Commentary & Analysis
New CEO and a New Vision for Alphagraphics
By Barbara Pellow "
By WhatTheyThink Staff
Published: August 16, 2004
By Barbara Pellow "Printing firms that are growing rapidly have embraced the Web and leveraged it to reduce operational cost as well as expand customer reach." August 16, 2004 -- On August 4, I had the opportunity to participate in the Alphagraphics' Franchisee Conference in Salt Lake City. I saw a group of excited franchisees that felt the future was filled with promise. And AlphaGraphics' new CEO, Kevin Cushing, is looking forward to taking on the challenges faced by the printing industry. Before assuming the role of CEO, Cushing was a leading franchisee owner in Minnesota with store locations in downtown Minneapolis and Plymouth. His vision for Alphagraphics is a simple one. As a former storeowner and operator, Kevin understands the wants, needs and requirements of a franchisee and plans on translating those into the right corporate sponsored service levels that maintain Alphagraphics' market leadership. When asked why he took the job, Cushing was quick to respond, "I love our industry. I love our company and I love challenge. I am excited to play an important role in helping people realize the dream of leading, owning, supporting or being part of a successful business." The ultimate objective for Alphagraphics is to move every store to the next level in terms of both revenue and profitability. With Four51, print distributors, buyers, and suppliers communicate, collaborate, and transact with each other online--faster, more efficiently, and with fewer errors. During the conference, Cushing told franchisees,"Printers are no longer strictly in the printing business. They are now in the world of business communications. That means printing needs to be integrated with a value-added services portfolio." Avoiding commoditization of print requires a good digital infrastructure. Cushing acknowledged that Alphagraphics would support the franchisee in evolving digital services nationally and internationally. A special focus is being placed on the ability to interface with and serve customers over the Internet. Cushing indicated, "Printing firms that are growing rapidly have embraced the Web and leveraged it to reduce operational cost as well as expand customer reach." His mission is to develop both new known and not-yet-known products to expand Alphagraphics' business and become a market innovator. In discussing what this means for Alphagraphics owners, Cushing said, "It is an evolution with urgency. Many of the opportunities to add value to our clients can be done with existing capabilities and investments. It's using our capacities, equipment and people to make the needed evolution more swiftly." Extending reach As part of the evolution, Alphagraphics is focused on extending its reach with the Internet. There have been significant advances in Internet order entry and migration into e-commerce across the franchise network, but there is a strong desire is to continue to advance service levels even further. At the conference, Alphagraphics announced the formation of a new partnership with Four51 . With Four51, print distributors, buyers, and suppliers communicate, collaborate, and transact with each other online--faster, more efficiently, and with fewer errors. With Four51, print distributors, buyers, and suppliers communicate, collaborate, and transact with each other online--faster, more efficiently, and with fewer errors. It is an Internet driven Application Service Provider (ASP) solution to support print procurement, customization, distribution and supply chain management. The term Application Service Provider refers to third-party entities that manage and distribute software-based services and solutions to customers across a wide area network from a central data center. In essence, ASPs are a way for companies to outsource some or even all aspects of their information technology needs. The benefit of an ASP model to the Alphagraphics franchisee is that it distributes the cost of the IT infrastructure across multiple users providing an "ease of entry" offering as well as a limited requirement for technical support staff at each location. In making the partnership decision, Alphagraphics beta tested incremental functionality in the ASP model at 25 locations with outstanding results. The benefits varied by location and the feature set that was important to the ultimate customer. Mike Kennedy, franchise owner from Sacramento, California, has a major financial institution as a key account. Alphagraphics was offering the client online access to its on demand printing capability. The financial institution requested a new level of security and permission capability as well as comprehensive reporting functions. Customer requirements included inventory control, cost center allocation and usage assessment by product group. Mike evaluated the time and effort required to develop the capability internally and reached the realization it was both expensive and did not meet "time to market" needs for the client. The Sacramento Alphagraphics location concluded Four51 was elegant and simple to use. Because it was an ASP, the system also provided for rapid implementation. The bottom line for Alphagraphics Sacramento was increased business volume. Based on user satisfaction, accessibility and ease of use, customer volume has increased ten fold. The biggest problems facing digital color and variable data printing today don't have to do with the technology. The Minneapolis Alphagraphics location leveraged the variable data template capability of Four51 to expand its business. The Minneapolis location realized that the biggest problems facing digital color and variable data printing today don't have to do with the technology. The quality is good enough and the presses are fast enough. This site wanted to engage in Internet driven marketing programs with its customers that incent the customer base to use digital color programs again and again and again. Four51 offers simple to use templates that put marketing power in the hands of the dealership, agent, franchisee or remote sales rep to help them grow and expand their business with a more personalized message. Cost-Cutters was a key account for the AlphaGraphics in Minneapolis. The customer wanted the ability to customize call ahead cards, signs, service brochures, stationery and promotional themes by location. Alphagraphics leveraged Four51's template solution to achieve this objective. Four51 has integrated Pageflex Mpower™ variable data rendering technology into its e-commerce capability. The bottom line for the Minneapolis franchise was significant volume growth. "Our focus at Alphagraphics is on more than technology. The effectiveness of technology is only as good as our ability to implement it across the network." With the beta success, Alphagraphics decided to roll out Four51 across the franchise network. Kory Kogon, Alphagraphics Executive Vice President of Operations said, "Our focus at Alphagraphics is on more than technology. The effectiveness of technology is only as good as our ability to implement it across the network. The partnership with Four51 meant that Alphagraphics could do an outstanding job at giving the franchisee the right tools to get started." In partnership, they established an online resource center for the franchise network with tools including WebEx sessions, videos and sales guides to ensure effective implementation. Four51 President, Rich Landa agrees with Kogon. He said, "It is not just technology. Four51 has developed what we call a managed adoption process. There is technology at the foundation of every Four51 sale. But more importantly, there are services that need to be infused at certain points in time and tool sets that need to be leveraged (i.e., a resource center, business planning guides, planning guides) that support the successful implementation." Four51 works with users to monitor progress and to infuse services where needed. Beyond training and support tools, they will assign resources to make calls on key accounts to facilitate large sales opportunities. According to Kogon, "The franchisees and Alphagraphics understand the importance of value-added services, the Internet and--most importantly--our new relationship with Four51. You might ask how I know this. It's all in the results. In a single day this week, we had 25 locations sign up to participate in the service. Customers were asking for this type of service and the Internet link is helping the locations retain current customers and grow share of revenue as well as gain new customers." Cushing wrapped up his comments at the conference by telling attendees he was committed to supporting the franchise owners in expanding avenues for growth. He told attendees that they were the drivers of their businesses. While the franchisee is steering the car, Alphagraphics Corporate headquarters is providing the fuel for growth. AlphaGraphics has done an excellent job of identifying the highest growth business opportunity--Internet-Driven Marketing Programs--and the technical infrastructure and support required for success.