As it has become clear that the economic impact of the COVID-19 pandemic will be deeper and longer than many expected, printers have an important question to ask: What differentiates the companies that thrive during a recession and those that do not? The answer is no mystery. Whether it’s through research or anecdotal example, we consistently find that success comes to the proactive. This includes those who are willing to press forward with marketing, take calculated risks, and invest in innovation at a time when everyone else is pulling back.
This is a topic that has interested me recently as I’ve come across several print shops that have not just survived the COVID-19 pandemic, but grown. They haven’t just grown a little. They’ve grown a lot. I decided to do some investigation, and what I found, both in the research and in the many communications and non-communications industry examples, matched what I saw in the examples of these companies.
First, the research. Back in 2010, the Harvard Business Review (HBR) conducted an analysis of publicly traded corporations and how they fared before, during, and after three periods of global recession: the 1980 crisis (1980–1982), the 1990 slowdown (1990–1991), and the 2000 “bust” (2000–2002). HBR studied 4,700 public companies, looking at their performance over three periods of time: the three years before the recession, the years during the recession, and the three years after the recession.
The results were as follows:
- 17% of these companies did not survive the recession. They went bankrupt, were acquired, or went private.
- The survivors, even if they stayed in business, were “painfully slow to recover.” Even three years after the recession, about 80% had not regained their pre-recession levels of sales and profits.
- Only 9% of the companies actually grew during and after the recession. Not only did they get back to pre-recession levels, but they achieved even better metrics after the slowdown than before.
What distinguished the latter group? It wasn’t willingness to cut costs and hunker down more than their competitors. It was their willingness to do the opposite: press forward with their marketing, invest in their companies, and innovate. This not only helped this 9% weather the recession, but once the slowdown was over, it enabled them to come out ahead.
That’s exactly what I have seen in my printing industry examples. In this post, we’ll look at the first company, Rex Three. In the next post, we’ll look at two more.
The Thriving of Rex Three
Rex Three, a specialty printer based on Davie, Fla., is known for creating custom workflows for its clients. As the virus took hold, Rex Three anticipated the need to play a long game. Back in March, it started investing heavily in its pandemic response plan, with the goal of creating fully automated workflows that would allow the operation to continue at 100% even if its employees need to start working from home.
To support this plan, the company took a number of key steps. These included consolidating its server operations into a single location to increase speed, replacing its HD servers with SSD servers, increasing its bandwidth by 250%, and creating nearly 50 VPNs for all of its employees who might need to work remotely for some time.
Rex Three had already created fully touchless workflows—from prepress to finishing—for some of its clients. Starting in March, however, it worked closely with one of its vendor partners, HYBRID Software, to create touchless workflows for all of them, including those clients requiring multiple workflows to handle their varied portfolios of products.
In addition, Rex Three took on the challenge of co-packing. It was already doing a robust co-packing business, but with this “high touch” process being particularly impacted by social distancing requirements, the company saw another real opportunity. It reinvented in-house spaces (including adding mobile tables) to support fully socially distanced co-packing operations, rented additional space as necessary, and made other changes to comply with all COVID-19 guidelines. Now, its co-packing business has doubled. It is even handling products unrelated to printing.
As a result of its proactive strategy and willingness to invest, Rex Three’s revenues have rocketed. The company has added more than 100 employees since the start of the pandemic and has rented additional space to keep pace. Its growth has come from both existing clients and new clients whose printers (and co-packers) have been unable to meet their needs.
In part 2 of this series, I’ll take a look at two other companies, Continental Web Press and PostcardMania, whose strategies of “reinvent and innovate” have also enabled them to not only survive, but thrive and grow during the pandemic.