Commentary & Analysis
Why the Post-Recession Printing Business will Be Quite Different
By Dr. Joe Webb
Published: April 29, 2009
Believe it or not there are still print executives who think business is slow because the economy is slow. They ask "when will the economy get better so things can get back to normal?" Normal? Lately, "normal" has been pretty bad. I'd like to go back to the printing industry of 1997 and freeze it; or that of 1987 or 1988! Readers of these notes and my columns have a leg up on knowing that things will be quite different.
The main reason is that technological changes keep going, and they are often encouraged by slow times as information creators, disseminators, and users search for costs and methods that match their increasingly scarce resources of time and cash. Time becomes more scarce because companies downsize (10 employees at 40 hours a week is 400 hours; 8 employees is 320; just because there are 80 hours left does not mean that the same corporate functions disappear). This is one of the main reasons why printers can find some upside in outsourcing logistics (inventory & fulfillment) and deployment (mailing, e-mail services), and digital media (video, podcasts, and others).
Since the post-recession industry will be different than the industry was going into it, printers have to change their costs. This is not a hunkering down process, but a recognition that costs reflect the investment printers have made to offer certain services that were needed prior to the recession. Changing costs does not mean doing less, changing costs means making different investments targeted to what will be needed a year and three years from now. This is why investment should be as constant as possible, about the same amount in good and bad times. If it's not, printing companies often make big investments before slowdowns and miss business upturns. You want to hit upturns with the best costs possible, just as much as you want to go into downturns with the best costs possible. The information marketplace doesn't wait for printers to have new equipment or services.
This week, the University of Southern California Annenberg School's Center for the Digital Future issued their 2009 report about Internet use (PDF Link). Here are some highlights:
The percentage of Americans who use the Internet has reached 80%
- 40% of those age 66+ go online, an increase from 29% in 2000
- The time Internet users spend online has grown in each year of the studies, and is now 17+ hours per week
- Light users spend an average of 2.8 hours per week online
- Heavy users who average 42 hours a week online
- 24% of American households have at least three computers
- The percentage of households with no computers continues to decline; only 15% do not have a computer
- Broadband is by far the dominant form of online service at home, nearly 80% of Internet users, more than double the level of five years ago, and eight times the percentage in 2000
- Access to the Internet by phone modem has dropped to 16%
- Two-thirds of home Internet users keep their broadband connection turned on most of the time while they are at home; only 20% percent do not
Just think of what these data will look like two years from now. What do printing entrepreneurs need to do to benefit from these trends rather than cowering in a corner having hunkered down hoping the 2005 printing industry comes back in 2010?
I use two trite sayings when I'm making presentations, and they get a good chuckle. The first is "ignore your competitors and stay ahead of your customers." This is the essence of marketing and the purpose of strategic planning. By staying ahead of your customers, you automatically stay ahead of your competitors.
The second one is "when business is good, everyone looks like a genius; when business is bad, you have to be one." This one has to be amended. When business is bad you have to be a genius entrepreneur. This does not mean you have to be a genius intellectual, you just need to be insightful. It often means that you have to become a master of the obvious, seeing things that are right in front of you that others are myopic about. It's not easy, but it's what print businesses need now. Are we up to the task?
Dr. Joe Webb is one of the graphic arts industry's best-known consultants, forecasters, and commentators. He is the director of WhatTheyThink.com's Economics and Research Center.
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That may be the truest piece I have read concerning the market as it stands.
Straight talk from Dr Joe, as usual.
My two cents.
Look closely at your company's DNA. On the blablabla level it's "to thine own self be true." On a more practical level, look at your book of business. Then look at it again.
The best way to know who are is to see what you've done. The best way to see what you've done is to see what kind of customers you've attracted and kept.
If you are a trade shop with retail customers it's not the time to decide to be a "market service solution provider." It's time to maniacally focus on being the highest quality lowest cost manufacturer you can be. Note that highest quality doesn't mean the quality of printed piece. It means the quality of your customer service.
Since the tech is so good, almost all printing is now good enough. But it's still true that the overwhelming number of printers I've dealt with take forever to answer the phone and get back with needed information. Since I can get most of the info I need from websites, why should I wait?
If you're not a long standing client or have a big company name on your business card, it's much worse. Anybody ever try to get a price from one of the globals? Meanwhile, the real growth market is small and micro business.
So . . . my story is don't stress about the internet.And stop trying to be something you aren't already. Just keep a maniacal focus on being the best of what you are. Don't get distracted. And answer the phone on the second ring. No voice mail. No "I'll get back to you."
As Dr Joe has been pointing out for years, the internet means just means the easy pickings are over and won't come around the same way again. But, TV was supposed to destroy the movies. And dot.coms were supposed to destroy bricks and mortars. Ask Walmart and Staples how that worked out.
Media is not a zero sum game. The rules for media is the more the more. Sooner or later every high quality low cost producer will find their niche.
Can anyone give me a few examples of what they've done to batten down the hatches and keep lean through this recession?
Thanks.
Lorne
Thanks Michael J for affirming what has been the biggest truism ever ignored.. Make every customer experience unique and rewarding for everyone. Our business is a commodity, but our service delivery justifies the price we charge!
Well said!
Thanks John,
But people like to pay for service. All they want is to have a pleasant day and no hassle transactions. And to work with nice people. If you're selling computer chips - commodity - or life insurance - another commodity.
Check out the customer service in any Apple store, it tells you exactly what nice looks like.
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