An end to the commoditisation of printing

Written by Colin Thompson | 04 October 2011

Print organisations are being told to tighten their belts and prepare for a further bumpy 12 months + as the developed world falls into another recession. Experts are calling for a slowdown in the economy and the printing industry may see a faster shakeout of marginal print organisations in the coming months.

Print organisations who have been hanging on by their `fingernails` because they were unable to generate sales; failed to adopt new technology and procedures; never had their financial house in order; and no people training and no business models will be closing their doors and disappearing very soon. So wake up to the solutions that are available to help you to be successful!

But there is good news for the industry. As marginal print organisations close, their customers will have to find new printers. The surviving printers are going to have an opportunity to increase their sales volumes and demonstrate their value to a new set of customers. Customers still need printing and with fewer choices, the surviving print organisations will be in better shape to control the buying process. So, invest in the `right` people of any age, more training, the `right` business models and equipment that you really need!

Why are printers going out of business? Many do not charge enough and built their entire marketing strategy on being the lowest-cost producer selling commodity products. As customers begin buying printing from the surviving printers, they are expecting to pay higher prices because they realise a printer must sell products and services at a price that includes a profit. How much do you expect prices to increase on your print projects in 2011/12 compared to 2010 (due to paper, energy, transportation, and other costs)? We believe `Sixty percent` of the buyers expected prices to increase more than three percent in prices. Buyers are aware of the market conditions, so talk solutions to help each other be successful!

Printers who can help customers to overcome the pressures they face in the slow economy will add a value. Customers will pay for that added value and everyone will profit.

Customers will undoubtedly continue to attempt to negotiate lower prices from a printer, but they are in less of a position to demand lower prices because the low-ball print organisations will no longer be in business. The remaining printers need to develop a backbone and price work profitably. Customers have seen what happens to printers who offer cheap prices. Ergo, they go out of business.

Print organisations who can help customers to overcome the pressures they face in the slow economy will add a value. Customers will pay for that added value and everyone will profit. So, discuss solutions and partnerships for both parties to be winners!

Some printers have gone out of business because they have failed to adopt new technology and techniques. Therefore it’s time to leverage new technologies. The failure of some printing companies to find ways to make print buying easier or produce work more efficiently helped them to shut the doors faster. Many of the failing print companies used the excuse that they couldn’t get their customers to use the new technology or that the customer didn’t see a value in any new procedures.

In another survey we have looked at, it asked its members to rate how effective they believed that print suppliers are at communicating meaningful differentiation from their competition. Seventy-five percent of those responding ranked their print suppliers as fair or poor. From the responses, it looks like it wasn’t that the customers needed the new technology, but it was because the printers were either unable to explain the value of the new technology or they never bothered to tell them about it. So again, wake up to your customers needs!

The remaining print organisations will need to get in front of the customers and demonstrate the value of the new technology. The new technology makes it easy for customers to buy printing and allows them to get better service, but customers aren’t going to change unless they have a reason. Solutions are the key focus for success by both parties discussing the requirements needed.

Printers can put a value on new technology and techniques. The printer can show a customer how to prepare a file properly so it will enter the workflow easier and faster. If the customer takes advantage of the new procedures, the printer can lower the price for the customer. If the customer wants to use older techniques that makes it more difficult for the printer and adds time to production, he will have to pay a higher price. Printers need to use the cause and effect of new technology and procedures and place a value on using techniques that makes buying printing easy for everyone.

Printers have to move away from price sensitive commodity work and go after the less-price sensitive printing that helps a customer to sell something. Many companies will try to sell themselves out of a recession. Operating funds will be shifted to sales and marketing efforts as competition for a customer’s money increases. This usually means more marketing printing and mailing as advertising increases.

New technology allows printers to provide customers with short-run, high-quality, full colour advertising and marketing pieces with a high return on investment. Even small companies can afford targeting their message because of the production efficiencies offered by most printing companies. Add any variety of web-to-print solutions, such as PURLs or VDP, and any size print shop can give a customer a reason to buy more printing. The printed material will have a higher value in the customer’s mind and the printer can charge more for it.
There were so many printers who were looking forward to the coming year because they can move quickly and help their customers to overcome their recession woes. All it takes is pricing discipline, a commitment to demonstrate the value of their company and its technology to the customer, and a focus on the customer’s real need of increasing and maintaining his sales during the recession.

So, wake up to the real needs of the customer and operate your business with skilled/experienced people of any age with the `right` business models for success.
It’s not as hard as you might think.

Colin Thompson
colin@cavendish-mr.org.uk
www.cavendish-mr.org.uk