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Commentary & Analysis

"Added Value" (Marketing) vs. "Value Added" (Accounting)

By Terry Nagi April 26,

By WhatTheyThink Staff
Published: April 26, 2004

By Terry Nagi April 26, 2004 -- Most printers today strive for a high "value-added". This concept stresses the importance of maintaining a high inside labor content to any and all sales, reducing outside purchases to a minimum. Commercial sheetfed printers often shoot for a value added (sales minus outside purchases) of approximately 65 percent. Web printers normally seek a value added of 55 to 60 percent. The objective is to produce as much in-house as possible. "Added Value" the concept of "added-value" should co-exist with "value-added". The "value-added" concept still holds validity for traditional print production. Unfortunately the world of digital is upon us and an ever increasing number of print buyers seek a single resource to handle both traditional and digital input, printing, and output needs. Thus, the concept of "added-value" should co-exist with "value-added". The "added-value" concept is based on a small commercial or quick printer providing an ever-increasing variety of traditional and digital prepress, print and output services. It means creating a list of all possible such services current and future clients may desire, and slowly but continually adding one or more new service features per year. Our list of possible services to add include: Creative Assistance Creative Presentations Communications Consulting Database Creation, Updates, Management Digital Photography Digital Clip Art Digital Consulting Digital Asset Management Digital Retouching Digital Training Image Databasing & Distribution List Generation List Management Scanning Web Site Development Web Site Hosting Web to Print Development Intranet Development Intranet Hosting Internet or Intranet Training Short Run Color Copying High Speed Color Copying High Speed High Volume Single Color Copying Personalization of Individual Printed Pieces Archiving of Digital Files CD-ROM Authoring and reproduction Traditional Printing Bindery & Finishing Services Mailing Warehousing Fulfillment Kiting Customer Response Center High Speed Digital Transmission Connections Large Format Ink Jet Digital Printing Display & Graphics Signage for POP & Trade Shows Short Run Digital Printing As technology continues to advance as quickly as it has in changing the way we communicate, additions to the possible list of services can be made almost monthly. Few printers will want to add all of these services over a period of time, but most if not all printers will add some of these services, just as today almost all printers are thoroughly into desktop. Why & How? In the long term, clients will simply demand it. Many of these services may not have a high demand now, but as the digital revolution in communications and information continues, buyers will seek a single source to assist them in creating efficiencies for using text and graphics in traditional print and digital outputs. The how is "added value" and in partnering with outside vendors who will provide the service selected. In almost all cases, printers will not find initial volumes to develop the service internally themselves. The preferred alternative is to find a worthy vendor who is already into the service, check their references and capabilities, and develop a partnership relationship where each party acts as if they were an internal resource, and jointly promote both the printers and service providers' capabilities to both clients/prospects. Surveying Customers A great way to begin this process is to complete a direct mail survey of a printer's clients and prime prospects. This mailed survey can be as simple as a one-page letter of introduction to all current customers and prospects plus a one-page survey. This survey can contain a single question: "Which of these processes, products or services do you buy currently or will you buy in the future?". This would be followed by a listing of all possible services similar to that listed above. A column would be provided for "buy now" and one for "will buy in the future". Additional questions could include, "What other products, processes and services would it be valuable for your printer to provide?" And, "Are you seeking a single integrated supplier of print and these services?" For quick or small commercial printers with walk-in traffic, this survey could be completed when the client submits or picks up their job. It could also be included in any estimates sent to clients or job confirmations. For printers with sales representatives, almost all customers and prospects could be visited in a single month and have the survey completed by the salespersons. Many customers will not have the foggiest idea of what they really need in the future. At the same time, those who have needs will be the first target for the service they indicated and the printer selected. In addition, working with a partner potentially opens new print opportunities for the printer. It is recommended a single service be added at a time. It should then be marketed via a direct mail announcement, sold by sales persons and perfected before moving on to the next service. Over a period of 2 to 3 years, even the most traditional commercial printer can created "added value" in an additional 10 to 15 new services. "Value-Added" vs. "Added-Value" "Added-value" flies in the face of "value-added". "Added-value" simply says find partners on the outside who can provide non-traditional print and digital services. Every time this happens a printer's "value-added" will drop. So what? At the same time, customer loyalty will be increasing. Additional profits will be earned from partnership selling. "Value-added" dollars may be down, but total profits will most likely be up with a better chance for long term continuing success. "Value-added" can still be calculated for traditional print production. It should not stand in the way of an instant or small commercial printer providing a plethora of new processes and services to become a stronger single resource for its main clients and prospects.



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