem to abdicate “ownership” of the customer, which makes it easy for a salesperson to take a customer along if he/she leaves to go to work for a competitor. I want you to be able to go out and say: “I’m sure ‘Fred’ has talked to you about continuing to buy from him at his new company. We just want you to know that ‘Fred’ was only one of the people at our company who’s been responsible for your level of satisfaction, and the rest of us want to keep your business!”

Dave Fellman is the president of David Fellman & Associates, based in Raleigh, NC, a sales and marketing consulting firm serving numerous segments of the graphic arts industry. Contact him by phone at 919.606.9714, or by e-mail at dmf@davefellman.com.

Finding & Keeping Good Salespeople

June 9, 2022

By David M. Fellman

This is the first in a two-part series. Part one focuses on hiring salespeople. Part two focuses on retention and will appear in the next issue of PostPress.

“As I look at the industry,” a printer told me, “I see great things being done on the printing end. We have fantastic capabilities. We’re just not very good on the selling end or at sales management. I think most of us struggle with finding and keeping good salespeople.”

It’s an age-old problem: Where do you find good salespeople, and how do you keep them? The answer to both of those questions starts with this one: What exactly do you want your salesperson to do?

The answer probably seems obvious: I want my salesperson to sell! But doing this right requires more thoughtful consideration. Do you want your salesperson to develop new customers or to service established customers? If the answer is both, what’s the mix between those two activities? Do you want your salesperson out looking for things to quote or selling innovative applications of your production capabilities? There are plenty of candidates for most good sales positions, but are they really good candidates for your sales position?

Hunters

The prime directive for most businesses is to grow the business, and for a printing firm, there are only two ways to do that: gain new customers and/or sell more to your current customers. It’s generally acknowledged to be easier to do the latter, which I think provides evidence that you need someone with special skills and attitudes to do the former. I don’t have any factual data to prove this, but my consulting experience suggests that maybe 10% of all current printing salespeople have well-developed hunter skills and attitudes.

Hunter skills include questioning, listening and negotiating. Hunter attitudes start with a very competitive nature, and a desire to avoid getting bogged down in details. Now, that should scare you, because the definition of a good salesperson for most printers would include being detail-oriented and working well with the production side of the business. You have to understand, though, that you don’t pay a hunter to get orders or to process them, you pay him/her to create a decision – the decision to give your company a chance. A pure hunter will do that and your company will (hopefully) benefit from the lifetime value of that customer. The (hopefully) part reflects the distinct possibility that it won’t be a long and full lifetime if you expect a real hunter to farm that account too.

Farmers

The hunter/farmer analogy is not as clean as I would like it to be because it’s based on the idea that hunters kill and farmers grow. A better analogy might be obstetricians and pediatricians; one is responsible for the birth of a relationship and the other is responsible for maintaining its health. The hunter/farmer terminology is pretty well accepted, though, so let’s continue to use it.

Farmer skills include questioning, listening and negotiating, too, but there’s a significant difference in the application of those skills. For the hunter, questioning and listening are essential to finding weaknesses in the status quo, and negotiations are mostly about positioning a higher price as the solution to a problem, or possibly a better way of doing something. For the farmer, questioning and listening are more about getting the specs on every project right, and the justification for a higher price can be tied to proven performance.

Farmer attitudes start with a commitment to customer satisfaction, and that should scare you a little bit too. As I tell salespeople in seminars, a large part of their job is to be the advocate of the customer to the company; in other words, the salesperson communicates the customer’s needs and wants to the company, and fights for the customer’s best interests. At other times, though, the job description shifts, and the salesperson has to be the advocate of the company to the customer; in other words, sometimes the bearer of bad news.

I have never been one who believes in the idea that salespeople should be called something else, because of a stigma attached to the sales profession in our society. I do believe, though, that account manager is a very good title for a salesperson whose primary responsibility is customer maintenance rather than new customer development. I think the combination of representing the customer and representing the company is well-defined by the phrase managing the account.

Where do organizational skills fit into all of this? From my perspective, strong organizational skills are a significant asset for a hunter but an absolute necessity for a farmer. To put that another way, I will tolerate some organizational deficiencies in a salesperson with a proven ability to develop new customers. I’ve found that you can’t tolerate the same lack of organization in an account manager, though, because the largely reactive nature of the position requires strong organization and prioritization skills.

Missionaries

My dictionary provides several definitions of the word missionary, one of which is: somebody who tries to persuade others to accept or join something. In our industry right now, there’s a pretty significant need/opportunity for missionaries who can sell innovative applications of our capabilities and technologies. From printing on textiles to what I like to call extreme personalization, 21st century printing capabilities have opened up vast new possibilities for business communications.

The problem, though, is that these applications don’t sell themselves, so we need salespeople who can sell them. Missionary skills certainly include questioning, listening and negotiating, but they also include an intellectual component that not all hunters have. To put it bluntly, you have to be smart enough to understand both the technical aspects and the communications potential. And then you must have both the patience and the creativity to develop and sell a program, not just a relationship or a product.

Missionary attitudes include that patience, and also a commitment to the concept of return on investment. A true printing missionary is almost always selling something that costs more than the status quo. That means his/her negotiation position will almost always be: “Yes it costs more, but it’ll work better and therefore be a better investment.”

Your Sales Position

The point of all of this, of course, is that the person needs to be matched to the position. If you have a need for a hunter or a missionary, you won’t be happy with the performance of a person with farmer skills and attitudes. So how do you know what skills and attitudes a candidate possesses?

First, all of your recruiting material should stress exactly what you’re looking for. Second, most of your interview and reference check questions should be about confirming these traits. Third, don’t ever hire a salesperson without first testing for the skills and attitudes the position requires.

Recruiting

It’s important to understand the difference between advertising and recruiting. One is mostly passive, the other is highly proactive. Most printers seem satisfied to list the job on one of the online services. That strategy usually fails, though, and the reason is simply that the person you really want to hire is not looking for a job right now.

Think about this for a moment. There are only two reasons why someone would be looking for a job. One is that there’s something wrong with the job they have, and the only other is that there’s something wrong with the person. Now, there certainly are good people in bad situations out there, including very good people who have become available through layoffs and business failures that were in no way their fault. But I still think it’s fair to say that the majority of job-seekers – especially sales job seekers – are job-hoppers or poor performers or very possibly both. I think the salesperson you really want to hire is working right now, and performing at a high level right now, and loyal to his/her employer … but smart enough to listen if something potentially better comes along!

How do you reach people like that? One possibility is to hire a search firm, but there’s a significant cost attached to that and no guarantee of success. A better strategy, I think, is simply to network through your family, friends, suppliers, customers, etc. Describe the opportunity in general terms and the skills and attitudes you’re looking for in specific terms and ask if they know anyone who might fit the bill. Hopefully, between advertising and networking, you’ll come up with a few viable candidates.

Interviewing

A job interview has both buying and selling elements to it. It’s fair to say, though, that most printers put the cart before the horse, trying to sell the job to the candidate before they’ve decided that they want to buy that candidate’s services. I urge you to focus on the buying side before you spend any significant time trying to sell the job.

My interviewing strategy is pretty straightforward, and it doesn’t include questions like, “what did you like about your last job?” Or “what did you not like?” I start with a statement, “Here are the skills and attitudes I’m looking for … ” and continue with a challenge: “Convince me that you possess these skills and attitudes!”

I would probably not be as direct if I were interviewing, say, a candidate for a design or prepress position. A salesperson, though – certainly a hunter or a missionary – should be able to handle this sort of situation. The way I look at it, the interview process is the first element of testing a candidate. By the way, I would never hire a salesperson on the strength of a single interview. I make it a point to have at least two face-to-face meetings, and I have talked with some candidates three to four more times on the phone. I’m also a very strong believer in having others in my organization talk to each candidate. The better you get to know a candidate before you make a hiring decision, the more likely it is to be a good hiring decision.

