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Dr. Joe Answers Xerox' Panel Discussion Questions

At almost every trade show it seems I end up on a panel for Xerox,

By Dr. Joe Webb
Published: October 2, 2010

At almost every trade show it seems I end up on a panel for Xerox, and this Monday at Graph Expo will be the same. Prior to the event, I receive a series of questions that are likely to be asked in one way or another at the event. The exact questions are never asked, but they do set the tone for the discussion. To prepare, I find it helpful to organize my thoughts by composing answers even though notes are not allowed at the session. I've always posted these answers as a blogpost or a column... here they are. Enjoy! Q. What do you see as the top 3 issues printing companies are currently having today? A. I don't know if there are three; they vary by size of business so each size would rank them differently or have one or two that the others would not have. Primarily, there is concern about decrease in the demand for print, there is always the concern about productivity, and staffing issues are part of each of those. There was a time when sales could be improved by selling harder, and that was, depending on the company, the right answer. The environment now is considered to be far more confusing. Selling harder doesn't work the way it did. Now they wonder if they have the right sales people, the right production people, the right management. That uneasiness is the backdrop for virtually all of the issues that one can think of. Q. Becoming an expert in printing communications today is more than putting ink or even toner down on paper, what actions can a printer take to differentiate their value prop? A. There remains a sense in many printers that the equipment they own differentiates their business. From a financial and production perspective, it does. That does little to dig into why people print, and especially why one printer should be selected over another. The knowledge and ability to discuss communications alternatives and how they can be integrated in a strategic manner, whether the client is a microbusiness or a sole practitioner service business, or a major corporation, is greatly respected by decision-makers. Q. Would you say that most commercial printers in the market today are now digital print believers? Why? Why not? A. Yes, they are digital print believers. Part of it is the allure of doing something, anything, that might be better, but they also see printers doing some very interesting work and being profitable. It's not “bleeding edge” anymore. One thing that concerns me, though, is that some printers think that digital printing somehow inoculates them from the effects of new media and new technologies, such as the iPad, and the continually increasing capabilities of smartphones and other technologies. I really worry about that. Q. What do you think is on the mind of the “new-to-digital” print-for-pay company as they walk the GraphExpo floor? A. They were probably surprised to see Xerox and HP at the front entrance, spots usually reserved for “traditional” suppliers. It's really funny, because about 30 years ago, there was an effort to exclude Xerox from some associations because they really weren't in the printing industry. Xerox made office products, so how could they be in the printing industry? So this is quite funny from that perspective. I would expect the “new-to-digital” print-for-pay to be totally bewildered by the range of options and have a tough time making a decision. For many of them, the main selling point will be the kind of support they get to develop their businesses and grow their volume. We're past the point of suspicion about whether or not the digital print business is real, but every owner wonders if they'll be able to make it profitable in their specific business with their customers. Q. How would you advise a new-to-digital printer to ensure their business plan success? A. It's critical to be active in trade associations, workgroups, peer groups, and other ways of finding out what's working and how the market is changing, especially in the first year of ownership. New owners have so many aspects of their business swirling around at once that avoiding mistakes that others have made would be a great benefit. Q. What would you tell a commercial printer who has digital print capabilities yet is struggling to grow his business? A. Take a step back, get a blank sheet of paper. Get some advice from some of the resources I mentioned before. Many times the original assumptions and expectations about the equipment and its implementation were made at a time when the marketplace was different than it is today, and those original implementation plans are no longer valid. Unfortunately, the original plan is still being followed. There are many problems that create undesired situations, but the clean sheet of paper helps in determining if the right resources are being deployed, or even if they are available. Q. How are social networking sites like Facebook, Twitter, YouTube and LinkedIn being used, if at all, by the companies you are working with? Are they seeing a real ROI from these efforts? A. There are people who have the structured plans and diligence to make these channels work for them. Others seem to expect some kind of magical event to occur. Social media is not like printing. To oversimplify printing, you create a concept, make a design, print it, send it to an audience, and then make some followup effort. Social media requires constant engagement with the marketplace. It is not for lead generation, even though some leads may come of it. Think of it as combinations