At one time, printers were his customers. Now, after spending many years working at industry equipment manufacturers, Konica Minolta Marketing Services global chief executive Yves Rogivue finds himself at the helm of a business that is itself a huge purchaser of print, dealing with thousands of printers globally.
Following Konica Minolta’s acquisitions of Charterhouse (2012), Ergo Asia (2014) and Indicia (2015) Rogivue joined the company in the autumn of 2016 with the aim of bringing together these disparate parts into a cohesive whole, and the group was rebranded as Konica Minolta Marketing Services (KMMS) 15 months ago.
Now, after what he admits has been some painful restructuring, he’s aiming to capitalise on the many and varied capabilities of the KMMS ‘dream team’.
Jo Francis Yves, the last time we met, many years ago, you were an executive at press manufacturer Manroland. How did you make the switch to the side of the industry you’re on now?
Yves Rogivue I was working for Manroland in the US, but I wanted to go back home [to Switzerland] so then I joined Muller Martini. And then there was the big financial crash of 2008 and business was very difficult as a result. Meanwhile the guy who was the CFO of Manroland in the US had come from a consulting company, and he went over to InnerWorkings and became CEO and that was the connection.
So that resulted in your move to the procurement side, in 2012?
That was my move to the print management side. That was a very interesting time and it was also the time when print management got a bad name. Part of the reason for that was because it was kind of squeezing printers. That was one of the parts I always felt uncomfortable about. And at that time one of the good guys on the block was Charterhouse. They managed to have tough but fair relationships with printers.
Do you think you’ve maintained that? Some printers are very anti-print management, while some embrace it.
Konica Minolta’s main clients are printers, so it would be very short-sighted if we were to abuse the printers. We see each other as partners. Printers are clients of our mother company, and suppliers to KMMS.
Were you taken on by KMMS with a brief to restructure the business?
Well, after I stopped working for InnerWorkings I had some informal discussions with KM here in Europe. One of the things I had wondered at the time was why KM had not done anything to bring together their acquisitions, these two jewels Ergo and Charterhouse? And that’s how it started, the mission to make a joined-up offering. That informal discussion then resulted in me joining the business, but that was about a year later.
You could see real potential in putting together Ergo and Charterhouse, and then Indicia?
Yes. Print is just one aspect of the marketing mix. A brand wants to be seen by their customers in the marketplace so print is and will be – hopefully forever – a very important part of the mix. But it’s not the only one. The weight is shifting. It goes to digital, and then it comes back again. Marketing managers want to connect with customers so they will use print but they also use a lot of things around it that a printer will not necessarily have the know-how about.
In the marketing services realm it’s a bigger offering, compared to a straight print manager or broker.
And meanwhile printers need to think about their own offerings?
When I was at Manroland I remember meeting Robert Keane, the founder of Cimpress, at a print show in Chicago. By coincidence I was actually at business school with him in the 1990s. And he was talking about buying multiple large presses – an incredibly large order. It’s so refreshing to see what he has built. Printers have been under pressure but are coming back. If you have a niche or you can industrialise, like Robert, you can do fantastic things and be very profitable. The whole thing is in a flux.
What’s your view on the GDPR effect?
GDPR, in the short and medium term, is definitely going to be good for print. The objectives of GDPR are good, as with every regulation it probably overshoots and misses some of the targets, but to bring regulation in is a good thing, and to try not to annoy people with unsolicited calls, emails or direct mail is a good thing. We had a big homework job to do at Indicia, our data business, around GDPR. Now we are in a position to go out and consult, and help our clients and suppliers.
What sort of impact has it had so far?
There is a lot of insecurity out there. Some clients are in panic mode and stop everything. Others take a more relaxed attitude.
I think that ultimately it will be good for print. Do you?
I totally agree. We have some big FMCG customers that have been carrying out zero-based budgeting exercises, which took 20% out of print volumes last year on a global level. We can now see that some of these digital campaigns have not delivered what was expected. So that will also come back into print, but maybe at a higher level.
As in higher value print pieces?
Yes, from higher specification business cards to leather-bound booklets. The haptic power of print. It’s an opportunity to set yourself apart.
How does the dynamic work between you and the mother ship?
