Why growth may be the wrong path for printing companies
Why do we concentrate on growth?
Many sales targets consistently focus on increasing turnover. Naturally, if you have a lot of press capacity to fill then this is important. However, for some companies it may be a better strategy to focus on bringing in more profitable clients or even customers that are nicer to deal with!
I want to challenge the idea that sales always has to be about growth. For many, the path of standing still may not be right. For others, it is certainly something worth considering.
Print volumes are declining
There are plenty of good news stories about print. For instance, a lot of people are writing about how printed marketing can be much more effective than e-marketing. We are seeing many more companies looking at and using print.
But we live in a world of smaller and smaller budgets. People may want to use print, but they buy less of it than they used to. There’s no escaping the fact that there is less and less volume around.
So why do so many printers invest in more capacity?
It seems that, as soon as their presses are busy, a printer wants to be able to handle more work. They will be talking about what the next press will be and how it will have a greater output.
But the more capacity there is in our industry, the more people are fighting on price to fill it. The more volume printing companies invest in, the more print is commoditised.
Is it really necessary for print companies to continually grow?
I spoke to two companies recently that are fighting against this trend. One told me that they would like another 10-15% more work, to make sure their factory and plant is used as efficiently as possible. But, after that, they will stop trying to increase their turnover. They don’t see the need.
Another company has two B2 presses that are fairly long in the tooth. Rather than buy two new presses, they calculate they can get roughly the same throughput by investing in a single, more efficient machine. That’s enough for them.
Both companies saw an advantage in stopping the relentless pursuit of growth.
“Is it really necessary for print companies to continually grow?” https://t.co/Bku1cjNGMO
— Matthew Parker (@PrintChampion) February 5, 2018
If you stop growing, it’s easier to focus on profit margins
The second company will reduce its cost base dramatically by losing a press. Both companies will need less sales people to maintain a static sales volume.
Both companies also said that they wanted to continue selling hard. But the focus of the sale will change. Rather than chasing volume, they will be looking at the right profit margin. They will try and win more work at higher margins and fire customers at lower profit margins.
Don’t get me wrong, investment is vital
To get the right profit margins, you need to be efficient. That means having modern, productive presses. It also means having an up-to-date workflow that reduces manual intervention as much as possible.
But it also means investing for smaller capacity. It means investing for profit, not volume.
This is an excerpt from my new book “How To Succeed At Print Sales”
My new book covers:
- Understanding your current sales
- Setting the right sales targets
- Carrying out the right day-to-day sales activities
PS Are you looking for other simple but effective strategies to help you connect with today’s buyers? Download this essential resource. You’ll also be signed up to the “Views From The Buyer Community” at no cost, where you receive useful resources, tips, rants and stories three time a week