Do you remember vinyl? What about cassettes? I spent many happy days in my youth building up my record collection. And I enjoyed making compilation tapes too. All of this is now a distant memory. My vinyl was sold off long ago (although with many regrets). My cassettes are no more. DAT has been and gone. Even CDs are falling by the wayside in the era of the MP3. The music industry has evolved.
Printers need to evolve too. They need to accept that good profit margins are now very difficult to make simply by selling ink on paper. Printers need to start selling a more involved service to clients. They need to start selling extra services that can have a higher profit margin than print. I call these “value added services.”
Printers that change and start selling value added services will create a new type of relationship with their clients. Customers will be prepared to place work at higher margins with these suppliers because they are getting more in return. These print companies will be in better control of their profit margins. They will be better placed to achieve the results that they need.
Print companies that keep selling print and nothing else will simply be regarded as commodity printers. They will have little control over their profit margins and they will struggle to achieve results or even to stay in business.
Here are three ways in which expanding the service offering can change the way in which the buyer treats the printer.
1. Print companies are no longer seen as commodity suppliers
They are seen as service providers and business partners that help their clients achieve their business goals. They help their clients carry out their business more efficiently or more cost effectively.
2. Buyers are willing to pay more for better skill sets
The type of sale changes when printers offer value added services. Most buyers assume that a printer will offer good service and good quality. So they choose primarily or exclusively on price. However, if a printer is offering a value added service such as data management or design, the situation changes. The buyer sees the skill levels at the printers as making a real difference. This is because they are looking at a service where they will measure by return on investment. Before, they were thinking in terms of commodity manufacturing.
3. It is more difficult for buyers to beat companies up on price
Price will always be an important decision in the purchasing process. However, in terms of print manufacture the buyer can simply compare a like for like specification. When looking at services a buyer can be encouraged to consider return on investment rather than just looking at cheapest price.
Companies offering value added services can set themselves apart from the competition more easily (if they have the skill set to sell services). This also changes the buyer’s purchasing process and creates the potential for deeper customer relationships.
Does this mean that all printers should become Marketing Services Providers? Not at all. There are a wide range of value added services that can be offered. Many printers will already have some in house, such as design or postal services. Marketing Services is certainly one strategy, but it is not the only one. Let’s focus on the magazine sector.
One printer in the UK looked at the challenges that were facing many of its publishing clients. And the challenges lay not in print, but in how to tackle producing digital editions. So they developed their own software which allows their clients to create digital editions easily. Publishers can make a single file upload for print and digital editions. This has allowed sales conversations to move away from price matching. Many clients are now interested in having an easy digital solution from a print supplier. So the lowest print price is no longer the most important factor.
Every printer needs to create their own, specific action plan to create value added services based on their customer base and expertise. Here are three action points to consider right now:
- Ask your customers what challenges they face
- Create a service offering which addresses these issues
- Develop a new sales message which focuses on the services you offer, rather than just putting ink on paper
Take a lesson from His Master’s Voice (HMV) the UK record store chain that recently went into administration (the UK equivalent of bankruptcy). HMV didn’t change with the times. Printers who don’t change with the times risk the same fate.
Matthew Parker has been buying print for twenty years and has worked in directory, B2B magazine, consumer news stand magazine and agency environments. Among other roles, he headed up print purchasing at Future Publishing when it was the UK’s 5th largest consumer news stand publisher. Matthew now runs Print & Procurement Ltd., which uses its industry insight to help generate effective, profitable relationships between the print sector and companies that need print through implementing new approaches and processes and practical assistance. The company also runs training courses in all areas of print procurement, including specifying print, choosing and managing suppliers, procurement strategy and e-procurement and negotiation.