Testing

As noted, the interview process is the first element of testing, and I hope you see how my interviewing strategy puts a candidate in a selling situation. My requirement for testing goes well beyond that, though. Just as I would never hire a salesperson on the strength of a single interview, I would also never hire one without input from an in-depth psychological profiling tool. One such tool – and one I’ve been using for many years – is the Caliper Profile (www.caliperonline.com). Here’s a quote from Caliper’s own promotional material: “The Caliper Profile is a personality assessment instrument that objectively quantifies an individual’s competencies, and identifies candidates with the strongest potential.” I have found this to be an invaluable sales management tool.

Caliper tests for personality characteristics such as ego drive, assertiveness, empathy, self-structure, abstract reasoning and idea orientation. In other words, Caliper can tell you if a candidate is a hunter, a farmer, a missionary or some combination of all three. I can also tell you that, in my experience, Caliper has been uncannily accurate.

Here’s my proof of that statement. I have had clients over the years who didn’t want to take the time or spend the money to test candidates before hiring. I have always insisted, though, and in numerous cases where we ultimately hired a candidate we’d tested, I revisited the Caliper report with my client six months later. “OK, you’ve watched this person in action for six months,” I have said. “Now tell me if the Caliper Profile accurately describes the person you’ve gotten to know.” The response has always been the same: “This is amazing!”

No matter how carefully and thoroughly you interview, you’ll never know a candidate pre-hire as well as you will after he/she has been working for you for six months. Caliper – or any other in-depth assessment tool – can give you a look into the future. I hope you’ll agree that you have to be crazy to hire a salesperson without taking that look.

Part two of Finding and Keeping Good Salespeople will focus on retention and will appear in the next issue of PostPress.

Dave Fellman is the president of David Fellman & Associates, based in Raleigh, North Carolina, a sales and marketing consulting firm serving numerous segments of the graphic arts industry. Contact him by phone at 919.606.9714 or by email at dmf@davefellman.com.

Company Folders, Inc. Works to Help Ukrainian Employees

June 8, 2022

Submitted by Company Folders, Inc.

In the weeks since Russian forces invaded Ukraine, the owner of a US printing company has devoted much of his time and resources to keeping his employees safe and helping get aid to Ukraine. Vladimir Gendelman, founder and CEO of Company Folders, Inc., was born in Kharkiv, Ukraine, and immigrated to the US, where he started a printing company that specializes in presentation folders. His staff includes seven Ukrainian graphic designers, software programmers and quality assurance engineers, and he continually is working to support them and ensure they have what they need to wait out the war.

As soon as the invasion began, Gendelman reached out to a former US Army colonel to provide guidance on military tactics and potential strategic targets. They searched employee addresses to see who was close to potential areas of conflict and determine where they might go that would be safer. One employee was able to cross the border to Poland, but four were trapped by the shelling in Kharkiv. Gendelman helped guide them to western Ukraine, away from the fighting and provided salary advances so they would be able to leave their homes and get to safety. Two more employees have since managed to leave the country. Another employee was evacuated from a dangerous area near a strategic railroad bridge. And one was in Mykolaiv caring for his elderly parents and chose to stay there.

In 2014, the Company Folders team was based in Donetsk during the Russian separatist uprising there. Gendelman knew from experience that anything could change quickly in a conflict zone. To make sure he could continue to communicate with his employees, and they could stay in touch with each other, they created channels on Slack, Skype, Telegram, WhatsApp, and Facebook Messenger. He assured them all that, regardless of whether they were able to work, they would continue to receive their salaries and their jobs were secure. He also established a Crypto business account as a backup payment mechanism in case the banking system collapsed.

For the first few weeks, the company was in emergency mode. The US staff picked up the pace and ensured client work was completed on time, but they postponed all internal and non-essential projects.

Now that each team member has found a place they can stay for the time being, work is returning to a new normal and Gendelman is turning more of his attention to Real Help for Ukraine the non-profit he helped form to send humanitarian aid to the over 14 million Ukrainian refugees who have fled their homes to escape the conflict. Working with an international network of entrepreneurs, Gendelman is collecting medical supplies, and raising funds to support efforts to provide shelter, food, and other necessities to those displaced by the war.

Learn more about Real Help for Ukraine by visiting realhelpforukraine.org.

Electronic Communication – Is Paper a Better Choice?

March 22, 2022

By Two Sides North America

As global demand for resources continues to grow, a sustainable future will depend heavily on the use of products that are highly recyclable and based on renewable materials and energy, as opposed to non-renewable materials produced with fossil fuel energy. Paper is well positioned given its unique sustainable features. “Go paperless, go green” is a common claim that encourages us to switch to electronic transactions and communications. But are appeals to help the environment by eliminating paper based on sound science or on marketing strategies?

The responsible production, use and recycling of print and paper contribute to long-term, sustainable forest management in North America and help mitigate climate change. Print and paper will remain an important element in our media mix, and also will continue to provide social and economic benefits that contribute significantly to the well-being of North American businesses and citizens alike.

Environmental marketing rules often are broken

A study by Two Sides found that half the leading Fortune 500 telecommunications companies, banks and utilities were making unsubstantiated claims about the environmental benefits of electronic billing. In response, Two Sides initiated a campaign to educate senior executives on the sustainability of print and paper and to encourage them to abandon misleading environmental claims. As of June 2021, 146 North American companies and over 700 globally had removed or changed inaccurate anti-paper claims.¹

Marketing claims like “go green, go paperless” do not meet guidelines for environmental marketing established by the US Federal Trade Commission and the Competition Bureau of Canada. Marketers must ensure that all reasonable interpretations of their claims are truthful, not misleading and supported by reliable scientific evidence.^2,3

A recent consumer survey commissioned by Two Sides in the United States showed that 57% of respondents agreed that claims about switching from paper to digital being better for the environment were made because the sender wants to save money.⁴

Digital information has an environmental impact

The material footprint of digital technology is largely underestimated by its users, given the miniaturization of equipment and the “invisibility” of the infrastructures used. This phenomenon is reinforced by the widespread availability of services on the “cloud,” which makes the physical reality of use all the more imperceptible and leads to underestimating the direct environmental impacts of digital technology.⁵

In 2015, the global energy footprint of the Information Communications Technology (ICT) sector was 805 terawatt hours (TWh) or 3.6% of global energy consumption.⁶

The share of digital technology in global greenhouse gas emissions could reach 8% by 2025, i.e. the current share of car emissions.⁷ Data centers on their own could produce 1.9 Gt (or 3.2%) of the global total carbon emissions.⁸

The energy consumption required for digital technologies is increasing by 9% each year.5 Depending on the level of energy efficiency achieved, ICT could use as much as 51% of global electricity in 2030 and contribute up to 23% of globally released greenhouse gas emissions.⁹

By 2023, North America will have 345 million internet users (up from 328 million in 2018), and 5 billion networked devices/connections (up from 3 billion in 2018).¹⁰

In 2014, data centers in the US consumed an estimated 70 billion kWh, representing about 1.8% of total US electricity consumption. Based on current trend estimates, US data centers are projected to consume approximately 73 billion kWh in 2020. This energy consumption does not include the energy required to build, power or recharge the devices.¹¹

An analysis of 113 ICT companies in the US showed that 14% of the energy consumed was from renewable electricity in 2014.¹² This compares to 65% of energy demand met at US pulp and paper mills by carbon-neutral biomass and renewable fuels in 2018.¹³

E-waste is a growing problem

The vast majority of Americans – 96% – now own a cellphone of some kind. The share of Americans that own smartphones is now 81%, up from just 35% in 2011.¹⁴

Nearly three-quarters of US adults now own desktop or laptop computers, roughly half now own tablets and roughly half own e-readers.¹⁴

Since technologies change quickly, many users change devices regularly; often before they actually break. Average replacement cycles are becoming shorter. The average smartphone lifecycle in the US, China and major EU economies does not usually exceed 18 to 24 months.¹⁵

In 2019, the world generated 53.6 million metric tons (Mt) of electronic waste, and only 17.4% of this was officially documented as properly collected and recycled. The amount recycled grew 1.8 Mt since 2014, but total e-waste generation increased by 9.2 Mt. This indicates that the recycling activities are not keeping pace with the global growth of e-waste.¹⁶

