By Barbara Pellow September 27, 2006 -- B2C e-commerce went through some tough times, particularly after the technology-heavy NASDAQ crumbled in 2000. In the ensuing dotcom carnage, hundreds of e-commerce sites shut their virtual doors and some experts predicted years of struggle for online retail ventures. iPrint and ImageX were a few of the casualties in the graphic communications market. Since then, however, shoppers have continued to flock to the web in increasing numbers. In fact, North American consumers love e-commerce so much they spent $172 billion shopping online in 2005, up from $38.8 billion in 2000. And the future looks brighter: Forrester Research predicts that by 2010 consumers are expected to spend $329 billion each year online. What's more, the percentage of U.S. households shopping online is expected to grow from 39 percent this year to 48 percent in 2010. The question business owners need to ask themselves is, "How can I become a profitable leader in the market space I have chosen?" VistaPrint has proven that graphic communications firms can both survive and thrive in the Internet B2C space. It recently rose to number 58 in the Graphic Arts Monthly 101 and was the leader in growth with revenues up more than 55 percent to over $90 million. For fiscal year 2006 that ended in June, total company revenue increased 67 percent over 2005 . VistaPrint has served more than 7 million customers in over 120 countries around the world. The company is headquartered in Hamilton, Bermuda, and has offices in the U.S., Canada, Jamaica, The Netherlands, and now Spain. VistaPrint's 17 web sites are localized for languages and currencies: They include: Australia, Belgium, Canada, European Union, France, Germany, Ireland, Italy, Japan, The Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland, the United Kingdom and the United States. Janet Holian, Chief Marketing Officer discussed why VistaPrint has succeeded where others failed. VistaPrint exemplifies an organization that has developed a strong marketing plan and is focused on execution. They have effectively engaged in the following critical activities: * Analysis of customers and the business environment to identify the right target markets * Research of the specific opportunities to better and more profitably meet customer needs in the identified segments * Development of product and service offerings that meet customer needs * Effective assessment of market position and clear articulation of the unique value proposition * Selection of media to reach the target audience and build awareness to precondition prospects for salespeople A Well Identified Target Market and a Solid Value Proposition VistaPrint has been in existence since 1995, before, during and after the dot-com craze. From 1995 to 1999, VistaPrint was a small desktop publishing business that also sold specialty papers. VistaPrint launched its first true Internet application in 1999. Its vision and business model has not changed since that time. President and CEO Robert Keane said, "We are in a market where traditional printers don't compete. We are providing micro orders to the Small Office Home Office (SOHO) customer. Our competition is do-it-yourself printing. Our objective is to deliver quality, cost, speed and convenience so that we are the very best alternative in our chosen market." Vision and a Manufacturing Model to Match Thousands of responses to VistaPrint's customer surveys drive a product roadmap that looks out three years. Once the vision is well defined, the question business owners need to ask themselves is, "How can I become a profitable leader in the market space I have chosen?" Firms like VistaPrint answered that in a single word --technology. Historically, graphic design and custom printing have been hands-on, laborious processes for both the supplier and the customer. Inflated supplier costs resulted in high prices for the customer, especially for print jobs in very small quantities. VistaPrint's proprietary technologies fully automate not only the manufacturing of printing, but also the manner in which orders are created and submitted. The company handles its tremendous volume through the efficiency of its proprietary storefront and highly automated production system. VistaPrint holds 11 patents for its technology, with more than 40 pending in the United States and Europe. Jobs are ganged together based on the type of product and the paper stock selected. For example, in a given day, VistaPrint might have 1,000 orders for business cards on glossy stock. Those cards will be aggregated into groups and the digital files sent to the regional printing plant from which shipping will be most efficient. Through streamlined workflow, the firm incurs lower costs, which mean its customers enjoy lower prices for higher quality printing. The Value Proposition The company's value proposition is to provide consumers and small businesses with access to the most affordable high-quality, short-run, full-color graphic design and print services via the Internet. VistaPrint customers start an order by using one of the thousands of pre-defined templates or by uploading a design to the Web site. Users can modify color schemes and add images from VistaPrint's stock photo library. Using VistaStudio, the company's online creative tool, users can custom-design many types of print orders. Customer orders are taken and processed exclusively via the company's Web site and then sent to VistaPrint's own printing facility. Whether its customers need business cards, letterhead, or brochures for a small business, or 10 custom-printed invitations for a child's birthday party, VistaPrint focuses on the delivery of premium-quality products and services at an affordable price. Holian indicated that small business will continue to be VistaPrint's target market, but it has sub-segmented the market based on buying behaviors. Holian adjusts offers and promotional strategies for the following customer segments. 1. "True Business," ordering an array of business printed product including business cards, post cards, brochures, stamps, etc. Share of "wallet" is important with this group. 2. "Small Family Business" 3. "Strictly Consumer," where they order invitations and greeting card products 4. "Hobbyists and Freebies" where they strictly take advantage of special offers Designed with the Customer in Mind A product strategy involves figuring out what your customer wants and inventing or creating a product/service offering that will give it to him or her in a way that differentiates you from your competition. While product might appear to be the simplest of the 4 P's to define, graphic communications service providers are constantly trying to identify the right product/service mix for their customer base given the rapid advances in digital technology. VistaPrint's product development is driven by research, analytics and data. According to Holian, "We survey our customers to understand the products and services that have the most value to them. Annually we ask customers that have opted in to e-mail surveys what they want and get tens of thousands of responses. Those responses drive our product roadmap that looks out three years." Products like their self-inking stamps and full color envelopes were a direct result of customer input. Mastering the Art of Promotion Holian adds, "Marketing and special promotions are essential to VistaPrint. While the Internet is the most cost effective sales channel, we utilize a variety of media options. Our $20 million marketing budget is allocated between Internet advertising, print ads, direct mail and box inserts with partners like Amazon." To attract new customers, VistaPrint offers 250 free business cards on its storefront, for just the cost of shipping. Customers can choose from one of 20 card templates, which they can customize directly via the online interface. By default, "Business Cards are FREE at www.vistaprint.com" is printed the back of the free cards, so that each and every one serves as an advertisement for VistaPrint. If users want to receive cards without this promotional information, there is a $9.99 charge. When VistaPrint started, its primary offer was free business cards and it proved to be a very effective viral marketing approach. Viral marketing and viral advertising refer to marketing te chniques that seek to exploit pre-existing social networks to pr oduce exponential increases in brand awareness, through self-replicating viral processes, analogous to the spread of a computer virus. According to Holian, more than 2 billion business cards with, "Business Cards are FREE at www.vistaprint.com" are circulating in the marketplace. Holian stated, "It is critical to have the right offer strategy for consumers. We use a combination of discounts and free promotions to accelerate acceptance of new products." At DMA '05, VistaPrint offered 100 free postcards to show attendees. The promotion emphasized VistaPrint's high quality, full color regular size postcards that were completely customizable and free using a special link: For those that had a highly targeted marketing program or just wanted to try out VistaPrint's custom printed products, the promotion gave them access to VistaPrint's 5.5 X 4.2 postcards, hundreds of easy-to-customize templates and a library of 70,000 free images. For a small charge, companies could include their own logo or image or upload a complete design. And Then There's Loyalty VistaPrint is combining high quality, short-run color printing for customers and a product set designed to uniquely meet the needs of the B2C market. It has also included a lowest price guarantee and a total satisfaction guarantee. The result is a loyal customer base. Holian said, "More than 60 percent of our revenue is from repeat business." VistaPrint identified the customer groups that it can better serve than its target competitors and implemented a strategy to address unmet customer needs and maximize overall profitability. VistaPrint has identified the customer groups that it can better serve than its target competitors, and tailored product offerings, prices, distribution, promotional efforts, and services toward the B2C segment. Its strategy was clearly designed to address unmet customer needs and maximize overall profitability. Companies that want to see better results, sell more print products and value-added services, generate higher profits, or satisfy customers more thoroughly need to assess how they are approaching the market. After all, a marketing strategy involves analysis of customers, competitors, and the company's core competencies; combining this understanding into an overall perspective of what segments exist; a decision to target the most profitable segments; positioning your products; and then doing what's necessary to deliver on that positioning.