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Economics & Research Blog

Interrogating Dr. Joe

On Tuesday,

By Dr. Joe Webb
Published: April 2, 2009

On Tuesday, March 31, I had the pleasure of participating in a Xerox-hosted event called “Digital Goes Mainstream.” The panel discussion also included Howie Fenton of NAPL and Barry Yarkon of The Hammer Company (Parsippany, NJ), and was led by Gina Testa of Xerox.

Prior to the event, the panelists received some questions to get them in the frame of mind for the discussion. As usual, once things got going, the formal questions are gone, and the discussion leads to a variety of comments and questions of our own, still on topic, but lively and spontaneous.

The event was recorded, and it will be made available soon. I highly recommend it when it is.

I like to prepare formal answers to the questions because the process helps me get my thoughts together over a few days, and am pleased to present them here.

1. Lets start off today’s panel by talking a little about the opportunities and threats faced by printers today. Clearly, there is a fair bit of doom and gloom in today’s economic woes were the markets make it almost impossible to forecast… In fact, in a recent article published by SiriusPerspectives who surveyed marketing executives stated that their position on print spends in 2009 on B-to-B marketing would be reduced and in some case met with caution when spending money to produce brochures and direct mail printed campaigns…

Q. How important and more importantly what can a printing company do to combat these troubling trends?

A. You shouldn't fight it, you should help them implement it. The first rule of this media area is to admit that there are more media tools than ever before, that they are often better and more effective than print. You need to use these media yourself, personally, and in your business, and be confidently supplying access to these media formats through your services. You have to be as knowledgeable about the effectiveness of new media as you are with print, and the combination of them.

Here's a good example. Somewhere between one-third and one-half of e-mails, even opt-in e-mails, are blocked in some manner or sent to spam folders. Yet, there have been reports that e-mail lists supported and corrected with direct mail have non-delivery rates of only 2%. Making e-mail campaigns more effective a case for using print. E-mail orders have been shown to be 15 times more effective in terms of revenue per dollar spent than print. There's a good reason to invest in ways that make e-mail more effective.

2. In today's business climate we are being forced to make trade-offs in our business model albeit technology, reductions in labor… The question is…

Q. How important is it in 2009 for a print for pay provider to leverage opportunities with digital print as part of a new revenue stream?

A. We don't have the luxury of picking a single process as fulfilling hopes and dreams of profitability. A print process is actually a small tool in a larger strategy of getting information to a target audience. Digital printing poorly used is often digital printing for the sake of digital printing. It's all the work before the job gets to a digital output device that really matters. In our last survey, digital printers were just as harshly affected in the slowdown as all other printers. Marketing services provided no protection either. There is no magic approach, nor should we seek one.

The economic engine of the printing business is to create information in formats that others cannot do for themselves. In the past, we used to know what those tools would be. Now we're at a point where the true marketable life of printing equipment is much shorter than its physical production life. This is the biggest change.

As far as new revenue streams are concerned, too many of these are little accommodations and collections of billable tasks with no strategic vision. These new revenue streams need to have the potential of becoming standalone businesses.

3. In all industries of business there are leaders and laggards. Specifically in the print Industry, Andy Paparazzi of the NAPL and Ron Davis of the PIA, and I believe you Dr. Joe talk about the process that companies need to undertake to survive and transition into a leader…

Q. What does this mean… Every printer should invest in digital print today or should they have a better understanding of their own printing environment not to mention the customers before they expand the core?

A. An understanding of their own printing environment and that of their customers does nothing to transform a business. This industry will be vastly different coming out of this recession not because of its skill at printing or what printed materials would be needed by customers. To do so is to look at the future with the myopia of the past, and will produce the same subpar results it has in the past. In my book I suggest to start with a clean sheet of paper. There's no other way to do it. Design the business that will be effective in 2012 and 2015, not 2009 or 2010.

Q. And second, why is digital one of those mainstream expansion opportunities an important choice?

A. The real issue is what is the nature of the created content and what fits into the constantly changing and growing digital media marketplace where the iPhone is more important than an hard copy document. Digital printing has to be viewed as part of that digital media marketplace for it to be a real opportunity.

4. We often talk about “The New Business of Printing” and that is not an environment where digital print capabilities will replace those of offset but an environment where customers are communicating differently and within multiple mediums.

Q. Nonetheless, to move from a struggling to a thriving print or communication services company what are the key attributes you should consider in building a successful digital print business in 2009?

A. It starts with the owner and the executives. If they are insulated from digital media in their personal lives they will not see the opportunities where digital printing technologies fit into their clients needs. There are significant benefits in using new media technology in their own businesses to build experience and credibility.

It was interesting in our survey of a few weeks ago how many more printers have been using direct mail for their businesses. Yet when I ask if they are active in their local public relations associations, or marketing associations, they are not. There really is a need to develop competence in the media decision. It is no longer an issue of digital printing or offset anymore, because new print buyers are far less concerned about the print process as they are about reaching and exceeding their desired results for communicating in the first place.

I strongly recommend the book “New Rules for Marketing and PR” by David Meerman Scott. Make sure you get the latest softcover edition with new sections about social media.

5.Clearly having the right business model is key to the success of a printer as they enter into the digital print space.

Q. What and where have you seen the advantages of adding a digital printing service has and can be for a printing operation?

A. There are numerous ways of being successful in the printing business. There is not no one way. Any strategy has to be appropriate to the resources available, skill, knowledge, and interests of the people involved, and the target markets being sought, within the time horizon that is expected. This changes by region, by market, by application, and many other factors.

Adding a digital printing service has been important for many companies because it has been the first time that they have had to become true marketers. Digital printing business does not come to you, and is not affected by selling harder. Business has to be created and developed rather than proposed or bid. This is why many printers find that their offset business improves when they build their digital business. It's not just that they are calling on new prospects, it is that their business becomes more proactive in the communications process, so they attract other work, as well.

There were more questions... and they will be posted by Tuesday, and will also be linked in next week's newsletter.

Dr. Joe Webb is one of the graphic arts industry's best-known consultants, forecasters, and commentators. He is the director of WhatTheyThink's Economics and Research Center.



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