Last year I was asked to present at an event that posed the question, how does your print business need to evolve in order to be thriving in the year 2020? After a lot of consideration and research, I landed on three words that I feel represent major changes to the way most print businesses operate today.
Diversified, online, and data-driven.
This is the first of a three-part article; in this article I will cover the idea of diversification.
Print as a communication medium now competes with powerful digital alternatives. Print as a marketing communication medium will never be the dominate player it was before the advent of the internet. Product and service diversification is required to remain relevant in this new landscape.
Diversification can mean many things; the word is most often associated with investment portfolios. The sound reasoning of spreading your investments out so when one investment class dips you are “protected” by investments across many investment classes (e.g. stocks vs. bonds).
The diversity of a business follows similar logic, nobody feels comfortable when a single customer represents a significant portion of their revenue stream. The same can be said about your products and services mix, if a significant portion of your revenue is coming from one product class, you have no “protection” if that product class bottoms out. When I talk about product classes in print, I want to specifically avoid a print manufacturing mindset. As printers we might think of a product class as offset, digital, or wide-format, those are manufacturing processes. Product class, for our purposes is the business objective your customer is trying to achieve using your products and services. If you’re a label printer, your primary product class is “cost-of-goods” your product actually gets “consumed” as part of the product purchase. For many decades, print was a primary medium of choice for customers to market their business. When you looked at the business objectives behind most printed products, many of them served the purpose of “marketing” (e.g. flyers, brochures, datasheets, etc.)
Most commercial printers find themselves with a product mix today that is still heavily invested in print for the purposes of marketing their customer’s businesses. This is the portion of the print industry that is taking the biggest hit from powerful digital alternatives. E-mail is incredibly cheap, track-able, and easy to deploy. Google and the social networks are making it brilliantly simply to advertise on their platforms. With all digital alternatives, the ability to precisely measure the effectiveness of your marketing efforts is an obvious advantage over print.
What is your current product and services mix based on product class (the business results your customers are seeking from the use of your services)? Most printers can’t immediately answer that question because they think about their business from a manufacturing standpoint. Printers can tell me the breakdown between digital, offset, and wide-format, but they can’t tell me the breakdown between transactional, compliance, product cost of goods (e.g. labels/packaging), marketing/promotion, directional signage, or education to name a few reasons why your customers might be printing with you. In order to really understand your business in today’s competitive environment, you have to understand what your customers are trying to achieve with your products and services.
If you’re in the business of helping customers market their business, then diversification means you have to expand your product offerings beyond the medium of print in order to be thriving in 2020. Marketing budgets are moving from print to their digital alternatives (e.g. online display ads, search engine marketing, e-mail, and social).
So we came up with this industry term, “marketing service provider” to name where you want to end up. Yet, we failed to see where you were starting from and the steps required for you to evolve from a manufacturing focused business (very internally focused) to a sales and solution business (very externally focused). Being an excellent print manufacturer does not set you up to be an excellent marketing services provider – they are in fact very different skills as well as mindsets. During the decades when print was dominate; the market needed lots of great print manufacturers. Now that print is one of many alternatives, the market wants externally facing businesses that are focused more on their customer’s business than their own.
Most printers are internally focused, most print software tools that are sold to printers are focused on what printers want – more tools to make the printers business easier. This is why most web-to-print solutions have way more functionality on the backend (order management, imposition, routing, etc.) than the front-end (SEO optimization, product ratings, and engagement). Web-to-print is not for you, web-to-print is for your customer, yet we continue to buy web-to-print solutions based on what they will do for the printer rather than the printer’s customers.
Most of the industry talk about becoming a marketing service provider jumps to the tactics of e-mail campaigns or QR codes that send users to landing pages. When I think about “marketing services” the only thing that comes to mind for a printer is getting out of their business and getting into the business of your customers. This requires a whole different mindset and for most printers an intimidating learning curve. I recently spoke at Dscoop X, the annual HP users conference with Valerie DiCarlo, a new member of our team who specializes in search engine optimization and marketing. She is not from the print industry, from the priceless view of an outsider she said to me, “I’ve never been to a business event of this size that talked so little about how to help their customers succeed online.” We are stuck on the production floor, not because it’s where our focus should be, but because this is where we feel the most comfortable.
Diversification for your print business begins with the mindset of first and foremost learning what your customers are trying to achieve with the products and services they purchase from you. When you understand their business objectives, then you can start to think about expanding your product offering to help them achieved their goals.
One of the keys to diversification is your willingness to sell non-printed products, printed products that are manufactured outside your plant, and digital products. This is a big change in your mindset if you are internally focused. An internally focused printer is thinking all about maximizing the return on their capital investments. Selling promotional products does nothing to increase your return on investment of your press. Expand your thinking in many directions, beyond the four walls of your manufacturing operations, beyond your business into your customer’s business, and beyond print to the other communication methods that are complimentary to print.
Diversification requires a mindset change at the top and throughout the organization. The mindset change is primarily about moving from an internally focused print manufacturing business to an externally focused customer solutions business.