The plight of the international print industry is great – prices are going south; print providers that up until recently were sitting pretty are exiting the market. Obviously the “major online print providers” are to blame – but there are strategies to counter this trend.
“Zipper, you and your online print – they’re ruining the prices in our industry” is a statement I heard again recently on the phone. Since morphing into a kind of over-the-phone counsellor for the internationally distressed printing industry, I have gotten used to receiving such – usually unsolicited – calls. (I still haven’t the faintest idea why I usually get them in the evenings or very early in the morning…) And, as is the way of things, I get given a lesson in market economics over the phone. In the good old days things were better; occasionally you could come to a mutually acceptable pricing arrangement with a competitor and anyway, why are these online print providers now dismantling our market and why don’t they just stay there where they come from… That’s generally the gist of the ear bashing I normally get.
Irrespective of the fact that one or two of my caller’s remarks are questionable from an antitrust perspective, this telephone conversation demonstrates once again that a major misunderstanding exists here. Because if you analyze the causes of my caller’s problems, the simple fact is that those mean, nasty customers are the “bad guys” not the online print providers. A market can only emerge if there is demand and patently the large number of online print providers around the world is satisfying this demand. Of course you have to ask why customers of a conventional print company would want to switch to an online print provider. Let’s get to the bottom of this issue – I see six aspects here:
1. Online print is convenient – customers can order print products really simply when and where they want, 24/7 throughout the year.
2. Online print is often inexpensive – many online print providers are inexpensive, some are even cheap, because they offer very competitive (aggressive) pricing. That saves a lot of money on standard print products.
3. Online print is versatile – customers can choose from hundreds of offerings as they please. Local printers can’t manage that.
4. Online print is where customers are – they can reach their online print provider whatever their circumstances. Be it in their hotel at 11pm or in a cab, the customer is always kept in the loop, irrespective of which communication channel is used.
5. Online print provides instant pricing – while print companies prefer to send out written quotes by fax, which tends to delay the buying process and make it less transparent, online stores can provide a price quote immediately.
6. Online print delivers promptly – a 24- or 48-hour service is the norm for most online providers. Conventional print companies’ waiting times are often a “show-stopper” for online customers. Once customers have gotten used to receiving a prompt service, that’s something they are usually not prepared to forego. Obviously, for reasons of convenience – in short: online print providers long ago assumed needs-fulfilment leadership.
Are you with me so far? Yet even if the “all-powerful” online print providers, who are basically only using a modern communication channel like the Internet to gain market access, are shaping the market, there are nevertheless strategies that could help conventional print companies out of their dilemma. But they have to want to do something about it. (You know: “I. Cannot” lives on “Don’t Want To” Street)
The initial starting point is a self-audit, in other words the print provider needs to optimize their production processes and systems and if necessary reengineer them. This often calls for them to “reinvent themselves”. They are going nowhere if they don’t have ERP (MIS), decent Internet access and “redesigned” (= cost-effective) production, combined with a willingness to forego the latest BMW 7 Series as a company car. But a new printing press is not of much use if it doesn’t include a data exchange portal that enables orders from other print providers to be accepted. So let‘s get cracking with actioning a survival strategy.
A market can only emerge if there is demand and patently the large number of online print providers around the world is satisfying this demand. Of course you have to ask why customers of a conventional print company would want to switch to an online print provider.“ – Bernd Zipper
The following strategy paths could be (very) helpful (Please select … all of them, for preference!):
a) Find “your” niche! While the dilemma experienced by conventional (let’s call them analog) printers can essentially be attributed to the six points mentioned above, the problem that online print providers have is that they can’t do everything themselves. Online print providers are reliant on standard products. Certainly that won’t be an issue any more in the not too distant future, but for the moment at any rate analog print companies that can manufacture niche products well and fast are in demand as partners to online print providers. Several niches based on type of fold (see my faltplandruck.de post), print method (letterjazz.com) or type of product (bierdeckel-fritz.de) can be established. Particular bookbinding techniques, special finishing methods or even new services etc. can also help companies become specialists in “their” niches.
