U.S. commercial printing companies are rapidly moving beyond ink on paper to offer a broader array of services. Recent research by NAPL suggests that over half of all printing companies now offer art, design, and creative services, fulfillment services, or mailing services. Other research by NAPL indicates that printers expect the share of total company revenues generated by value added services to rise from 7.8 percent in 2002 to 14.5 percent in 2007.

The motivation for all this diversification is, of course, increased revenue growth and improved profitability. But, offering new services and actually earning an attractive profit from those services are two very different things. Fully 75 percent of all recent business diversification efforts have failed to produce the expected financial benefits. And, average printing industry profits have not shown any significant improvement even though many printers have been offering value added services now for several years. Clearly, therefore, diversification is no guarantee of improved financial performance.

During the past several years, we have worked with numerous printing companies that were involved in diversification. We've seen what works and what doesn't work; we've observed both successful forays into value added services and those that were not so successful. Through these experiences, we have learned what it takes to succeed with value added services, and we have described those critical success factors in our new book, Making Value Added Services Work. This comprehensive reference guide lays out a six-step process that we call the Making VAS Work Program. In this article, we will provide a brief overview of the first three steps of that program.