Why selling print will be the death of printing companies

Posted by Matthew Parker

Do you remember vinyl?  What about cassettes?

I spent many happy days in my youth building up my record collection.  And I enjoyed making compilation tapes too.

All of this is now a distant memory.

My vinyl was sold off long ago (although with many regrets).  My cassettes are now more.  DAT has been and gone.  Even CDs are falling by the wayside in the era of the MP3.

The music industry has evolved.

Printers need to evolve too

Selling CMYK is no longer enough!  Find out why and what to do in this article

Selling CMYK is no longer enough! Find out why and what to do in this article

They need to accept that good profit margins are now very difficult to make simply by selling ink on paper.  Printers need to start selling a more involved service to clients.  They need to start selling extra services that can have a higher profit margin than print.  I call these value added services.

Printers that change and start selling value added services will create a new type of relationship with their clients.  Customers will be prepared to place work at higher margins with these suppliers.  These print companies will be in better control of their profit margins.  They will be better placed to achieve the right results that they need.

Print companies that keep selling print and nothing else will fail to form good customer partnerships.  They will simply be regarded as commodity printers.  They will have little control over their profit margins.  And they will struggle to make the right results or even to stay in business.

Here are three ways in which these services change the way in which the buyer treats the printer.

Print companies are no longer seen as commodity suppliers

Instead they are seen as service providers.  They are seen as business partners that help their clients achieve their business goals.  They help their clients carry out their business more efficiently or more cost effectively.

These companies can also set themselves apart from the competition more easily.

Buyers are willing to pay more for better skill sets

The type of sale changes when printers offer value added services.  Most buyers assume that a printer will offer good service and good quality.  So they choose on price.

However, if a printer is offering a value added service such as data management or design, the situation changes.  The buyer sees the skill levels at the printers as making a real difference.  This is because they are looking at a service where they will measure by return on investment.  Before, they were thinking in terms of commodity manufacturing.

Suddenly it is a lot easier for a printer to stand out from the competition.  But they do need to sell their skills better.  This also changes the buyer’s purchasing process.

It is more difficult to beat companies up on price

Price will always be an important decision in the purchasing process.  However, in terms of print manufacture the buyer can simply compare a like for like specification.  When looking at services a buyer can be encouraged to consider return on investment rather than just looking at cheapest price.

Offering value added services can make a real difference to a printer.

So does this mean that all printers should become Marketing Services Providers?

Not at all.  There are a wide range of value added services that can be offered.  Many printers will already have some in house, such as design or postal services.

Marketing Services is certainly one strategy, but it is not the only one.  Let’s focus on the magazine sector.

Here’s how one printer put this strategy into practice

In the UK, one printer looked at the challenges that were facing many of its publishing clients.  And the challenges lay not in print, but in how to tackle producing digital editions.

So they developed their own software which allows their clients to create digital editions easily.  Publishers can make a single file upload for print and digital editions.  This has allowed sales conversations to move away from price matching.  Many clients are now interested in having an easy digital solution from a print supplier.  So the lowest print price is no longer the most important factor.

However, you need your own action plan to create value added services.

Here are three action points that you need to be scheduling right now

  1. Ask your customers what challenges they face
  2. Create a service offering which addresses these issues
  3. Develop a new sales message which focusses on the services you offer, rather than just putting ink on paper

You should also have a look at this article .

Do you remember His Masters Voice?

Well, HMV went into administration.  It didn’t change with the times.  Printers who don’t change with the times will cease trading too.
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19 Responses to Why selling print will be the death of printing companies

  • Neal Siskin says:

    I am an independent Printing Broker, looking at ideas for expanding and improving business potential.

  • Richard Rodriguez says:

    I have read many articles which mention value added services but the list of these services is usually short and or vague. You mentioned design, data management, marketing, postal services, and digital publishing software – all competitive markets. As a print broker many of my best vendors I use already offer many of these services (or claim to) and are still struggling. I guess I’ve been looking for a better and longer list of value added services which have the large volumes and profit potentials of print. I know many printers are moving into promotional items as another source of revenue. Other ideas would be very welcome.

    On an up note, vinyl records are showing a resurgence in popularity and artists are making efforts to strengthen the trend.

