Commentary & Analysis
Hitting the Jackpot with Digital: Support Beyond the Box
By Tom Wetjen April 24,
By WhatTheyThink Staff
Published: April 24, 2006
By Tom Wetjen April 24, 2006 -- Today, many print providers are staking their futures on the opportunity to profit and grow with digital color printing services. But the opportunity requires much more than having the technology. Print providers now face difficult decisions about which new digital businesses to enter The opportunity is clear. By 2010, 21 percent of commercial printing revenues will likely come from digital printing, according to the National Association for Printing Leadership (NAPL), up from 7.4 percent today. As the industry transitions to what Xerox refers to as "The New Business of Printing," the traditional manufacturing business model and its commodity pricing are being complemented by digital-based services, which deliver higher value through faster turnarounds, personalization and integration with the Web. While the decision to acquire digital printing equipment seems obvious, justifying specific digital printing services isn’t always clear cut. Print providers now face difficult decisions about which new digital businesses to enter - be it short-run color printing, one-to-one direct mail or complex cross media programs - all of which require a fundamental change in how print providers market and sell their services to customers. For help with these critical decisions, many print providers turn to third parties, such as professional associations, consultants and vendors. These groups offer support for all phases of digital business, from operational issues to developing sales teams and marketing plans. Savvy print providers have experienced first hand the value these resources can bring in speeding up return on investment in digital technology. "We needed to break away from price per piece and use digital to enable us to help increase revenue for our clients" Take Graphics West, a Las Vegas commercial printer that recently placed its first bet on digital printing with a Xerox DocuColor 8000 digital press. The company, part of the Nationwide Graphics/Premier Print network of commercial print companies across the United States, added the machine to its offset arsenal to produce short-run, full-color jobs and to profit in new markets where it couldn’t before with offset printing. "We needed to break away from price per piece and use digital to enable us to help increase revenue for our clients," said Jere Ames-Johnson, president, Graphics West. Recognizing that its new focus on maintaining loyalty, increasing retention rates and obtaining response metrics for clients requires more than great technology, Graphics West turned to Xerox’s ProfitAccelerator collection for support. This portfolio is designed to offer tools a print provider needs to run a business (beyond technology) from assessing digital opportunities before investing to increasing revenues and profits after an acquisition. "You need support beyond the box. You can have the best production capabilities, but it’s the marketing and business support that is vital," said Ames-Johnson. Before Placing Your Bet Prior to installing its first digital press, Graphics West successfully used a tool called ProfitQuick to help assess its return on investment in digital technology. This includes a business planner, a "what-if" analysis tool for determining how much page volume is required to be profitable, and a workflow cost estimation and comparison tool. This helps a printer examine many of the critical issues involved with justifying equipment purchases and business development plans. Because it operates in a highly competitive marketplace, Graphics West also conducted an analysis of the local area to create a comprehensive marketing plan for the value-added solutions it can now offer clients. The company expects to grow its business with a core of local hospitality and gaming customers and to expand into such booming Las Vegas vertical markets like real estate and healthcare. "Las Vegas is very unique. A lot of companies wait until the last minute to ramp up marketing efforts, so it’s always a challenge to meet their needs," said Ames-Johnson. "The fast turnaround from digital printing will help us meet those challenges." "A lot of companies wait until the last minute to ramp up their marketing efforts. The fast turnaround from digital printing will help us meet those challenges." Ames-Johnson believes offering complementary print technology will help grow both parts of the business. For example, a hospitality/gaming prospect asked Graphics West to produce a job that combined static offset printing with customized, digitally produced materials. Rolling the Dice in Vertical Markets But reaching out to those vertical industries has required a new sales approach. "Traditionally, we've been selling ink on paper, but with digital printing we will now be selling value and solutions to help our clients," said Ames-Johnson. Graphics West used the Vertical Market Kit in ProfitAccelerator to help train its sales team on marketing to vertical customers. It provided simple primers about vertical market issues, source files to create variable-data samples for vertical markets, and customizable sales presentations featuring market-specific information that ensured salespeople were knowledgeable of the customer’s industry and printing process when they presented. This focus helped Graphics West secured a new casino client through the use of the variable-data samples and leveraging the casino’s "players’ club" database. The casino previously produced static "players’ club" mailers that typically received a one percent response rate. Graphics West indicated it could generate significantly higher ROI by producing the mailers digitally and customizing the content to each individual recipient - similar to the sample presented to the client. The casino rolled the dice with Graphics West, and the campaign was revamped to include weekly mailings with personalized messages such as birthday wishes and tailored offers such as coupons. The campaign was so successful that the casino not only increased gaming traffic, but also sold out the entire adjoining hotel as a result. "The more our gaming clients see the full scope of our new capabilities, the more they are clamoring to use personalization to market the casinos to their customers," "The more our gaming clients see the full scope of our new capabilities, the more they are clamoring to use personalization to market the casinos to their customers," said Ames-Johnson. "We knew once our clients and potential customers saw what our digital production capabilities could do for them, our new printer would pay for itself." Recurring business with the casino has significantly grown the company’s print volume. Winning with a Full House To further promote its new digital offerings, Graphics West planned and executed an open house at its facility. The event attracted more than 200 current and prospective customers and helped to extend their definition of what is now possible. Attendees at the open house were given passports on arrival. As they toured Graphics West they were given stamps at various solution stops ---the short-run area, variable-data area, etc.-- and customers were eligible for a prize based on the number of stamps they received. "The open house gave us an interesting and dynamic way to showcase our latest offerings and let our business shine," said Ames-Johnson. "The response we received was tremendous and paved the way for many subsequent sales calls." As a direct result of the open house, Graphics West received a few new variable-data jobs the following week. To survive and prosper in today’s competitive marketplace, print providers need to look beyond the technology. Graphics West’s use of business development resources is a great example of not letting it all ride on a press and changing the way you market and sell your services to profit and grow with digital color printing.