The US and Canada annually generate 7.7 million metric tons (Mt) of electronic waste or 20.9 kilograms (kg) per capita. Of that 7.7 Mt, the US generates 7 Mt and Canada generates 0.7 Mt. Only 15% of e-waste in North America is recycled.¹⁶ This compares to 66% of paper and paperboard recycled in the US¹⁷ and 70% recycled in Canada.¹⁸

Increasing levels of e-waste, improper and unsafe treatment, and disposal through incineration or in landfills pose significant challenges to the environment, human health and to the achievement of the U.N. Sustainable Development Goals.¹⁶

E-waste contains precious metals including gold, silver, copper, platinum and palladium; valuable bulky materials such as iron and aluminum along with plastics that can be recycled. It also contains rare earth and scarce metals as well as hazardous materials such as mercury, lead, cadmium, fluorocarbons or various flame retardants.¹⁶

The increasing need for raw materials (especially for rare earth and minor elements) and unregulated e-waste recycling operations in developing and underdeveloped counties contribute to the growing concerns for e-waste management.¹⁹

Sources

Two Sides, 2021
Federal Trade Commission, Green Guides, 2012
Competition Bureau, Environmental Claims: A Guide for Industry and Advertisers, 2008
Toluna and Two Sides North America, 2021
The Shift Project, Lean ICT. Towards Digital Sobriety, 2019
Malmodin and Lunden, 2018
The Shift Project, The Unsustainable Use of Online Video, 2019
Andrae, A., Total Consumer Power Consumption Forecast, 2017
Andrae and Edler, 2015
Cisco, Cisco Internet Annual Report, 2020
U.S. Department of Energy, United States Data Center Energy Usage Report, 2016
National Renewable Energy Laboratory, Renewable Electricity Use by the U.S. Information and Communication Technology (ICT) Industry, 2015
AF&PA, 2020 Sustainability Report
Pew Research Center, 2019
Global E-Waste Monitor, 2017
Global E-Waste Monitor, 2020
Paperrecycles.org, 2020
Forest Products Association of Canada, 2020
Tansel, B., From electronic consumer products to e-wastes: Global outlook, waste quantities, recycling challenges, 2017

Two Sides North America is a non-profit organization whose members span the entire print, paper, paper-based packaging and mail value chain. Funded entirely by membership dues, Two Sides is the only industry organization that directly challenges unsubstantiated environmental claims about paper made by corporations, the media, government agencies and others. Learn how to join at www.twosidesna.org/become-a-member.

What’s Up with Inflation These Days?

December 9, 2021

By Chris Kuehl, managing director, Armada Corporate Intelligence

By now, every commodity category one can think of has been experiencing dramatic price hikes. Oil is trending above $80, natural gas prices surged by over 500%, steel was up by 216% and during the summer the price of lumber hit record levels. To some degree, this surge was anticipated but the extent of the price hike has been taking many user sectors by surprise.

The burning questions are how high do these prices go and how long does all this price inflation last? As any good economist would assert – it depends. There are three broad factors to consider when trying to forecast what happens next. The first is why these prices spiked so high to begin with. The second is how the consumers are responding to the higher costs, and the third is what would cause production and consumption to even out and allow prices to fall.

The root cause of the issue is not hard to determine. The pandemic-inspired shutdown of the entire world economy shattered demand for the better part of a quarter (Q2 and part of Q3 in 2020). This destruction of the global economy was made far worse by the fact that there was no way to prepare for it. This was a recession by edict and came as most companies were preparing for a pretty good growth year. The world had not dealt with a challenge like COVID-19 before and there were plenty of miscalculations. Few thought the lockdowns would last longer than a few weeks, but they dragged on for months. This left producers with billions of dollars of unwanted inventory.

Not only were they shutting down operations due to the pandemic restrictions, but they also saw little demand for the product they had and saw no reason to produce more. This would have been bad enough but scarcely a year later there was another unexpected development. Consumers came out of the gate in early 2021 as if they were on fire. Growth in the second quarter started at a blistering 9.5% pace and ended up at 6.5% (over twice what is normally seen in terms of US GDP growth). The demand for nearly every commodity grew at the same pace. Producers have been struggling to catch up all year, but each process has been more complex than usual.

Demand has not been as consistent as would be preferred. Office building construction has been hampered by the fact that only about a third of employees have returned to their old patterns and that has meant less interest in this kind of construction. Given that construction is the single largest consumer of steel, there has been trepidation among those producers. Machinery, however, has seen substantial growth. Shortages that have plagued the automotive sector have had an impact on demand as well. The fact is that demand has grown but the potential for decline in that demand has been inhibiting producers. They do not trust the demand they have been seeing as the potential still exists for a consumer pullback if there are further outbreaks of the virus.

The second factor is how consumers are reacting. In normal years, the spike in the prices would have halted consumption in its tracks. Companies would be unwilling or unable to pay these costs or would be concerned about the ability of their consumers to absorb these hikes. National polls indicate that 40% of companies will raise their own prices to cope with the increased costs they face, guaranteeing inflation will continue building.

Inflation usually comes under control when these prices get so high that people can’t, or won’t, pay them. This time, however, there is another wrinkle. The 2020 recession provoked the usual response – throw money at consumers so that they spend the economy out of the doldrums. That didn’t really work this time as consumers were limited in terms of what they could spend. The stimulus essentially accumulated rather than making its way through the system. At the start of the summer, it was estimated there was over $7 trillion in excess savings in the world – meaning that people and businesses complained vigorously about the higher prices but had the ability to pay them anyway. Until this bubble in the supply of cash dwindles significantly there will be more tolerance for higher prices.

Four primary business sectors have all reacted somewhat differently. The construction sector has either stalled completely (office buildings) or roared ahead despite the high prices (warehousing, distribution centers and the like). The primary issue has been availability of commodities like steel – there have been waits as long as a year for the materials needed to complete these projects. The second most important market has been the vehicle manufacturers – everything from cars and trucks to farm equipment and heavy equipment. We all know the drill here – shortages of everything from chips to assemblies have forced plants to close for periods of time and reduced the demand for the other products that go into these sectors. The third area has been booming — machinery.

There has been a surge in capital spending in many sectors of manufacturing as companies make up for lost time and react to the new demand. Finally, there is the oil and gas business, and that growth pattern may start to reverse soon. The demand had been down as concerns regarding the new rules and regulations affecting fossil fuel have been proposed. Will the pursuit of green affect pipeline development? Several large projects have been abandoned already and others have been threatened. On the other hand, the surging price of oil and gas has spurred a renewed interest in developing these resources.

The bottom line is that there is demand from a variety of sectors but at the same time there are concerns regarding how long this demand will hold. Production could ramp up to address the current environment and leave the producers back in the same boat they were in the spring of 2020.

Consumers are now starting to see a real impact on their own budget as these prices work their way into the retail environment. Food and fuel prices reacted right away and there has been shock at the pump prices as well as the costs in the grocery store. The holiday spending season is expected to be solid as consumers come out of hibernation, but that growth will be tempered by the rise in prices. The shattered supply chain, combined with the higher commodity prices, will drive the real rate of inflation past 5.5%.

That brings us to the most important question of all: When does all this end? What will cause prices to fall and how far do they go when they start to? If one looks at the behavior of prices for the last decade, it becomes obvious that volatility has been the norm. There have been many episodes of higher prices followed by big plunges. The demand spikes and producers react with an attempt to meet that demand and invariably end up overproducing and prices react accordingly. So, what will make that demand start to flag? It already has as far as construction is concerned. Even though there has been a major improvement in the development of transportation-related construction, the expectation for office building is not encouraging. Only about 33% of people have returned to their offices and estimates hold that roughly half of employees will remain in a virtual environment for the next several years (at least).

It will take a combination of factors to ease the inflation threat. Demand will have to even out so that producers have an opportunity to catch up. The very existence of inflation will help do that as prices will become too high for many to pay, but with all the excess cash sloshing around in the system that point may not be reached as quickly as usual.

