PART TWO: IN SEARCH OF PROFITS – BUSINESS STRATEGIES FOR TODAY’S MARKET

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As we saw last time, the overall volume of print is in decline and printing companies are scrambling to find strategies to not only survive, but to grow revenue and margins.

What are Companies Doing?

In Part 1, we’ve already explored the first three strategies:

  • Acquire competitors
  • Become the low-cost producer for a niche
  • Add new services complementary to print
  • Add marketing expertise and technology to manage the marketing process which includes creating what

gets printed –commonly referred to as becoming a Marketing Service Provider

  • Use technology to change the way print is ordered and managed. In this scenario companies don’t have to create what is printed, just produce it more effectively

This time we’ll discuss the 4th option – becoming a Marketing Service Provider. (Miss Part 1?)

MARKETING SERVICE PROVIDER

If the definition of a marketing service provider is someone who sells directly to the marketing department and not to a print buyer, then there are two types of marketing service providers.

  • There are service providers who focus on executing marketing processes. They don’t do the creative, but they’ll take on the rest of the process. They go by various names – marketing operations, marketing logistics, marketing print partner, solutions provider.
  • Then there are service providers who create the content that gets delivered (including print). They focus on direct marketing programs and manage the entire process from creative to response tracking.

Marketing Operations Strategy

This is a great strategy for printers who don’t have the wherewithal to create and sell marketing campaigns. In this strategy the printer works directly with the customer’s marketing department (and often with the customer’s agency) to manage and deliver marketing programs.
Here are some examples:
Automated Collateral Management with Web to Print Technology

Rheem manufacturing company sells its product line through a dealer network. Sales collateral was designed by the marketing department and an agency, produced in large quantities and shipped to a storage facility for distribution. An administrative assistant handled dealers’ order print materials and would place orders to be picked and shipped to the dealers. Each year a significant amount of collateral became obsolete. Now a web to print collateral management system has been installed that provides dealers with the ability to order collateral online. Orders are received automatically and printed daily. Costs are reduced for Rheem, brand control is ensured, and dealers can place orders at their leisure and get up to date materials. It’s a classic win-win scenario.

Direct Marketing Operations

Direct mailers typically fit this model. They handle the backend of the process from data to response analytics.

Now digital printers and commercial printers are moving into this space and adding cross-media to the mix. The data processing, analytics, personalization, QR Codes and Personalized URLs are all higher margin services.

This strategy is ideal for printers who want to move up the value chain to add higher margin services, but don’t have the ability to sell and create marketing programs.

Become a Marketing Partner – Get on the Marketing Team

Instead of waiting for your customer to call up and order new brochures to support a new product launch, you proactively get engaged in the customer’s marketing plans as one of their partners. This partnership could be as simple as being the print partner – reviewing each print design, offering suggestions on how to keep costs low and making sure the project schedule has enough time allotted for all the steps required for a successful launch or customer event or special promotion. If you can get on the marketing team, then you can get the print and additional services as well.

A Critical Part of the Strategy
One critical element in any of the operations strategies is to own the relationship with the customer. If you do not have a direct relationship with the customer you are at risk of being supplanted by someone else.

Marketing Service Providers

Printers are transforming their business from being printers to becoming marketing service providers. This transformation requires new skill sets that include marketing, data, IT and solution selling. But by capturing the entire marketing process, from strategy to response analytics, these companies are earning the highest margins.

Here are some examples:

From Direct Mail to Cross-Media Marketing

Company A was a long time direct mail print provider for a non-profit organization. For each new direct mail campaign the non-profit would send the specifications over to Company A and they would quote and then produce the job. Along comes Company B with a better way to solicit donors using the latest cross-media techniques. Company B wins managing the entire campaign, which includes all the printing, plus a host of complementary services too. Company A has just lost out without even getting the chance to bid on the print job – ouch. Company B has just “changed the game”.

Data Driven Marketing Programs

 Some companies specialize in putting personalized data on direct mail pieces and other printed collateral. They personalize marketing elements with information such as an individual’s name, recent purchase activity, special promotional offers, variable messages and images—making the experience unique and relevant for each customer and/or prospect. This includes trigger-based

marketing, which is a marketing program that is linked to a client action which triggers the marketing program. And it includes the use of advanced analytical models to drive more relevant communications and ultimately higher response rates.

Next week we’ll take a look at how innovative companies are using technology to change the way print is ordered and managed.

If you would like more help moving your printing business to a more profitable model, PODi has a wealth of resources that can help you and your team understand your options, learn about new applications and opportunities, and sell more high-margin digital print solutions. www.PODi.org

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