Cross-fertilisation always works well on paper. We do have some ideas about how we can extend KM services into our supplier base, but it’s informal and voluntary. KM itself is in a transformation. They sold their camera business and today 70% of the business is printers, from office printers to digital printing, foiling and other new technology. KM also just acquired a $1bn US bio-medical company. It’s a technology company. We support that and are getting more and more involved on that side. For example, we have AI technology using sensing devices that has direct potential impact for our clients in FMCG. We have a joint venture with Unilever in Japan using sensing devices in retailers, measuring people’s behaviours with POS. Using data collection and algorithms, how can we improve the way a POS is designed? It’s an experimental thing. There’s a lot of work going on about how AI applies to marketing. I’m sure you will see a lot on this over the next 12 months from us.
If, for example, KM was selling an office solution to a big client, is that a way in for KMMS?
It can be, but it’s not formalised. We were introduced to a US client by the guy who owned the KM business solutions account. We pitched and won the pitch, and we worked on a major rebrand project for the client that involved a huge amount of studio services, but no printing. We had 80 people working for three months on that project.
In the most recent KMMS report and accounts, you talk about it being a very challenging market. What are the main challenges?
One of them is that some existing clients know us and put us into the box of a print management company. But our services include data-driven marketing campaigns in the digital space, we do creative production and also on-site creative production with our people at the client’s site. How do we get that across, and get the opportunity to speak and show what else we can do? That’s one of the challenges, when pure print management becomes a commodity. Like printers, PM can run into the danger of being commoditised and be price-driven. That’s boring and just about price.
I guess you’re in a pretty competitive space, all in all?
We execute and we activate across the globe and into the different marketing channels. I don’t think that space is very saturated. There are a few strong competitors that I respect very highly, but they’re not global.
And that’s something you really try to capitalise on?
There are a lot of dynamics in here. But the truly global footprint of an execution is a key strength. We don’t do the creative, but we break it down into creative production so we transcreate, translate, whatever is necessary, and we offer truly global creative production and then deliver print management, merchandise, and events, etc. For me, one of the challenges is how does a client who doesn’t know us know that KMMS is out there? That’s my challenge. And last year when I wrote that commentary we had a lot of restructuring to do so we had our own challenges and that is not easy.
You seem to have a lot of long-standing clients so you’re obviously doing something right.
Yes, we have some great clients, but we have also lost out on price.
Surely ultimately that sort of policy will unravel?
With some clients we have good discussions. Other clients just say ‘this POS needs to be cheaper’. But what about longevity and sustainability? Is it going to be in an area of the store where the floor will be mopped, so it will get wet, and if it’s made cheaper does that mean the board will degrade much more quickly? How do you want to measure that when you’re looking at sustainability and cost per use? You look at some of the RFPs and e-tenders, and the price just goes down and down. A while ago a potential customer wanted us to price a multitude of POS items. We looked at it and by taking a modular simplification approach to what was specified, we were able to drastically reduce the number of items required, while gaining economies of scale. But when we brought that to the discussion, the response was just ‘fill in this spreadsheet electronically’.
How do you get past that?
We said no, we’re not participating.
How do you find the customers who are willing to have a bigger conversation than price per piece?
The pendulum goes back and forth. It needs to swing back from procurement 101 to smart marketing servicing. But that only works if the client is willing to engage with that sort of process. We face the same challenges as printers, is it just cheaper, cheaper, cheaper or do I create value? It’s not just price, and it’s not value at any price. With marketing and procurement departments coming closer together again as partners, you have companies where you see that happening, and that’s the sort of client we want to work with.
Do you have an optimum size or type of client that is a sweet spot?
We have a good mixture of clients with varying requirements. From relatively small accounts to big global companies such as Unilever and Heineken. We don’t look on anyone as too big or too small. We’re also helping Grether’s a small pastille company, handmade in Switzerland, build a global brand image.
Would you say global reach is a USP?
We’re everywhere except Africa and Latin America. And if a client wants us to be there and will commit, then we will be there too. Because of KM it is likely enough we are already there and we have used that method up until this point.
And are you done with your restructuring now?
We’ve been looking at our own belly button over the past 12 months bringing together Ergo and Indicia, and Charterhouse, and rebranding and bringing us really into marketing activation. With restructuring, repositioning and a rebrand that has meant a lot of internal focus. You always have to be careful not to lose sight of the client, even during this sort of restructuring focus. We must always be thinking of clients, to try to stay close to clients.
What’s been your key external focus?
Always on our client. We lost one big customer, but only one. Retendering happens and there are always risks involved in that process. We’ve upgraded our technology to make us internally as efficient as possible and give clients the data they need to make their own decisions. Our slogan is ‘getting closer’, which is not just a phrase that is easy to say. We are trying to look beyond at the challenges they face. Major FMCG brands are in big discussions with retailers, retailers are fighting the internet, big brands are under various pressures as well, such as from small and agile competitors. We are trying to see how we can help. Getting a creative idea broken down in a meaningful way into a one-to-one message. I enjoy that most of all. How do we bring the message closer to the client’s client, and how can we as a company be part of that journey?
