• Reframing your product portfolio by shifting the focus to the value that it delivers can bring you freedom from price wars.
• High-growth PSPs are setting themselves apart by placing a greater focus on web-to-print, CMYK+, print management, and wide format display installation services.
• Non-print-related value-added services (e.g., marketing services, data services, and graphic design) are key to growth because they enable PSPs to differentiate themselves while also becoming more of a one-stop shop.

By Eve Padula

Introduction

All print service providers (PSPs) are not created equal! Whereas leading PSPs are enjoying growth in revenue and profits, others are struggling to keep their doors open—particularly in today’s uncertain climate. As the capabilities of competitive providers continue to blur, customers are finding it increasingly difficult to distinguish one press from another, or even one PSP from another. Consequently, price is often the deciding factor and the services within the industry are frequently viewed as commodities. Keypoint Intelligence – InfoTrends’ research confirms that thriving PSPs behave in markedly different ways than their struggling counterparts do. One clear distinction is that leading PSPs place a much stronger emphasis on value-added services. This analysis discusses the importance of highlighting the benefits that customers and prospects can enjoy from value-added services.

The Value-Add Advantage

In effort to achieve desired profit levels and ongoing revenue growth, PSPs have historically focused on identifying the most efficient way to print their customers’ jobs. Although this is certainly a very sound practice, some of our industry’s leaders are finding that shifting their focus to value-added services is another great strategy for growth.

Reframing your product portfolio by shifting the focus to the value that it delivers can bring you freedom from price wars. Instead of seeking opportunities to reduce fixed costs or price-matching your competitors to maintain margins, you can attract new customers and retain existing ones by setting a new standard and consistently delivering added value. InfoTrends’ research confirms that high-growth PSPs consistently achieved a higher profit margin for the services that they offered.

High-Growth PSPs Achieve Higher Profit Margins

Base: PSP Respondents who offer these services to clients
Source: Winning in an Evolving Print Services Market, Keypoint Intelligence - InfoTrends 2018

Within the printing industry, value-added services can be broadly classified into two categories: print-related value-added services and non-print-related value-added services. Whereas non-print-related services are ancillary to print but not directly related (e.g., finishing, design, photography), print-related value-added services are often vital to the delivery of a print order.

The question is this—if almost every print environment offers these print-related services, how can they be considered an added value for the customer? Ultimately, the value comes in the form of a lasting impression. For example, think about the last time someone handed you a business card that really got your attention. What was it that caught your eye? Did the card have rounded corners, a unique coating, or gold/silver embellishments? These details stand out because they are remembered.

The table below outlines the share of PSPs who currently offer various types of print-related value-added services. Offerings like bindery, personalization, mailing, and fulfillment are quite common among all types of PSPs and can therefore be considered “table stakes” for competing in the industry. Meanwhile, high-growth PSPs are setting themselves apart by placing a greater focus on web-to-print, CMYK+, print management, and wide-format display installation services.

Print-Related Value-Added Services

Although print-related value-added services are quite common among PSPs, many may not think to offer non-print-related value-added services like marketing services, data services, and graphic design. These non-print-related value-added services are key to future growth because they enable PSPs to differentiate themselves while also becoming more of a one-stop shop.

The Bottom Line

Focusing on value-added services may be more important now than it has ever been before—especially as we navigate through the COVID-19 outbreak. Organizations that do not make value-added services a focal point may find it increasingly difficult to grow their revenues and align their value to their clients’ ever-changing business needs. Although course-correcting and taking a new approach will likely seem daunting, many of today’s top-performing PSPs have discovered that value-added services can be a primary driver for growth. All PSPs are working to keep their offerings fresh and current, and value-added services represent a great way to change the conversation and shift the focus away from price.

Eve Padula is a Senior Editor/Writer for Keypoint Intelligence – InfoTrends’ Production Services with a focus on Business Development Strategies, Customer Communications, and Wide Format. She is responsible for creating and distributing many types of InfoTrends content, including forecasts, industry analysis, and research/multi-client studies. She also manages the writing and editing cycles for many types of deliverables.