of a 24/7 user group, a community of users and interested parties, that will have an intensified word-of-mouth experience, no matter where it leads. It requires diligence and a plan, especially a plan for wise repetition. A billboard can be the same for months. A Tweet lasts for minutes before it gets pushed aside by other Tweets. The short answer is “yes,” but the ROI measurement can only be done after aggressively using these for about 18 months. Q. How important would it be for a printing company small or large to move towards an automated workflow environment across the entire print site? A. This has been a need for decades, and it's more urgent now as printers expand to other media. The systems need to vary in scope and size depending on the nature of the business, the target audiences, clients, and other factors. For about 20 years, the inflation-adjusted shipments per employee has grown by less than 1% per year, and it's actually closer to half of 2%. This means that there needs to be more economic productivity. We've been very good at production productivity such as sheets per hour, but that never takes into account the nature of market prices and the kinds of products being offered. Since print prices are being held down by competition from other media, we really do need a revolution in the production engine of general printing businesses to radically change the nature of the costs we create for ourselves. Q. What are some of the key technology innovations a printing company should look into in 2011/12? A. Technology is rarely the answer to the the primary question “what business are we really in?” From there, many of the answers about the innovations to consider become more obvious. But there is something that needs to be addressed as part of this answer. Most print businesses look at the technologies that they can use to build their sales and give them the highest priority. This is one of the reasons why workflow systems and MIS systems get less attention than they deserve. Printers will say something like “a new MIS system won't help me find a new customer” or something like that. So we end up with a situation where they have very efficient and enviable production capabilities, and then their inefficiencies in administration and management just overwhelm all of the benefits that they created for themselves. Capital equipment is probably easier to finance because the ROI might be more obvious, but an MIS system that improves everything but does not create new products to be sold has a harder ROI to identify. Q. Going into 2011, any advice on what a printer can do whether they are a Commercial Printer, Quick or Franchise Printer, or even an Internet/Web printer? A. Buy an iPad. Buy a Kindle. Buy an iPhone. Use them. Create a sense of what these products lead to in terms of business opportunities, and how you can get involved in them now. By 2020, computers are likely to be 30x faster than they are today, more than 100 million US citizens will have been born after the Internet came to consumer attention, and broadband speeds will be anywere from 3x to 6x faster than they are today, and possibly more. This is the marketplace we're headed to, so confronting the nature of the printer's business, note that I did not say print, and I did not say printing business, should be started now. The focus has to be on the nature of the current printer as an entrepreneur, because those skills are absolutely essential. Q. Have you seen initiatives like sustainability take a back seat with the economic downturn? A. There is still a sentiment that avoiding print is the best solution to overall sustainability. I have heard of printers who are really in touch with their customers saying that the possible additional costs of sustainability-focused jobs discourages those jobs from being produced once clients get a sense of what they would need to pay. There are two really important points. I believe that even though a convincing case can be made that digital media are less “sustainable” than printed media, that the argument is not effective because the convenience of digital media are so compelling. The main benefit of digital media are that they can be used anywhere, and physical location matters little, if at all. Convenience trumps something nebulous like sustainability. You don't need certifications to prove something is convenient. You have to jump through hoops to prove that print is sustainable. The savings from digital media are immediate, and many times the decision-makers about media are not there long enough to receive credit or scorn for their decisions. It's not even a fair comparison between convenience and sustainability, but information users are making that decision every day, fair or not. The second point is that sustainability is not in the back seat, it's the chassis. It is no longer a point of differentiation in many segments. When buyers have every printer coming to them and discussing their sustainability procedures and practices, then it is no longer a differentiating factor from a marketing perspective. It's a necessity to be in the game. Some businesses do it better than others, but it's rarely a deciding point unless it is a unique circumstance. Q. Can a printer who invests in sustainable measures now benefit revenue-wise from doing so in 2011/12? A. Benefit “revenue-wise”? It's a minimal requirement, if not officially, from a practical standpoint it is believed to be necessary. Because it's a minimal requirement, it's not something that will drive revenues higher all by itself. # # #

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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