b) Cooperate with online providers! Print providers that are able to action products particularly well or particularly inexpensively are potential partners for major online print providers. Well all right, that’s provided the terms (see above) are right.
c) Partner with companies! If you know of a smaller online print provider in your vicinity or have personal connections, then don’t be bashful, enter into a partnership. Physical proximity can help you enhance your delivery lead times or even reduce them to a minimum – that gives you latitude on the online print circuit.
d) Up your transparency! Yes, your competitors are not meant to come by ANY of your product pricing information. And yes, your competitors certainly won’t know the settings for your latest binder (…that has after all been a company secret for decades). Do you really believe that anybody who is successful in the market has not done things their own way? Do you really believe that your secrets will help you to win the battle? Most unlikely. But what if – even if you don’t have a portal or online store – a potential customer of yours is interested in what you can do and in what it would cost them.
e) Up your speed of reaction! Sending out quotes by fax was what people did 20 years ago. Well, the colleague dealing with your request is at lunch right now or on a customer visit – that does not interest your potential customer in the slightest, because they can get all they need from your competitors at the touch of a button. Shorten the time between enquiry and quotation.
f) Switch off! If you are still using “old-school software” – i.e. outdated “data acceptance portals” from a highly innovative printing press manufacturer, for example, you need to check whether this is up-to-date. Sometimes it’s better to accept data via Dropbox or Box, to show customers that you really are in the saddle… Old software should be allowed to rest in software peace!
g) Upgrade! No, not by buying another piece of machinery, but by acquiring a smart MIS and fast Internet, you gain control of your pricing and data transfer. That’s vital, even if you don’t want to take your business online.
h) Improve your purchasing! It goes without saying that the colleague who handles bookbinding jobs for you is a really nice guy… But are you getting the best prices? These should be reviewed r-e-g-u-l-a-r-l-y. Is the paper you use too expensive? Then you should cooperate with your local competitor and join forces.
i) Learn new things! Nobody is too old or too poor to learn. There is a wide range of eBusiness and eCommerce workshops and seminars on offer. Make use of these events, even if they are not print-specific. These will give you an insight into how online print providers think and appeal to customers and that will help you to understand online-community concepts.
j) Get younger people on board! Many decision-makers in the print industry are so massively insecure that they have forgotten how to make decisions and what they need to make decisions about. Of course you don’t want to show ignorance, a dash of laziness and sheer despondency – especially not to your colleagues (… you are after all an entrepreneur). Change it – start working together with those people in your business that have the fiercest cellphones or who are eBay PowerSellers – and learn to deploy these resources for the benefit of your company.
k) Embrace digital transformation! Even printers (i.e. those operating the presses) need an e-mail address, even Logistics personnel need to be brought up to speed every day (!) with what is happening in a company undergoing change. So take heart and consider how you can improve communication within your business and how you should approach the issue of digital transformation. Obviously Industry 4.0 is a great buzzword, but if your answer is: “We have been doing that in the printing industry for ages”, then you should consider how much of it you actually put into practice.
These suggestions are certainly not the answer to everything, but just a start. And it’s a good start too. Incidentally what I am not all that impressed by are those run-of-the-mill stores that hundreds of other print providers use too. If you don’t have your own profile and online presence, a long-term-tied online store that is not really appealing is unfortunately not a formula for a suitable counter strategy.
Oh well – and let’s return to the print business owner, who just wanted to “let off steam” on the phone. Just as I was gearing up to respond and explain to him what it was about him and his business that he needed to change, in my opinion, he then lost interest. I myself can only advise all those “perplexed print providers” out there – start making changes to your business, and then you’ll get that new 7 Series you’ve been after too ?
PS: If you would like to call me, maybe to “let off steam” about this blog post, then the best day to do that is on a Monday – my regular day in the office. +49201811750 is the number to call, and if you call IN THE MORNING, I am usually in a good mood too.