Last month’s eXpert Row article by Vince Naselli of TrendWatch Graphic Arts ("Variable Data Printing: Salesmanship Is Only Half the Story") provided an interesting and thoughtful take on what is necessary to be successful with variable data printing. Early in the article, Mr. Naselli quoted a printer who argued that the lack of well-trained, competent salespeople was the primary obstacle facing commercial printers who enter the variable data printing market.

Mr. Naselli agreed that good salesmanship is important to success with variable data printing, but he went on to observe that the "other half" of the story is that a large majority of commercial printers do not have the infrastructure to successfully produce variable data printing and often do not understand the best applications for VDP or what kinds of businesses make the best prospects.

Mr. Naselli then offered a rather bleak assessment of the odds that commercial printers could become successful with variable data printing:

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"Even if every digital printer in this industry had the right infrastructure, customers, applications, and sales strategies for these applications, it would be a bit like a planetary convergence (when all the planets in the solar system align themselves in a more or less straight line). It’s not completely unheard of, but very, very rare. Very few printers will find the right combination." (emphasis in original)

"As a result, most commercial printers aren’t going to be able to compete in the variable data printing market. . . Good, bad, or indifferent, few commercial printers are going to be able to make this technology work on a long-term, profitable level." (emphasis supplied)

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Success with personalized print certainly does require more than effective selling techniques. The chorus of graphic arts industry analysts, consultants and other pundits who argue that commercial printers can succeed with variable data printing, if they would only learn to sell it, significantly understates the challenges inherent in building a successful personalized print business.

I completely agree with Mr. Naselli’s view that, to be successful in the variable data printing marketplace, commercial printers must develop the appropriate infrastructure and learn how to identify attractive prospects. But, I disagree with Mr. Naselli’s conclusion that most commercial printers will not be "able" to compete effectively in the variable data printing market.

Creating a profitable variable data printing business requires learning and understanding what is necessary for success and a willingness to develop or obtain the resources and competencies that are needed to achieve that success. Commercial printers are as "capable" of making this effort as any other kind of potential participant in the variable data marketplace.

Building a successful variable data printing business must begin with the recognition that such a business differs in fundamental and substantial ways from a traditional commercial printing operation. These differences mean that a printer cannot (or, at least, should not) view the addition of variable data printing as a simple extension of existing traditional commercial printing services.

To drive home this point, I typically suggest that commercial printers stop using the term "variable data printing business" and, instead, describe the prospective new business as a "one-to-one marketing services business." This re-characterization is more than an exercise in mere semantics; it helps establish the mindset that what is being undertaken is the development of a new and different business.

The second step in building a successful one-to-one marketing services business involves the development of an effective strategy for the new business. While the specific content of business strategy will obviously vary from business to business, any complete and coherent strategy must address five fundamental issues -- customer selection, customer value proposition, scope of operations, profit model and methods of differentiation.

Collectively, these five central elements of strategy define and describe a company’s business model or business design. They essentially explain how a business works (or will work) and how and why that business will earn an acceptable profit. In today’s highly competitive environment, businesses must be designed for profitability. A company’s business model or business design is the company’s "recipe" for financial success, and the five core elements of strategy constitute the essential ingredients in that recipe.

If done properly, the process of developing a business model or business design for a one-to-one marketing services business will enable commercial printers to identify and define the critical success factors in that business. This process will also illuminate clearly the fundamental differences between a traditional commercial printing business and a one-to-one marketing services business. Making these differences visible can help printers avoid the missteps that arise from assuming (incorrectly) that what works well in one business will work equally well in the other.

After several years of fairly sporadic use and less than overwhelming acceptance, variable data printing finally seems poised to experience the explosive growth that some graphic arts industry experts have been predicting since the mid-1990’s.

In a recent study commissioned by the Graphic Arts Marketing Information Service (GAMIS), print research firm Interquest projected that variable data printing sales will grow from $2.56 billion in 2001 to $6.28 billion in 2004. Print buyers interviewed for the GAMIS study estimated that, within three years, 29% of their black and white and color printing will use variable data.

Today, the use of customized marketing/customer communications is still in its infancy, and the competitive structure of the one-to-one marketing services "industry" is rapidly evolving. No one type of business has yet emerged as the dominant or preferred supplier for one-to-one marketing services.

In this rapidly evolving competitive environment, commercial printers are as well positioned as other potential market players to exploit the growth opportunity represented by one-to-one marketing services. No company that is currently operating in the one-to-one marketing services "space" entered that arena having all the required strategies, skills and competencies already in place. That’s because the market itself is very new, and the companies that are now operating in the market are either start-up ventures or firms that came from other industries.

Commercial printers can compete effectively in the one-to-one marketing services industry if they are prepared to invest the time, energy and resources that are necessary to build sound business models, craft effective business strategies, and develop or acquire the required skills and competencies. This is not necessarily an easy task, but it can lead to very profitable results.