During the golden age of the forms industry, manufacturers could increase their sales simply by adding more equipment. Companies that enjoyed the most business were the ones with the most presses--more production equaled more profit. You could make money by coming to work and flipping the light switch.
Today, manufacturers need bright strategies. Technology and market forces have changed our industry, and business models and operating concepts that worked a decade ago aren't effective anymore. Most manufacturers face significant challenges such as excess capacity, intense price competition and declining demand for traditional products.
To grow in a difficult market, you need ways to overcome these challenges. Three effective ones are expanding your capabilities affordably, instituting new marketing techniques and acquiring other businesses (or parts of them).
Many manufacturers are surviving today because they've diversified their product and service offerings. This growth avenue is common, and the strategy--usually a smart one--is best pursued in small increments with modest investments. It's a big leap to buy a new press that costs six figures when more affordable options are available, such as adding a special numbering machine or bar coding equipment.
To diversify successfully, you first must know if a healthy demand exists for the new product or service. Some manufacturers incorrectly assume their existing customers will start buying anything new. When adding a capability, it's best (although more difficult) to target different prospects, ones you can gain as long-term customers of other products down the road. This requires effective marketing.
Launching new marketing techniques is another effective growth strategy. Thanks to the internet, manufacturers can promote products on their web sites, launch e-newsletters, deliver emails that include special discounts and PDFs of press releases, and much more. Companies learn about your offerings in a variety of ways, and experts say it's best to use more than one medium when marketing. Try integrating direct actions that tout your capabilities (direct mail, print advertisements, etc.) with indirect ones that enhance your presence (trade shows, community events, etc.).
A third way to grow is acquiring part or all of another business. Lately, industry consolidation has occurred in waves, especially by commercial printers and big manufacturers. Large-scale consolidation (when one firm buys another's equipment and hires many of its employees) calls for a delicate balance between integration of the acquired company and retention of individual strengths. Small-scale consolidation is a more applicable strategy for most manufacturers. At Belknap Business Forms, we've purchased job jackets and negatives from a few companies, allowing us to introduce ourselves to new customers and handle their orders like reorders.
Demand for conventional forms will continue to decline, but that doesn't mean industry manufacturers can't grow. You have time to implement strategies that complement your existing business. Don't be afraid to take a good look at your company and craft a new vision. The time to do so is now.
J. Buster Weinzierl, CDC, is president of Belknap Business Forms Inc., Mayville, N.Y., and vice president of DMIA.