Producers will have to gear up to meet demand, but they face a lot of uncertainty. If demand doesn’t hold, they get stuck with inventory again. They are further inhibited by the supply chain breakdowns. Everyone sincerely hopes that 2022 will be the year that something approaching normal arrives but many thought that 2021 would be that year. The best guess at this stage is that price pressures begin to ease by the end of second quarter of 2022. That still means more than six months of higher prices and scarcity.

Chris Kuehl is managing director of Armada Corporate Intelligence. Founded by Keith Prather and Chris Kuehl in January 2000, Armada began as a competitive intelligence firm, grounding in the discipline of gathering, analyzing and disseminating intelligence. Today, Armada executives function as trusted strategic advisers to business executives, merging fundamental roots in corporate intelligence gathering, economic forecasting and strategy development. Armada focuses on the market forces bearing down on organizations. For more information, visit www.armada-intel.com.

Working Through the Bindery – From the Pandemic and Supply Chain to Paper Stocks and Adhesives

December 9, 2021

By Liz Stevens, writer, PostPress

PostPress recently spoke with four experts to catch up on recent events and developments in the binding and adhesive areas of the industry. We asked Chris Eckhart, Eckhart & Co. Inc.; Mitch Holsborg, C&C Bindery & Packaging; Matt Cassidy, BC Adhesives; and Paul Steinke, Standard Finishing, to share how their businesses have changed throughout the pandemic; to offer advice on what to ask when looking for a perfect binder; to give suggestions for choosing the right adhesives and for dealing with various paper stocks; for thoughts on training or finding operators; and for key takeaways from dealing with supply chain shortage challenges.

Pandemic pivots

It seems that a lot of trade binders have had to really look at their businesses and figure out the best niches in which to survive and prosper in today’s marketplace. How have business models changed due to COVID-19, and how have business operations adjusted to working during a pandemic?

Chris Eckhart, whose Indianapolis, Indiana, company Eckhart & Co., Inc. specializes in mechanical bookbinding, all forms of softcover (adhesive) bookbinding and tangential binding and finishing services, felt that emerging opportunities rather than corporate plans have led to many recent business changes. “I’m not so sure that these changes and new niches are driven by strategic decisions made by management teams,” he said. Eckhart pointed out that there now is more automation and technology in bookbinding and finishing equipment to maximize efficiency and reduce labor requirements. But the equipment is expensive and capital resources are finite, so businesses are selective about the equipment and technology they invest in, and that investment then drives a company’s focus and niche. “Bottom line,” he said, “these niches have been driven by the equipment, automation and technology that are available. The reality of it is either you have this automation and technology, and you can compete, or you don’t have it and you can’t compete.”

Mitch Holsborg, president of C&C Bindery and Packaging of Farmingdale, New York, echoed Eckhart’s assessment. “Technology has been one of the most important parts of pivoting,” said Holsborg. C&C has diecutting, mounting, coating services and foil stamping in addition to bookbinding, and the company leaned on those parts of its business model while the demand for commercial work was weak. “Then we pivoted once again and used a lot of our capabilities to make bookbinding more profitable through value-adds,” he said. C&C began specializing in perfect binding and Wire-O during the pandemic instead of saddlestitching, folding and cutting. “We tried to use a value-add to attract more work,” Holsborg continued. With our ability to foil stamp on covers and to do film lamination, spot UV on covers and inside pages, we began doing something that nobody else was doing at the time.”

From his perspective at BC Adhesives, an adhesive distributor in Franklin, Wisconsin, Matt Cassidy, territory manager, saw the same kind of change in his customers’ businesses and believes smaller runs of digital print work make sense to keep in-house: “I think they are realizing that this technology is out there and that they need to jump in and be competitive with it.” He also has seen expansion in the adhesive-specific work done by customers. “My binders that used to only do EVA,” he said, “are starting to invest in some PUR capability. Some customers are starting to specialize but they are also expanding into more types of work.”

Paul Steinke, director of sales, Standard Finishing, Andover, Massachusetts, a North American distributor of print finishing and paper handling solutions, agreed that automation has been a key component in how customers have adjusted their businesses. “Automation has been important to some of the prospects looking at our equipment, and some of our trade binder customers are changing their business into quick turnaround service organizations,” he said. He noted that some customers could not make capital investments during the pandemic and that they therefore had to rely on trade binders for quick finishing to keep customers satisfied. “Even prior to the COVID-19 pandemic,” he went on, “perfect binding was relatively strong, but in the last 12 months, we were surprised at how much the book publishing market grew. Some said, ‘Oh, everybody is staying at home and reading,’ but it still is amazing how much demand has gone up. Overall, addressing labor challenges and automation are important factors since they can make businesses more efficient.”

Binding equipment, adhesives and paper stocks

What questions should one ask when looking for a new or used perfect binder?

Paul Steinke advised that the first consideration should be the type of work to be produced, whether it will be very short-run, quick turnaround work or longer-run jobs with a longer timetable. “That’s very important to look at,” Steinke said, “because the decision to go with full automation or semi-full automation is affected by your type of work. Secondly, it is important to look at the types of paper stocks and substrates you use; those affect the type of binder as well as the type of adhesives you should use.” Steinke also recommended taking a close look at the binder’s construction. “In perfect binding, the milling process for spine preparation can be very rugged,” he said, “so you have to make sure that the equipment is very well built, and that the maker has a good reputation for reliability and construction.”

Chris Eckhart seconded Steinke’s advice, based on a recent binder purchase for his own company. “We understood what kind of jobs we planned to run,” he said, “knowing that if you run 500 books, then you want one binder, but if you consistently run 5,000 or 10,000 or more, then you want another kind of binder.” Eckhart’s market was book manufacturing and so he chose a binder with gathering pockets and a high feed volume suitable for large book runs.

What factors are important in choosing the correct adhesives?

“This is a pretty in-depth question,” said Cassidy. “There are a lot of different glues out there in the bookbinding world. It’s not just ‘here’s our one spine glue and here’s our one side glue.’ To start, you need to look at what type of books you are making – hardcover, soft cover, lay-flat books – and second, what type of equipment you have.” The type of equipment can dictate which adhesive is required. “Then,” said Cassidy, “it is crucial to consider what types of stocks will be run most of the time, and the likely run speeds. Those are probably the two most critical things for us as we talk to prospective customers.” And, said Cassidy, the quality of the books influences the adhesive choice. A provider of low-cost books will choose different adhesives than a maker of specialty or other high-end books.

Cassidy also weighed in on working with recycled stocks. “It can be difficult to get good adhesion with recycled papers,” he said. “There’s just not a lot of fiber in those papers. The remedy is not necessarily the glue to use; a lot of the solution lies in doing good spine prep – how you are building that book. That’s really where all your quality begins.”

“From the equipment standpoint,” said Steinke, “we primarily look at two different types of adhesives; it’s either EVA, which is multi-purpose for most substrates that have good paper fiber, or it’s PUR – polyurethane-reactive adhesive – for the stocks that have a little more challenge, a little less paper fiber.” He explained that with recycled stocks, high clay content stocks and enamel stocks, PUR adhesive is more adaptable for producing binding strength. “Over the past few years,” he said, “we have seen an increase in PUR requirements in the smaller binding systems whereas, traditionally, PUR has been popular in the large systems for long runs.” Now, even single-clamp binders at an entry-level price point are offering PUR. “Some of that is being driven by case binding,” Steinke said, “Case binding traditionally has been sewn book lots and then going into a casing-in process. I think with digital printing and the ‘I need it now’ environment, some of the migration to PUR is because it is less labor-intensive than sewing.”

While these may be the main things causing a switch to PUR adhesive, Steinke noted that it is important to understand the different types of jobs that customers run and their turnaround times, because PUR adhesive requires more curing time to build a strong bond. “You can’t PUR-bind a perfect bound book and then immediately put it in a shrink wrap,” he said, “It must have access to the air to fully cure. Another thing to take into consideration is that PUR relies on moisture in the paper and moisture in the environment to cure, and this affects the manufacturing process as well. PUR is a more challenging in drier parts of the country and less challenging in humid areas. Though all these things must be taken into account, we are seeing an uptick in the PUR requirements in our perfect binders.”