Is the software you use bespoke, is it your special sauce?
We use a suite of technology called GoWorks, including IP from us at KMMS and from KM. And we integrated software from the open market. We have to be open, for example the client might want to work with a specific DAM system. It’s a variety of software which follows through the whole supply chain, from ERP to campaign management systems to creative production systems to Interact, the multi-channel planning platform from our communications agency Indicia.
And clients might be using different elements?
Yes. End-to-end marketing is the journey we are on and it’s a moving target. Everything is developing so quickly, and I would say we are 70%-75% there. We have the core framework now, but not globally yet. By integrating Ergo and Charterhouse we are bringing the pieces of the puzzle together, but it’s still a journey to really make it seamless.
Do you employ lots of software programmers?
We have access to Konica Minolta software engineers in Tokyo and we have our own in London and in India. So it’s a combination. It’s always good to know that with something like AI, we have access to the KM experts.
On the subject of the KM mothership, I can’t help but notice that this business has made a loss every year, ever since KM acquired it.
KM have clear targets. Our first financial quarter of this calendar year was positive on a global perspective for the first time. And that’s the expectation. KM is not just going to write a cheque every year.
I was wondering about that, if you tot it all up since the Charterhouse acquisition, it’s more than £21m.
Since I joined 18 months ago there was a lot of painful restructuring and it was not easy. Old habits and traditions had to be broken up. I’m proud that from January to March  we were EBIT profitable. Plus in April and May we were profitable, I can already say that.
Do you think that this business can be consistently in the black, then?
Yes, we have to be profitable and consistently so. That is the expectation. A Japanese company is definitely more long-term in its thinking, but that’s behind us, we’re kind of at the end of the long-term. They are expecting positive results.
And that filters through to what we were talking about before, if a contract is not producing an effective return, you would rather walk away.
I would rather we walk away than take on unsustainable contracts. I feel like it’s time to stop that. We said no to a pitch recently. I said it was not a viable business opportunity for us.
Because you knew the time and effort involved ultimately wouldn’t be worth your while?
Yes. If the customer can share more information then we can talk about something more meaningful, but if it’s just a pricing exercise involving a huge amount of work, and then either a beauty parade or everything through an internet portal… I think it’s time to stop that and I wish the other guys would also stop.
Are there more internet auctions nowadays?
With internet auctions there is definitely a polarisation. A trend to use them more on one side, while on the other we see clients who see through that and recognise it’s too simplistic an approach and not delivering value. You definitely see companies go out of business because of it.
Do you think the customers realise the downsides?
Some brands want us to run e-auctions as part of our service. We get involved with a lot of compliance and auditing. But it’s difficult to see how you can run everything through an e-auction. It comes back to how print management got a bad name. If a print management firm is offering a management fee of 7% or something ridiculous like that, in the end you have to get the money from somewhere else. If you have to employ people and service accounts, that has to be paid for. And print still has a lot of complexities.
How do you choose your print suppliers?
First of all we would speak with all the incumbents of a client, look at them and their equipment. We evaluate each job so you know which printers it is good to do business with – a bit like TripAdvisor – because they are trusted business partners in our system.
How many do you deal with?
We have a worldwide network of 6,000-7,000 suppliers and we are actively working with 2,000-3,000. Very often we are working with local printers. We look at quality, sustainability and their ecological footprint. Obviously time to market is also important.
It seems that timescales are increasingly compressed.
Yes, a lot of it is just-in-time as well. I had a discussion last week with a client who was complaining about having a warehouse full of obsolete items. I said that’s we bring to the table, the complexity we take off your shoulders. You focus on your customers, our focus is the supply chain.
Do you get involved sourcing lots of things like promotional gifts?
Yes, and we have to be very careful that the quality of what we are sourcing reflects the client’s brand values. Sometimes it could be one-to-one gifts for specific events. For some of our clients we create the whole website for one-to-one marketing, we handle the sourcing of the products, the warehousing, the shipping and distribution. We run the whole thing and take it off the client’s shoulders in a transparent way.
I like the testimonial quote you use from Mike Simpson, the CMO at Stanley Black & Decker, where he says ‘You make the complex simple’.
We had this marketing slogan, I don’t even remember it, it was so complicated. I was sitting in front of Mike and he said: ‘Bullshit, this is awful Yves. What you do for me is, you make the complex simple.’ So now we use that.
