Non-print Diversification: Supplemental InsuranceAugust 2013 By Erik Cagle, senior editor
Roll the clock back 15 years ago to 1998. These were the (relatively) early days of the Internet, from a business standpoint, and especially for the printing industry. A story appeared in this magazine commenting on the importance of having an online presence, though most firms took a "me, too" approach of constructing what were some of the laziest and uninspiring online brochures.
Don't laugh too hard. The calendar may read 2013, but not everyone has adapted their online presence to reflect generally accepted practices. You probably wouldn't be surprised to find out that those printers with George W. Bush-era Websites have not bothered to make a substantial foray into Web-to-print (W2P) offerings.
Firms that diversify into non-printing disciplines understand that opportunities abound for those companies that are quick to react to changes in the marketplace. Fifteen years may seem like an eternity, but considering the drastic changes in online commerce, it only seems like yesterday.
The door to diversification isn't closed shut, but for printers that have hemmed and hawed during the "wait and see" era of 2008-2012 without having made any significant investments in equipment or capabilities, there is a bit of ground to make up. Take notes from a sampling of companies that have plunged into new territory.
Want to talk diversification? It's reflected in the name of Bolger Vision Beyond Print, a haven of creativity based in Minneapolis. dik Bolger is a fan of the cutting edge, so it comes as no surprise that his company was an early adopter of W2P. But, after going through several off-the-shelf software experiences, he found the products did not fully address the needs of his customers. So Bolger reached for a packet of seeds and grew his own product.
The result is Bolger's SmartQ print management system—branded about two years ago, but really a labor of love for a number of years. It's also a bit inaccurate to use the term "result" as it is (and likely always will be) a work in progress: tinkered, tweaked and updated as the needs of customers and markets evolve. It has been a learning experience along the way.
"One of the mistakes we made early on was promising the moon (to clients) and not being able to deliver it in a seamless fashion," Bolger notes. "When you get into application development, and you've got a bunch of salespeople who have no idea how it works, sometimes we found ourselves promising more than we could deliver. In almost every case, we were able to figure out how to deliver, but it was not profitable. Today, we run this area as a profit center. We don't give away technology to gain print. We charge for technology, even if it will generate print (jobs)."
Adam Gertz, the IT guru for Bolger Vision Beyond Print, notes that one of the tougher aspects is educating customers with how to integrate the technology into their own workflows. Dealing with client IT departments has provided obstacles, since the product has a number of moving parts that require input from both the printer and end-user vantage points.
Here, too, database management and data security come into play. For example, Bolger's health care clients require a 10-year retention program for every file that's ever been mailed or for letters generated through the tool to be available online for archive retrieval during audits. Bolger goes through the SSAE16 SOC2 Type II audit for the health care markets.
In all, Bolger has implemented more than 300 active client sites, of which a couple of dozen are so highly customized that the printer works with these clients on a daily basis. Most are traditional online storefronts or plain fulfillment sites and don't require extensive customization.
"If the client wants to run a marketing campaign and wants certain items tracked, we might use a separate URL where certain things go to (the customer's) system, for the ability to bring it all into one reporting area," Gertz states. "We send out highly variable mailings: 60- to 70-page, complete variable, books. In the health care industry, a new member might get a welcome book, a letter about their doctor, upcoming appointments or any kind of health service that might be pertinent to them. This is all being extracted out of 12 or more data streams in order to compile the printed piece."
SmartQ may be in a good place development-wise, but again, it's not a technology with a final destination. Gertz notes that work is currently underway to expand the technology to make it conducive with a wider range of markets. As for his competition, dik Bolger suggests that any commitment needs to be long-term, with dedicated IT resources constantly applied.
"We've got a large team of people outside my door here who are working on application development," Bolger says. "Finding people who can speak plain English in the application world is difficult; it's a team sell, not something most salespeople can go out and talk about intelligently. You have to put your app people and salespeople together, and that in itself is a learning curve. We've gotten pretty good at it. It's a tough learning curve for a small- and mid-sized printer to go through, even a struggle for some of the bigger companies."
Independent Printing of DePere, WI, specializes in presentation folders, packaging, greeting cards, inventory/fulfillment, storefront solutions and other online solutions. In 1996, it introduced fulfillment services for a large insurance company. At the time, it was relying on manual data entry, and inventory accuracy was a constant challenge. Once a month, Independent spent an entire day conducting physical inventories, and reconciling variances between system quantities and physical inventories would take several days.
"We knew we weren't servicing our customer very well and needed to upgrade our service," says Dan Simons, co-owner of Independent Printing. "We conducted a detailed needs analysis with our current fulfillment customer and five other companies with large fulfillment needs. We realized that, by solving unique challenges for our customers in specific industries, we could become more valuable to them. We developed a real-time, completely paperless fulfillment solution to meet specific customer needs. The use of RF and barcoding has allowed us to build in automated processes and internal controls that make it virtually impossible to make a pick mistake."
The new fulfillment/storefront tool has performed admirably. Simons points out the company is able to deliver same-day shipping with a 99.8 percent on-time rate and offer absolute accuracy with real-time reporting. The first month yielded three variances to resolve, all tracked back to inaccurate receiving. When the three subsequent months yielded zero variances, the customer switched to quarterly physical inventories. And when the next quarter passed without a variance, the physical inventories ended.
Simons notes that much has changed since 1996, and the company now uses a value-added differentiation approach to niche specialization in five different markets: paper manufacturing, higher education, health care, insurance and packaging. For example, Simons calls his firm the "supply room" for paper manufacturers, and lead management is a key part of their duties. The fulfillment center is backed by a call center, both housed in a 30,000-square-foot facility.
"Being committed to change and realizing that you are never done can be difficult at times," Simons remarks. "Our storefront solutions continue to evolve and solve unique business problems. The back-end fulfillment system continues to evolve, as well. