By Heidi Tolliver-Nigro, The Industry Measure  Analyst

Today, more than half of graphic arts firms offer some kind of digital printing, whether black-and-white or color. Although many merely offer digital output as a best-cost option for short-run production, others are moving their businesses in the direction of marketing services. Either way, their equipment and business support needs are quite different from those of commercial printers at large.

As the percentage of the industry's production equipment goes increasingly digital, this means that vendors' need to understand the unique needs, challenges, and perspectives of digital printers grows with it.

According to our Fall 2006 survey, 32% of printers plan to purchase some kind of printing equipment in the next 12 months, whether offset or digital. Those planning to purchase a sheetfed press were nearly evenly split on whether the purchase would be used to add or replace existing capacity. If, on the other hand, respondents were planning to purchase a digital color press, they were twice as likely to be adding capacity as replacing it.

The high percentage of "adding capacity" numbers is good news for vendors to the digital printing marketplace. However, for the market to really bloom the way it has the potential to do, digital printers need to do more than merely offer digital print. They have to offer it profitably, it is here that vendors need to have a very discerning eye (or is it an ear?).

While the industry talks a good game about changing business models, adding value-added services, and making other changes intended to boost profitability, our data continue to show that the industry needs for little less talk and a lot more action.

A Little Less Talk, a Lot More Action

In "Digital Printing 2007: A Vendor's Perspective," we compared the sales opportunities, business challenges, and planned investments of digital printers to those of the industry overall. We found an alarming disconnect between what digital printers know needs to be done and what they need to do in order to actually get them there. Actually, the word "disconnect" doesn't properly convey the scope of the problem. How about "gaping chasm"? 

Here are just two examples:


45% of digital printers cite "growing sales/getting new business" as a top business challenge for their firms. Yet, only 12% cited "capabilities of our marketing/business development personnel" as a top business challenge. Do these shops already have such fabulous business development experts that this challenge has been overcome? We don't think so.
38% cite "selling programs rather than one-off jobs" as a top sales opportunity. Yet, only 6% — yes, 6% — cite "changes in sales compensation models to reflect program selling/business development rather than traditional sales" this way. How are you going to implement program sales without a strategy for compensating salespeople for long-term customer relationship development?


It is no wonder that some of the biggest differentials between the business challenges of digital printers and the industry overall are seen in challenges such as "financial costs of our equipment," "finding capital for future investments," and "equipment that goes out of date too quickly." Digital printers know they need to invest in additional or replacement capacity, but they have legitimate concerns that they'll be able to pay for it. In fact, the percentage of digital printers citing these as top business challenges is double the percentage of graphic arts firms overall.

The takeaway point here? Vendors, don't gauge the savviness of your customer or prospect base by their ability to use the buzzwords on cue. In our sales opportunities questions, respondents say all the right things, too. But when it comes to their business challenges and planned investments, we see something else entirely. So before you assume your customers or prospects are prepared to take possession of an expensive piece of new hardware or software, ask a few more questions. Delve a little deeper. Make sure that those who seem prepared actually are.

For more information on "Digital Printing 2007: A Vendor's Perspective," visit www.theindustrymeasure.com.