    • Matthew Parker says:

      Richard, I will be publishing more ideas next week. Yes, all markets are competitive at the moment, but sold right they can create a value added competitive advantage.

      All the best

      Matthew

  • Enlightening and I so agree with the fact that you must get in gear and offer more commodities besides just putting ink on paper. I find the intuitive feeling to be exciting. Opportunity is attractive,
    instead of boring.

  • Terry Graham says:

    Good piece…currently any Printing company should be thinking about 2 years ahead. If not, they will die on the vine

    • Matthew Parker says:

      Thank you Terry. Thinking ahead is important. I would encourage print companies to have a five year plan.

      Matthew

  • Pingback: How to avoid selling print – nine sales strategies to help printers improve profit margins | Profitable Print Relationships

  • Alaina says:

    I kicked off Seed Print Group last May (2012) after being in the Spec Market for a Paper Merchant for the last 20 years and I haven’t looked back. I am always looking at a point of difference and aligning myself with creative suppliers who are looking outside the square and going that extra step for my clients.

  • Pingback: How the TPD principle stops print customers choosing on price | Profitable Print Relationships

  • Katherine says:

    As a buyer, I’m absolutely willing to pay more for skill sets and unique product offerings. I agree that too many printers assume price is the only determining factor.

    Perhaps for some clients price is a main concern, but what about creative professionals? I want my designs to be their best. I will pay extra to a printer who offers an array of beautiful paper choices and helps me decide on the right option for my project.

    Printers need to create different marketing personas to get out of this one-sided mentality.

  • Al Schnell says:

    We have been in the printing business for 20 years and one area which we have grown is a segment of the nonprofit market which generates income from appeal mailings. These projects include graphic design services, lots of offset printing, heavy personalization, data base management and multi piece mailing services. These projects have sales values 10 times greater than our average print sales job along with margins which are much better. Anyone else have a unique market and service?

    Al

    • Matthew Parker says:

      Al, thanks for your comments. I think having a clearly defined market and service is one way to create a proposition that is much more engaging to prospects. I wonder if your profit margins are due to this sector being prepared to spend more, or (as I suspect) because you market your expertise in this sector?

  • Al Schnell says:

    A little of both. We do not have a lot of competition in this type of work from printers our size because of all the different components required which we do all in house. Our local competition would have to sub out some of this work which raises their cost. There are companies capable of this work but they are larger and tend to charge a higher price. With both of these at work we know we are bringing a valuable service and we can charge a higher price and still remain competitive.

    With existing customers and when running yearly or bi-annual repeat projects the price is never questioned. So it appears to be a willingness to pay a higher price for peace of mind that the job will be completed on time and they kown the results always pay off. The key factor in all of these are the ability to run personalization.

    The tough part is finding the non profits who run appeal programs and getting a foot in the door. Fortunately this is a normal part of the sales process and if we work our sales plan we eventually find them, although not as fast as we would like.

    Thanks

    Al

  • Richard Tillotson says:

    I can understand the feel that current digital trends might suggest the death of print but with new technologies making previously expensive finishing processes more affordable I think we are about to see interesting times in print. If you do happen to only offer large run print to make your living I think you will struggle.

    Diversifying your capabilities will certainly make you more useful to your clients and the marketplace in general but I think there will always be the need for print. Your musical analogy is probably not correct as yes formats do die and that is often the fault of the companies behind those technologies and not the marketplace eg – beta vs vhs, blu-ray vs HD.

    Keeping an eye on future technology that may be incorporated into your business as well as offering a high quality of service to your customers will keep you in the game (who has a reliable mechanic). Not every customer has the budget to go straight to web and print is often the starting point but if your delivery is ineffective it doesn’t matter what media you choose, as we say “if it doesn’t work for you, it won’t work for us”.

    A great example for us would be books, before as with music authors would hope to be published, now self publishing is more affordable, ebooks will not completely take the place of traditional books, they will compliment books I think but there will always be a need for hard copies.

    I think the main point you might be suggesting is not to place all your eggs (capabilities) in the one basket.

    Regards

    Richard

    • Matthew Parker says:

      Hello Richard, thank you for your thoughtful comments. I am certainly not suggesting the death of print. However, I do think that printing companies need to sell more than print if they want to make a decent profit margin. The true value of print these days is combining it with different services and communication channels.
      Matthew

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