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By Andy Brown
Every two years, the Print Services & Distribution Association issues an industry report that sheds light on the state of the business document industry. On one hand, Formtrac 2008 reinforces what other print industry reports have already discovered: The business of manufacturing and selling print, as we once knew it, is going away.
Printing has become a commodity. The consolidation of printers, the decline in sales of traditional products, and downward pressure on prices and profit margins are ongoing trends, characteristic of a mature industry. The end of this story is tragic for many long-standing companies. Having failed to understand and react to historical, social and economic forces, they are destined to go out of business.
But there’s another story. A class of innovative print entrepreneurs—call them ‘printrepreneurs’—have emerged and reinvented their traditional businesses in ways that allow them not only to survive but flourish in a competitive print market. They’ve adapted to the changing environment by changing their business models.
It’s not hard to see why many companies making the successful transition have their roots in the business forms segment. In contrast to their commercial printing counterparts, most business forms printers did not employ their own sales forces. Instead, they cultivated relationships with independent distributors.
Many independent distributors were successful sales reps for one of a few major companies, including Moore Corp., Wallace, Standard Register and UARCO. Eventually, they left to start their own businesses. Besides being entrepreneurial, these sales reps were trained to sell solutions, not products. Their job included designing forms based on how they would be used. This type of selling requires a deep knowledge of what the customer does. Only by knowing a customer’s business processes could sales reps offer a solution that would save them time or money.
Distributors today are in a unique position to build on their entrepreneurial and problem-solving legacy. Their independence helps insulate them from the industry’s consolidation, since they’re capable of working with any printer. More importantly, they’re flexible enough to respond to their customers’ changing needs. In this way, they’re reengineering their identities and positioning themselves in a variety of ways.
Printrepeneurs are executing seven primary strategies to stay ahead of the curve. The diverse business models that result from these strategies affect who distributors target as prospects and how they market themselves to clients, but the common denominator is printing expertise.
The Ad Agency strategy emphasizes the sale of creative services, such as graphic design, web design, copywriting and media planning. Distributors are successful acting as ad agencies by targeting clients that are too small to command the attention of established ad agencies. To successfully execute this strategy, distributors need to hire in-house creative staff or build a network of freelancers. The product mix for these companies includes marketing collateral such as brochures, advertisements and promotional products.
The Systems Specialist strategy positions distributors as business process improvement consultants. They engage clients with solutions to reduce overhead, maximize efficiency and drive sales. Their product mix includes sales of integrated documents, bar code labels and bar coded documents, for example.
The Systems Integrator strategy builds on the systems specialist strategy by adding the sale and implementation of equipment such as bar code and document scanners.
The Outsourced Services Supplier strategy targets customers with in-house printing capabilities or print purchasing staff. A distributor’s goal is to take over these responsibilities as a third-party provider. Competitive pricing and sophisticated reporting systems are keys to successfully adopting this strategy.
The Integrated Product/Service strategy extends the outsourced services supplier strategy by replacing more than the customers’ internal print capabilities. It also takes over the design of printed products and becomes responsible for other functions, such as mailing and fulfillment. Check, invoice and statement printing and processing are examples of functions provided by this type of distributor.
In the Marketing Services Specialist strategy, distributors function as critical support to their clients’ marketing departments. They translate their clients’ strategic marketing goals into detailed campaigns. Distributors working in the direct mail arena have had particular success in this role, acting as coordinators responsible for a campaign’s seamless execution.
The Product Specialist strategy allows distributors with deep knowledge about niche products to approach clients as experts. The products may be organized around vertical markets, such as health care, or they may have value across industries, such as security products.
For this issue, Print Solutions asked readers how their individual companies were responding to the industry’s changes. Their stories are as different as their experiences, sizes and client bases, but each one illustrates the flexibility their customers demand. It’s one thing to talk about strategies and another to put them in practice. The distributors profiled on the following pages do just that.
Andy Brown is managing editor of Print Solutions magazine. Email comments to abrown@psda.org.
Editor’s Note: Formtrac 2008 was prepared exclusively for PSDA by Ivars Sarkans, Sarkans & Associates, Los Angeles. To purchase a copy of the report, visit psda.org or call (800) 336-4641.