Holsborg added a caveat on choosing and using adhesives. “All of the recent trucking issues – trucks held up in depots and delayed in travel – can lead to problems, especially on quick turnaround jobs,” he said. “If you don’t allow books to cure long enough and you put them in a truck that travels in a cold environment or goes to an unheated warehouse, books can develop adhesion issues. It could be due to the recycled fiber in the stock or it may be a combination of things, but we have seen a rise in these types of problems.”

Cassidy offered estimates on curing time requirements. “In a perfect world,” he said, “you would have a 24-hour wait before you send out a job, and your books would be fully cured. But that is not the world we are living in.” He has seen, however, new formulations of PUR adhesives that can set up faster. “Some will start to have a good 50-60% cure after eight hours; others are not getting to that point until 12-14 hours,” he noted, while saying PUR is not a panacea. “Some people think PUR is this magic glue that can stick to anything out there,” he said. “We see people who are having trouble with EVA who seem to think, ‘Okay, I am going to go out and buy a PUR unit and solve all of my problems.’ That is not necessarily the case. You still need to do good spine prep; that is the building block for creating the fiber content that allows PUR to create good adhesion.”

How does the type of paper stock affect gluing, folding and binding in general, and how can problems be resolved?

When it comes to different paper stocks, said Steinke, spine preparation is a key aspect for perfect binding. “You also have to be aware of ink coverage,” he said, “because that can affect the actual characteristics of different paper stocks as well.” The inkjet printing process can lay down a lot of water-based ink to produce good quality images; this must be considered along with the stocks that are being used. “For perfect binding and some paper stocks, having flexibility to use both types of adhesives is a plus,” he added.

Eckhart said about flexibility with EVA and PUR adhesives for variations in paper stock: “My suggestion is to be prepared to deal with it; have equipment that can use different types of glue and have relationships with glue companies that can supply various types of glue.”

Holsborg added input about problems with scoring for various paper stocks. “When you have stock with no grain or mixed grain or the wrong grain,” Holsborg said, “I find that you really need to die score a lot more covers in order to reduce the amount of cracking.” He stated that he also is laminating covers now to solve the cracking problems on the outside on newer stocks and uncoated stocks. “The uncoated stocks are especially a challenge,” he said, “because the grain, especially in the past couple of years, seems to pop off the paper. It is not traditional cracking; it is actually flaking, and we end up having to put a matte film on covers in order to solve the issue.”

How about some tips for dealing with glues and adhesives on uncoated and coated papers?

When using adhesives on uncoated paper, Cassidy advised running the adhesive a little bit cooler. “This will make it slightly thicker,” he said, “and you won’t get so much wetting out into the uncoated stocks.” And, as opposed to roughing up some stocks to create more fiber, with uncoated papers Cassidy’s advice is to not beat the paper up as much. “As far as the type of adhesive to use,” said Cassidy, “if you are running uncoated stocks, and you have the flexibility to use either PUR or EVA, people generally use EVA. That’s not to say that you can’t use PUR, but if you are running more coated stocks, PUR comes in handy because it creates a much stronger bond.” For recycled paper stocks, it’s back to spine prep, including notching, micro-notching and different tooling in the milling station to expose more fibers.

Holsborg stated that for dealing with adhesion problems on different types of paper stock, his company uses a trial-and-error approach. “We round up all the talent we have here to address the problem; then we take it one step at a time and try different things,” he said. “We have developed a system where we will come up with a plan and we will try one thing at a time until something works.”

The supply chain quagmire

How has the supply chain meltdown affected binders and finishers? How have they adapted to the situation or even found new business opportunities?

Eckhart shared his experiences as a bookbinder: “We saw books that may have been produced overseas not being printed or bound overseas because of the disruptions in getting materials or books back to the US.” He noted that the problems abroad and in the states are likely to continue for quite some time. “Stateside trucking, for instance,” he said, “that’s just not going to get any better. We’ve got a high demand for goods, but a shortage of drivers combined with production capacity that is diminishing. These are things that we are just going to have to deal with.” Eckhart advised a closer focus on aspects that are within a binder or finisher’s control, saying, “We have to become more attuned to our inventory. We have to make sure that we have good, strong relationships with vendors and that our suppliers understand our needs. We are going to have to make sure that we understand our needs and what our usage is over the course of a quarter or a half a year.”

“We learned a very important lesson during the beginning of COVID-19,” said Holsborg. “We pivoted and made face shields for a couple of months in order to have our factories stay open as essential manufacturers. What I found as a solution to supply chain issues was to buy in scale with other vendors and other customers.” Holsborg teamed up with four other similar companies; rather than competing with one another and bidding up prices, they joined forces to buy materials – plastics, foam, elastic – in volume.

Steinke described the supply chain challenges from the perspective of an equipment manufacturer. “We have seen more manufacturing being kept in country,” he said. “I think that is a reaction to the increase in demand for binding that we have seen since the pandemic began. Shipping out of the Asia Pacific region is a challenge (Standard Finishing’s Horizon equipment is from a Japanese manufacturer), and we saw that impact as early as the third and fourth quarter of 2020 with limited container availability and shipping delays.” Steinke’s company has had to stretch out its forecasting and be prepared for more delays in receiving inventory. “We typically shift inventory and make sure to supply everything to customers at the very end of our calendar year; I have already been doing that since February of this year,” he said. “Those are the kind of things we have been working through, but the silver lining, I think, is that there is more business staying in our country and that is working out for the good of everyone.”

Cassidy weighed in as an adhesive distributor. “We have been hit hard from several different aspects,” he said, “including the port problems on the West Coast and the extreme weather down in Texas shutting down polymer refineries. I have spent my time making sure we are keeping customers running.” Cassidy pointed out that, in this situation, it is beneficial to have a relationship with a distributor. “We can offer a shelf of products that individual manufacturers cannot, offering products from some manufacturers that have remained strong in certain technologies and others that have remained strong in different ones.” Cassidy helped some customers test secondary products or test new products to use as alternates. “As Chris Eckhart said, you have got to keep track of your inventories and your usage. With adhesives, that means making sure you are not over-applying and that you don’t have any broken seals that are leaking glue. There are lots of moving parts, but this is why you partner with suppliers and why suppliers partner with their customers. When times get difficult, you work together to find the best solutions to keep you going.”

Top 5 Things to Know About No-Cost Plant Assessments

September 9, 2021

By Liz Stevens. writer, PostPress

The US Department of Energy (US DOE), through its Industrial Assessment Centers (IACs), offers no-cost expert assessments to small- and medium-sized manufacturers. The assessments are conducted by teams at 31 universities around the US and result in reports with detailed recommendations. Here are the top five things to know about this valuable US DOE program.

The Offer

Since 1976, the DOE has offered no-cost, site-specific expert assessments and analyses to manufacturers. The program is aimed at improving energy efficiency, reducing waste and increasing productivity by making recommended changes to processes and equipment. More than 18,000 assessments have been completed.

Manufacturers may contact an Industrial Assessment Center (formerly called Energy Analysis and Diagnostic Centers) at a participating university in their region to explore the assessments, analyses and resulting reports. IACs at these universities train the next-generation of energy-savvy engineers, more than 60% of whom pursue energy-related careers upon graduation. IAC assessments are conducted by engineering faculty along with upper class and graduate students.

For qualified manufacturers, a remote survey of the plant will take place, after which an IAC team will arrive for a one- to two-day on-site visit. The team will later perform detailed analyses of the site’s specifics and make recommendations in a confidential report with estimates of costs, performance and payback times. The IAC team will follow up to learn which recommendations have been implemented.

The Criteria

Manufacturers can contact the closest IAC location to explore or initiate an assessment if they meet these criteria:

Within Standard Industrial Codes (SIC) 20-39
A US manufacturer located less than 150 miles from a participating university
Gross annual sales below $100 million
Fewer than 500 employees at the plant site
Annual energy bills more than $100,000 and less than $2.5 million
No professional in-house staff to perform the assessment

IAC locations are spread across the continental US. IAC locations in the West are located in Colorado, Oregon, California, Arizona, Idaho and Utah. In the South, IACs are found in Texas, Oklahoma and Louisiana. IACs in the Midwest are in Ohio, Wisconsin, Indiana, Illinois, Missouri and Nebraska. In the Southeast, IACs are in Georgia, Florida, Tennessee, Kentucky, Alabama, North Carolina and South Carolina. For the Northeast region, IACs are located in Delaware, Massachusetts, Pennsylvania, New York and West Virginia.