How do you charge for your services?
Typically it’s open book. Sometimes it has savings guarantees in it, sometimes gain share models. On the creative production side it’s very often hourly rates and might be based on a certain number of hours per month. For our communications agency it’s project or retainer based. We are flexible, but typically it’s very open book and transparent. We want to be the extended arm of our client, and I think the best way we can do that is bringing transparency into it, because traditionally it was a black box.
So it could be a management fee or a retainer?
It depends on the project.
How do you keep it under control? There are numerous examples where companies have got into financial trouble through over-servicing large clients.
We are measured under very strict KPIs and typically the KPIs are on both sides. Every three months we have a meeting and set targets for the next quarter. We are very transparent, that is our business. I don’t want to sound like nothing ever goes wrong, because of course it does, But not too much like that.
You’re not hitting your printers with things like retrospective rebates and fees that they tend to feel unhappy about, then?
We have very upfront relationships and open communication with them. On payment terms if a printer needs cash we might look at something like an early payment discount, but we don’t force that on them. We are trying to be fair and open. The objective is to keep it fair and square in a professional way.
Has the whole plastics things had much impact yet?
That’s a good question. I’m sure it will have an impact. Sustainability is a big topic for most of our clients. It’s an interesting conversation because the whole thing about harmonisation kind of fits in there. Very often, with a modular concept, you can be cost-efficient. It needs a relationship based on a partnership and trust behind it.
How does that work?
With some of our clients we have joint business development programmes. The partnership is based on trust. We aspire to give the client innovative thoughts. We have some really great stuff in there. But if you just go through an internet bidding process you don’t have the chance to do that.
What sort of print are you buying?
It’s very much split across direct mail, point-of-sale, catalogues, and more and more digital.
Digital media or digital printing?
Both. Something like the ice cream display we have here in our office, created for Unilever, has moved from printed graphics to screens to interactive screens. Why should the screen show Ben & Jerry’s if there’s none left in the display? It becomes about content management for the digital screens. At the moment the screens are a bit too expensive, but who knows for the future.
Clever stuff. How has your life changed with your new role as global CEO?
[Laughs] I’m travelling a lot. I’m in London a lot, which is a great city. I love London, especially when the sun comes out like now. It’s one of the big creative hubs of the world. In the marketing services industry it’s the most mature market and also the most innovative. It’s so competitive and yet brings up new models.
I must ask you about Brexit. How does that affect KMMS?
Brexit doesn’t really affect us because we’re global anyway, although I know that a lot of people are nervous about the topic. I will be astonished if in five years it’s not business as usual and Britain has found its great competitive place in the new world. Everything brings challenges and also opportunities. Especially with London being such a financial and creative hub, Brexit is not going to change that. People are here, and talent is here. Maybe as a Swiss it is easy for me to say that! The overall trend toward more protectionism is a concern. At the end it’s all a glass bowl. It will balance out over time.
Talking about five years, five years from now what will success look like at this business?
The success factor is in the existing clients we will keep, and the new clients we will win in the meantime. The overall challenge of brands and products trying to find their way into an ever more one-to-one communication with their client is hugely exciting. It’s an exciting journey to be part of that and a lot of fun. Economic success will follow that. I think over the next five years we’ll probably see more change than in the past five years.
How big is the business globally?
About $500m (£370m) turnover and 550 people.
And you hope to grow that?
I’m not so much concerned about the top line, I’m concerned about the bottom line and the people and the jobs we create. I want us to be better and better.
You seem to be relishing the new role.
I hope that comes across. I really enjoy being in this environment and working with the people here. It’s a really exciting time to be around and see how this all works out. I love bringing the people into the picture who make it happen – we have a team in Bristol, and a technology team in Edinburgh. That is so much fun, whereas maybe in the beginning it wasn’t so much fun [with the restructuring]. We have so many projects to work on at the moment. It needs luck, but it’s so much fun to be in a dream team.
And the core of the business is still print management?
Our business is still 70% based on print management. And from a happy client, a client that knows us, we can then grow into creative production, creative agency, breaking down the message to one-to-one. We need the trust to achieve this and that is based on our print management relationships. And that’s what I really enjoy. And I do enjoy the fact that we made a profit. It shows that it can’t be that wrong, the journey we are on and the pain we went through last year. After pain last year we are showing we’re going in the right direction now – and that’s more fun. It’s very difficult to have fun if you are making losses. Getting people excited – including all our remote workers and people who work from home – that is the next phase.
Final question: do you miss your days working at the heavy metal end, in manufacturing?