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Commentary & Analysis

VDP and W2P

Special Feature -

By WhatTheyThink Staff
Published: August 29, 2006

Special Feature - John Giles' Digital Directions VDP and W2P A New World of Opportunities for Smaller Shops By John Giles July 29, 2006 -- Printers are excited about variable data printing and web-to-print possibilities. VDP allows printers the opportunity to get in front of their customers' marketing departments and sell something with value. VDP isn't a commodity yet and printers can get higher margins for work that increases their customers' revenue. Web-to-print makes it easier for customers to order printing. It opens up a world of possibilities for an expanded customer base. While printers are excited about VDP and web-to-print, smaller commercial and quick printers are shocked by its cost. To produce many of the robust examples offered by equipment vendors, small printers would have to make too great an investment in equipment, software and personnel. Printers will sales under $1 million will find it hard to compete with larger printers going after the big VDP projects. VDP isn't a commodity yet and web-to-print makes it easier for customers to order printing. But smaller size shops don't have to stand on the sidelines and watch larger companies take all the business. There are resources and techniques that shops with limited resources can use to get a piece of the VDP pie. Many small commercial and quick printers have digital printers capable of producing VDP work. Throughput may be slow, but for short run work it is possible for the digital printers to offer viable VDP solutions to customers. Once printers hear a few success stories about VDP jobs produced on 12 to 30 page-per-minute color digital printers, other printers will follow and attempt to copy the feat. Real Options for Real Jobs Prices for most VDP software is out of the range of the typical job shop, but equipment manufacturers have bundled some software with limited VDP capabilities in many of the digital printer packages. But you can get more value with another approach. Printable Technologies is offering its Fusion Pro Desktop for $399. The company dropped the price from its original $4200 in an attempt to fuel interest in VDP and web-to-print in the industry. The company expects smaller printers to have success with the desktop version and migrate to their more expensive software solutions to meet increased customer demand. Smaller shops are buying Fusion Pro and learning how to produce and sell VDP work. Printers who have a good understanding of Microsoft Excel and database management should be able to easily use Fusion Pro and other similar software solutions. Most printers tend to think in terms of manufacturing rather than marketing. For the smaller print shop, real VDP success can come from partnering with others interested in this marketing tool. Most printers tend to think in terms of manufacturing rather than marketing. What is needed is someone with a marketing perspective who understands the value of VDP and can communicate that value to the client. Small printers can partner with small advertising and marketing companies to sell VDP projects. Letting the marketers take care of the sales and service with the printer taking care of the manufacturing is a quick way to get into VDP. Advertising and marketing companies are already selling to the marketing side of a company and know the right people to talk to about VDP. The printer will have to give up some profits to the agency people, but it gets the printer into VDP. But then, without the agency the new business would not come in the door. The Third Party Option Third-party VDP companies are starting to spring up to sell to the printing trade. A small printer can partner with one of these companies to expand their VDP capabilities. There are companies who will produce either the entire VDP project for a printer or handle some portion of the production. You can expect to see an increase in companies who will do the backroom database preparation for a printer and then provide the printer with a data print stream. The third-party VDP-for-the-trade companies allow a printer to move up from the small VDP jobs to larger VDP projects without having to make the big equipment and software investment. Small shops can even get third-party support on web-to-print projects. Many larger customers and clients are familiar with what web-to-print can do and are asking smaller print vendors to supply the same types of services. A number of companies, such as Four51.com, will provide complete web-to-print solutions. Other vendors, such as Wes-Tex business cards, will offer business-ordering packages to printers that are transparent to the customer. The customer thinks he is ordering directly from printer. Big printers using VDP are elephant hunting. But small businesses have similar needs that a small printer can handle. The big printers using VDP are elephant hunting. They are going after large corporations who have ad budgets that can pay for VDP services and who also understand the importance of web-to-print solutions. That still leaves a lot of small companies that would benefit from using VDP to sell services. As always, the small commercial and quick printer will be selling to small businesses. The small businesses have the need and they have the volume ordering levels a small printer can handle. Small printing companies shouldn't be afraid of VDP and web-to-print services. If a printer wants to explore these new services, they might want to: * Learn how to use the VDP and mail merge software packages that came with their digital printers. There isn't any need to go out and buy new software until you understand what you already have. * Learn Excel. You'll have to know about databases to work with VDP and Excel is one of the core programs you will use. * Partner with an ad agency or marketing firm. Many printers are already doing business with ad agencies and marketing firms so it shouldn't be hard to find one who has clients interested in VDP and web-to-print ordering. VDP projects require marketing savvy that most printers don't have. The creative types will be a major assess. * Develop other trade partners. Printers don't have to do everything in house. There are a number of companies who sell VDP and web-to-print services to printing companies. They handle a large portion of the technical issues. The cost may look high at first blush, but the return on investment usually makes it profitable. * Look at special web-based services such as personal URLs or PURLs. These special interactive web sites can capture information about customers as well as promote specific products and services. While not a printed product, PURLs offer a service that can be integrated into a VDP project or web-to-print service that adds both value and profit. * Learn about commercially available databases and mailing lists. VDP experts report few clients can provide good clean databases. A printer who can help a custom find a good relevant database will add success to the mailing program and value to the job. * Sell your intelligence. You may not have all the equipment and software to produce a VDP job, but can have the idea. That idea is worth money. Knowing where to get the database is worth money. Knowing how to get the job produced its worth money. Just because you don't actually have the VDP equipment doesn't mean the VDP project isn't going to be successful for the client. Make sure that the value of what you bring to the table is covered in the selling price. There is a learning curve for VDP and web-to-print solutions. You don't just flip a switch and it works. These advanced services will make a printer different from the printers selling commodity-types of work. Your biggest investment will be in the time it takes to learn about the services and how to sell them. Getting the work produced is the least of your worries. For small printers wanting to remain competitive, the time to begin learning about these new services is now.



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