The Nitty Gritty: An assessment in the printing industry

An assessment conducted by the IAC Center at the University of Utah in 2020 for a Utah-based commercial printer with a plant size of 525,000 sq. ft. resulted in recommendations which would result in an estimated $44,400 in yearly energy and other savings. The recommendations included modifying the facility to avoid excess maintenance costs, utilizing higher-efficiency lamps and/or ballasts, using a cooling tower or economizer to replace chiller cooling, rescheduling plant operations or reducing load to avoid peaks, eliminating leaks in inert gas and compress air lines/valves, eliminating or reducing compressed air usage, and rescheduling and rearranging multiple-source heating systems.

The Top Five Recommendations

In 2020, for SIC code 2752 (commercial printing, lithographic), these recommendations were made most frequently:

Eliminate leaks in inert gas and compressed air lines/valves (This is a biggie: It appears in the top five recommendations for 2020 for all SIC codes.)
Utilize higher-efficiency lamps and/or ballasts
Use most efficient type of electric motors
Analyze flue gas for proper air/fuel ratio
Reschedule plant operations or reduce load to avoid peaks
Insulate bare equipment

The Database

The IAC Database is available for exploration by anyone interested in seeing the contours of assessments and recommendations. As of June 2021, the database contained 19,427 assessments and 146,971 recommendations.

The Database can be searched by assessment particulars (industry type, size, year, energy costs, products), by recommendations (type, savings, cost, implementation status) and by industry type (SIC or NAICS code).

For more information about the DOE Industrial Assessment Centers and their no-cost assessments, visit https://www.energy.gov/eere/amo/industrial-assessment-centers-iacs.

In North America, we grow many more trees than we harvest

NORTH AMERICAN FORESTS ARE A RENEWABLE RESOURCE THAT IS CONTINUOUSLY REPLENISHEDUSING SUSTAINABLE FOREST MANAGEMENT.

It has been a misconception for sometime by consumers and others on the use of forests for paper manufacturing. Here are a few facts, compiled by Two Sides North America (www.twosidesna.org) on sustainable forest management.

Paper manufacturers encourage forest sustainability through their purchase and use of certified wood fiber and by promoting sustainable forest management policies and practices at home and around the globe. By providing a dependable market for responsibly grown fiber, the paper industry encourages landowners to manage their forestland instead of selling it for development or other non-forest uses.¹
Net forest area in the U.S. has been stable since the early 1900s and increased by about 2% from 752 million to 765 million acres between 2007 and 2017.² Net volume of growing stock increased by more than 5% over the same period.² Canada’s forest area of 857 million acres has been quite stable over the past 25 years.³
Each year, forests in North America grow significantly more wood than is harvested. In the U.S., average net annual increase in growing-stock trees on timberland is about 25 billion cubic feet.² In 2017, Canada harvested just over 5.5 billion ft³ of timber, well below the estimated sustainable wood supply level of 7.8 billion ft³.³
Tree cutting and removal in the U.S. occurs on less than 2% of forest land per year in contrast to the nearly 3% disturbed annually by natural events like insects, disease, and fire.² Harvesting occurs on 0.2% of Canada’s forest lands each year while 4.5% is disturbed by insects and 0.7% by fire.³
Sustainable forest practices, forest certification and government regulations require mandatory regeneration so that harvested areas continue to produce forests for the long term.³
More than half the forest land in the U.S is owned and managed by about 11 million private forest owners. Private forest lands provided 89% of the domestically produced wood and paper products in 2017.² The income landowners receive for trees grown on their land encourages them to maintain, sustainably manage and renew this valuable resource.

References:

Dovetail Partners, 2016
Oswalt et al., 2019
Natural Resources Canada (NRCAN), 2020

Embellishments and Direct Mail Equal Success

September 9, 2021

Steven Schnoll, Schnoll Media Consulting

The following article was derived from the recent publishing of “Transforming Direct Mail with Print Embellishments,” a white paper commissioned by the Foil & Specialty Effects Association (FSEA).

Historically, one of the great attributes of printed pieces is the ability to engage the attention of those who receive them. Recently, that thought has been tested by the heavy use of digital marketing technologies. As marketers seek out alternative and less expensive digital media choices, direct mail has lost some of its popularity. However, a great deal of research has shown that a reader of a printed piece is more likely to recall that marketing piece than an online banner advertisement, including a 2015 study by the Canada Post that said “Direct mail requires 21% less cognitive effort to process than digital media… suggesting that it is both easier to understand and more memorable.” In addition, “When asked to cite the brand (company name) of an advertisement they had just seen, participants’ recall was 70% higher if they were exposed to a direct mail piece (75%) rather than a digital ad (44%).”¹

Therefore, a top priority of marketers should be to maintain a close alignment with both new and traditional marketing methods to best communicate with end users. Successful graphic arts providers are working in concert with brand owners to facilitate successful delivery of content, offering direct mail as an essential part of that service portfolio. Print has always been recognized as a highly effective tool and, when embellishments are added to these printed pieces, a new experience is realized. Embellishments can boost the awareness factor for those engaged in building brand identity as these specialty effects draw attention, engage and motivate the recipient to trigger a positive action.

Joanne Gore, founder of marketing and communications company Joanne Gore Communications, was quoted in an article in WhatTheyThink magazine: “People spend 39% more time engaging in direct mail vs. digital campaigns alone, impacting brand experience, recall and results. Print has the power to keep readers informed and engaged. Adding textures and finishes like embossing, debossing, raised ink, foil or glitter teases them to do more than see print, but to touch it – and remember it.”²

This can be especially true for the younger generations. The myth is that Millennials and Gen Z’ers do not respect direct mail – or other printed material, for that matter – since smart devices and diverse digital technologies are stealing their attention. This has raised alarms among the print organizations and brand managers who must reach these potential buyers – now the largest generation in America – to grow business revenue. However, the research tells a different story.

In a study by the US Postal Service³, 84% of millennials take the time to look through their mail and 77% of them pay attention to direct mail advertising. In fact, 90% of millennials believe direct mail advertising is reliable and 57% have made purchases based on direct mail offers. To “create engaging mail pieces for this generation,” the US Postal Service study suggests that marketers “use enhancements such as scent, sound or texture to make your piece stand out.”

Embellishment techniques are a strategic way to gain momentum in the direct mail marketing world. The companies interviewed for this white paper cite meaningful results when leveraging embellishment offerings with printed mailing pieces.

Printed mail volume decreases, but response rates rise

According to USPS statistics⁴, marketing mail volume has decreased from 81.8 billion pieces in 2010 to 75.7 billion pieces in 2019 – a 7.45% dip in the last decade (first-class mail is down 43.89% over the same time period). However, recent numbers compiled by a 2018 DMA Response Rate Report shows that direct mail response rates are on the rise. Internal house lists received a 9% response rate, while prospect lists received an average response rate of 5%.⁵ Could some of that be due to creative embellishments that are catching the eye of these Gen X and Z generations?

Another interesting recent survey on “The 25 Most Trusted Brands in America” found that the United States Post Office ranked the highest No. 1 brand amongst Americans with a 42% rating.⁶ The fact that 42% of those surveyed believed they could rely “a lot” on the US Postal Service “to do what is right” is most revealing when evaluating the leverage direct mail has among consumers. MarketingSherpa reinforced that point with a survey that said 76% of consumers trust ads and catalogs they receive in the mail when making a purchase decision.⁷

With all the tools that marketers employ today, these statistics clearly illuminate the power of direct mail. But these direct mail pieces cannot be of a vintage nature. To make authentic connections with the target direct mail audience, brand managers need to utilize tactics that will resonate. Unless a direct mail piece strikes an immediate recognition factor with relevant personalization components and highly attractive designs that feature tactile coatings/laminates, embossing or decorative foil, the piece may lack an emotional bond. People react to messages that connect with them, and the story must be designed and highly personalized to enhance the message.

