Commentary & Analysis
On the Front Lines: The Value of Targeting Markets
By Ed Marino,
By WhatTheyThink Staff
Published: August 4, 2003
By Ed Marino, CEO of Presstek August 4, 2003 -- I am always amazed at the creativity and innovative spirit of our customers. Visiting customers has always been one of my greatest joys. It is exciting to see customers grow revenue, profit and market share. I wanted to take the time in the next few issues of Presstek Perspective to share customer stories which I know you will find interesting-and which I hope will help you as you work to differentiate your own business. Our first story is from a company I had the pleasure of visiting recently in Oakland, California: PsPrint (www.psprint.com). As a little background, PsPrint was founded twelve years ago as PostScript Press, Inc., a color separation trade house. Like many of its counterparts in the prepress industry, the company saw the writing on the wall relative to the future of film, and in Year Three of operation, migrated its business into short-run full-color printing with the acquisition of a Heidelberg GTO DI. In 1998, the company launched its first Web interface, allowing PsPrint to build a geographically diverse business that today is equally split between California and the East Coast. The company has 56 employees and operates three shifts six days per week, soon to move to seven days per week. More than half of the employees work in Production-and there is no sales force. PsPrint currently operates three Heidelberg Quickmaster DI Plus direct imaging presses and two Xerox DocuColor 6060s, and for the past three years has acquired business exclusively through word of mouth and its innovative Web site. Their model is clearly working: PsPrint has achieved 50% year-over-year growth and increased profitability each of the past three years. Part of the impetus behind PsPrint's new business model was the decision to initially focus its attention on the design community. According to Frank Young, President, "We built a Web interface designed for the savvy, recurring print buyer. We automated the print buying process and shifted much of the workload to the customer, and in return, they received fast turnaround and high quality at a low price. As we have grown over the years, we have worked to make our web-site more user-friendly and intuitive for the one-off print customer without jeopardizing our appeal to designers. While we want to appeal to one-off buyers, our overriding objective is, and will always remain, to be the online printer of choice for the design community - the most sophisticated user in the market." PsPrint's founder and CEO, Drew Herzoff adds: "Our theme is that we productized the business. Instead of taking quotes, we told people what we could do. We lowered price so the designer would have an incentive to use our paper and our finishing in exchange for a good price. In fact, on some applications, we find competitors' prices to be as much as three times as high." In effect, PsPrint defined a set of applications and a limited set of specifications for each application. Designers can place an order with a few clicks of the mouse, upload artwork, and get instant pricing and delivery information. Key to the success of the operation is the company's digital production workflow, with run-length being the primary criterion determining whether an application is produced using the 6060 or the Quickmaster DI. By defining a limited set of specifications, PsPrint is able to shorten turn times and reduce inventories. And by targeting designers and other savvy users, complex applications can be handled with a maximum level of customer self-service-and little intervention on the part of PsPrint staff. The end result? Improved productivity and a reduced cost base for both PsPrint and its customers-and a profitable business model for PsPrint. PsPrint's Herzoff says, "Before we implemented this model, we were experiencing topline growth in the range of 16%, but bottomline growth was only at 2%. With our new streamlined Web-based process and the Quickmaster DI Plus direct imaging presses, we not only are seeing higher topline and bottomline gains, but we are positioned to scale the business dramatically. We are at five million impressions per month today-tomorrow, who knows?"