Mark Baugh, president of Baugh Graphic Finishing House, a print finishing and decorating operation in Indianapolis, Indiana, has seen an increase in volume in the direct mail market segment over the past several years. “The mailbox is a competitive marketplace – not much different than retail shelf space,” said Baugh. “Direct mail marketers have a very short time period to attract a potential customer, and embellishments have helped get the message across.”

Why does direct mail work?

Potential customers want to be treated as individuals, not as a commodity. Personalization – coupled with a relevant message – is one of the best ways to engage an individual. By using data to target the person to whom the direct mail piece is being directed (i.e. birthdate, wedding anniversary, new homeowner, etc.), the direct mail piece increases in value to that person. The direct mail piece becomes something more than a sales tool – it begins to build long-term business relationships that grow revenue.

Touch is an especially important element in a direct mail piece. When a potential customer opens the mailbox and starts to sort through the contents, a piece of mail that is enhanced with a special softness, look or shape becomes a powerful form of non-verbal communication. Couple that with intriguing imagery and a compelling personalized message, and a direct mail piece is a step ahead in capturing the attention of the recipient. This relates to the neuroscience of touch.

In 2015, Sappi North America produced a book called, “A Communicator’s Guide to the Neuroscience of Touch.” This book illuminated the science of haptics – or “how the things we touch shape the way we feel.” Feelings are an integral part of a purchase decision, so it makes sense to integrate ‘touch’ into printed direct mail as a means of gaining attraction. Dr. David Eagleman, director of Baylor College of Medicine’s Laboratory for Perception & Action, is the primary author of the publication. Dr. Eagleman explained, “In humans, touch represents a powerful form of non-verbal communication. Our sense of touch plays a fundamental role in daily life, from learning about objects to communicating with people.”

The book explained, “To touch a thing is to trigger a reaction: as soon as we do, we begin to feel differently about it. We begin to feel we own it, and research shows that makes us value it more.” This ‘endowment effect’ can translate into purchase decisions. “Scientific studies show that people who merely touch an object, or even imagine touching it, begin exhibiting a sense of ownership.”

If direct mail can trigger an ownership response, it follows that creating a touch-and-feel sensory experience through the use of specialty coatings and embellishments may enhance that response. Engaging the brains of consumers through touch increases interest in the messaging of a direct mail piece and increases the chances of achieving a brand’s marketing goals.

Embellishments drive results

It is a common misconception that many of the creative embellishments are too expensive to purchase and, therefore, make the process of offering these value-added services out of reach for many customers. Today, there are many ways Print Service Providers (PSPs) can work with printers and finishers to add specialty foils, coatings, and laminates to all types of printed materials. This includes hot and cold foils, digital foils and coatings, and specialty laminates (ex. soft touch). When these added embellishments encourage a higher direct mail response rate, the return on investment becomes evident.

MCD, Incorporated, a print finisher in Madison, Wisconsin, has seen an increase in recent years from customers looking to enhance direct mail pieces using foil stamping, embossing and specialty coatings. “We feel there is a direct correlation in increasing response rates by using specialty embellishments,” stated MCD National Sales Manager Sean Hurley. “By increasing brand recognition and perceived value, the customer’s response rate increases. We feel this justifies a slightly higher cost per piece and dramatically improves the customer’s return on investment.”

On the website home page of The Slate Group of Lubbock, Texas, is a phrase that transcends the success of the company: Educate and empower. The company has an array of offset and digital equipment, but it is not just the equipment that exemplifies its fantastic double-digit growth and profitability – the company also thinks “out of the box” with creative embellishment offerings. The Slate Group purchased a Duplo DDC-810 Spot Coater, and it has led them down the path of customers saying a lot of “oohs and ahhs” when they see the unique internal marketing pieces presented by the sales team. Don Denny, owner, believes, “a large part of our success is educating young designers who have never been in a printing plant to the many embellishment opportunities to make direct mail pieces stand out.”

A direct mail piece for the University of Wyoming featured diecuts and spot raised UV, helping the school increase enrollment by 18%. Courtesy of Slate Group.

“Customers are looking for ways to transcend the ordinary with their direct mail pieces,” according to Brad Phinny, COO for The Slate Group. A great example of a distinguished direct mail piece is one done by Slate for the University of Wyoming, which includes both diecutting and raised spot UV coating.

Denny added, “Our investment in embellishments has provided us with an excellent ROI and provided great value-add to retain customers.” With more than 1,000,000 direct mail pieces printed per month, embellishments have been a big “WOW” factor that leads The Slate Group to good partnerships and door openers.

With only a short time span to attract consumer attention, embellishments get the direct mail message across. Photo courtesy of Baugh Graphic Finishing House.

D’Andrea Visual Communications of Cypress, California, calls itself a “visual solutions provider reimagined.” The company has embraced the world of embellishments with a diversified portfolio of offerings, including the addition of cold foil technology for its printing operation. The company added an Eagle Systems cold foil unit to offer metallic decorating as an added advantage for its customers. One of the best examples, as explained by account executive Denise Okata, is a piece done for FX Networks, a division of The Walt Disney Company. This piece is not a typical direct mail piece – instead, it is 64-page booklet.

The print run of 1,500 was directed to solicit local TV stations to air a television program. “This piece was expensive to produce but got an excellent return for FX,” said Okata. Hot and cold foil, debossing, flocking and special UV inks were employed to make this product truly unique and get the attention of the target recipients. “We are not a huge company,” she continued, “but we provide a boutique offering of services with creative ideas that separates us from our competitors.”

Conclusion

Direct mail is a significant part of every individual’s life, whether it is directed to a consumer or business – but not all direct mail is effective. As part of a 2019 study conducted on millennials⁹, one of the millennial consumer interviewees said, “I don’t read a newspaper… but I will look at a direct mail piece if it is highly personalized and has an intriguing design.”

Optimizing direct mail for consumers requires a seamless marketing platform that creates an engaging personalized message with attention-grabbing design techniques. Graphics organizations that take advantage of these concepts can propel their companies – and their customers – to higher levels of success.

When a printer goes beyond ink on paper to add the vibrant visual and tactile elements that can be experienced with diecutting, foil and other embellishments, a direct mail piece now resonates with statistical ROI for the customer.

Now is the time to reach out to print customers and prospects to encourage the use of embellishments to increase response rates and profitability with direct mail projects. Marketers are fighting for attention in the consumer’s mailbox. Embellishments are the key to winning the battle.

References

“The neuroscience behind the response-driving power of direct mail,” July 31, 2015, https://www.canadapost.ca/assets/pdf/blogs/CPC_Neuroscience_EN_150717.pdf
Gore, Joanna. “Marketing in a COVID-19 World.” WhatTheyThink, May 2020, pp. 24-27
“Still Relevant: A Look at How Millennials Respond to Direct Mail,” accessed June 2020, http://www.lendingsciencedm.com/how-millennials-respond-direct-mail/
A Decade of Facts and Figures, accessed June 2020, https://facts.usps.com/table-facts/
“Is Direct Mail Dead?”, Mail Shark, accessed June 2020, www.themailshark.com/resources/articles/is-direct-mail-dead/
The 25 Most Trusted Brands in America 2020, Morning Consult, accessed June 2020, https://morningconsult.com/most-trusted-brands/
“Marketing Chart: Which advertising channels consumers trust most and least when making purchases,” MarketingSherpa, January 17, 2017, www.marketingsherpa.com/article/chart/channels-customers-trust-most-when-purchasing
“Valassis Research Identifies Factors That Influence Consumer Shopping,” BusinessWire, February 17, 2020, https://www.martechcube.com/valassis-research-identifies-factors-that-influence-consumer/research
2019 Schnoll Media Consulting research project on how Millennials and GenZ view printed products

Leasing Equipment – Buyer Beware

September 9, 2021

By David Spiel, Spiel Associates, Inc.

When a printer or finisher is considering new equipment and sits down with a supplier and a leasing agent, how does the finisher know who is on his side and who is looking out for his best interest – or even knows what the “best interest” is? Consider this: An honest machinery dealer will not oversell a customer on equipment, especially if he wants future business. A leasing company, in many cases, is not concerned about what is the best equipment for the application or even has any understanding of what the best options are. Granted, many leasing representatives are honest, hardworking people who will not oversell a customer, but there are those who will.

I recently worked with a customer who was starting from scratch and needed to buy a perfect binder, a laminator and a case binding line. When I visited his plant, I didn’t see a paper cutter. It may be the first shop I have ever been to that didn’t have one. The shop did no cutting and only needed a cutter for this particular application. I suggested a particular lower-priced cutter because it was the right fit for the customer. When the leasing agent asked why I had sold the cheaper cutter, I told him it was the right fit for the job and the customer didn’t need anything more for his application.

Many times with digital printing equipment, I have seen companies trying to sell bindery equipment with the lease and the customer not really getting a fair look at what bindery equipment might be best for the operation. This is where it can get tricky. Are the supplier and leasing agent one and the same? If so, how can the customer tell if the agent is understanding the additional bindery or other finishing equipment the customer might really need?

The large digital printing equipment companies have their “go to” partners for bindery equipment, in many cases. That makes sense for them because they can pick out what the customer needs from a shopping list: perfect binder, laminator, inline punch, etc. Now most of the machines they will recommend are good machines, but are they always the best fit for what the printer/finisher may be using it for?

If a particular printing equipment supplier only has one partner for bindery equipment, that is what he will recommend. A savvy customer will compare it to other brands and look at what is available in the marketplace. There are a variety of quality suppliers of bindery and finishing equipment that can work both inline or offline with most all digital printing equipment.

And, depending on what the application or applications are for new digital printing equipment, it may be that additional bindery or finishing equipment is not necessary at all. For instance, if the customer assesses that there will be less than 30% of the jobs that will need to be perfect bound, why invest in a perfect binder? In any medium- to large-sized cities, printers can find a trade binder/finisher to work with to help with binding needs. With the current shortage of labor, it might make even more sense to work with a trade binding/finishing partner.

The key is to be aware of what else is available. I highly recommend that customers evaluate the potential choices before including whatever bindery equipment is offered to them because it is easy to include it in a lease that covers the digital printer and bindery equipment. It is all on one lease and it is the easy decision, but it may be overpriced, and it may not be the best machine of its type.

Another bindery option that I see many customers purchase with their digital equipment is an inline punch for plastic or wire-o coiling. When I ask the customer the price, I always hear the same answers: “I don’t know, it’s in the lease,” and “I don’t know how much I am paying, but it is not much.”

A good entry-level offline automatic punch should last at least 10 years and maybe even 20. A heavy-duty automatic punch, if maintained properly, should last at least 20 years. So, does it make sense for a customer to purchase an inline punch if there is potential to move to a different or larger digital press in five years? Also, a good entry-level automatic punch should punch over 50,000 sheets per hour. This can handle multiple digital presses. So, there usually is no need to have an inline punch on every digital press if the customer already has several. And, if a press goes down, the customer has no access to the punch. In this case, an inline punch makes little sense except for potentially smaller operations with only one press and where it is most likely it will stay that way. Finally, can the inline punch handle the wide variety of paper stocks and sizes that a standalone punch can produce? The answer, in most cases, is no.

The same holds true for perfect binders. Inline perfect binders are very expensive, extraordinarily limited and often cannot bind a good variety of stocks and sizes. Buying one makes sense if printers knows what jobs they are expected to run on a regular basis, but it makes little sense if the customers are expecting a variety of jobs and paper stocks. Again, a quality offline perfect binder will last at least 10 and maybe even 20 years and, in most cases, are much less expensive than an inline option. Does a customer want to buy a new perfect binder each time the shop upgrades to a new digital printer? In addition, as stated earlier, it is important to look at how many jobs the customer will be perfect binding. It may make the most sense to partner with a trade binder/finisher for the bindery work.

The bottom line is when a printer or finisher sits down with a sales rep and/or leasing agent, the factors above should be considered. Is the agent selecting the best binding/finishing equipment for what the printer will be producing or is equipment being sold that happens to be part of what the digital printing equipment company is offering? Is the finisher getting the best price, or is it just hidden in the lease? Can the machines do most or all the jobs that are needed to be produced, or will the printer end up farming a fair amount of the binding/finishing work out? Lastly, when analyzing what type of binding will most commonly take place, does working with a trade binder/finisher make the most sense?

When the leasing company rep asked me, “Why didn’t you sell him a more expensive cutter?”, I replied, “Because he doesn’t need one.”

David Spiel is the co-owner of Spiel Associates, Inc., a bindery and finishing equipment supplier in Garden City Park, New York. For more information on Spiel Associates, Inc., visit www.spielassociates.com.

Extreme Branding – Innovating a More Personal Future

September 9, 2021

By Christine Yardley, Print Panther

It’s hard to imagine a post-pandemic world, but history proves innovation and creativity prevail during times of crisis. The print industry is no exception to this. From direct mail to packaging, the future has changed. Tactile, meaningful and impactful print will be a clear winner coming out of a digitally saturated period of history. We all want to touch again and that will keep embellished print at the forefront.

Christine Yardley took extreme branding and her love for foil to a new level with her dress, skirt and boa made of MGI Matte Gold and Crown Roll Leaf Holographic Gold and Silver Foil. Kudos to Cary Mann and Jeff Yardley for art direction and creation. Photography: Jenn Grachow. The boa was a labor of love that took 10+ hours to stitch together. All foil used was remnants. No new rolls were harmed!

Everyone recognizes it. Brands have become dislocated from their consumers or customers. COVID-19 has exacerbated this. Everyone talks of the online experience, but what is the physical experience? What really is an online experience?

More importantly, has the perception of an online presence become so important that the people who create the connections between the brands and their customers forgotten how to make it physical? Have we forgotten how to create a physical experience?

Remember the days of shelf wobblers? Most likely many of you do not, but brands took a physical presence in stores to reach out to their existing and potential customers. They attempted to talk to them through a clever physical call out. We’ve come a long way – or have we? Is simply clicking on a button on a phone or laptop the same thing? Is a brand’s message delivered in a “pop up” or website within a website creating the experience most brands would seek? For most luxury brands, the answer would be a resounding no. They want every touchpoint with their customers to ooze the presence of their brand and the specialness of their customers. But what about more everyday brands?

For them, the truth is – in many cases – they are becoming disintermediated from their customers, (i.e., they exist on other brands platforms). They now work overtime on their relationships with their customers/consumers. But how to get personal?

For a lot of brands, getting something physical into the hands of their customers may not be feasible ahead of the customer receiving their product. But for many brands, a touch, feel and smell message can make the difference between a converted buyer, employee or even a possible investor and an unengaged consumer.

We know sensorial experience matters. It is why the Grand Hyatt hotels spray their reception areas and rooms with a particular fragrance. And let’s face it – we all have lost the sensorial experience we once enjoyed in these COVID-19 times. But that means it is more important than ever to offer something physical, tangible and, above all, sensorial.

The question for our industry is: Do brands and the people who serve them in creating their customers’ relationships understand what we can do? Opening a printed, laminated, foiled, varnished and personalized physical message can be so powerful – but do the brand managers and agencies that serve them understand what new potential exists?

As an industry, we need to rise to this challenge. We have the opportunity to legitimately help brands connect with their customers and have their customers feel special and cared for by the brands they choose, but we must show them the way.

I encourage my fellow embellishers in the industry to create enticing samples of what your capabilities are and what is possible with foil, specialty UV coatings, laminates and more. You can see a dramatic example of this in the production of the Konica Minolta/MGI Extreme Digital Guide that we produced in 2020 that won Best of Show Honorable Mention in the FSEA Gold Leaf Awards. More of this type of work is what we need to showcase our capabilities.

Let us not get stuck in the now, but think about the way in which we can innovate our own industry to make brands personal. We have the technology like never before and we have to embrace it. Above all, we need to make the brand managers, and the people who help promote those brands, understand what a difference these innovations can make.

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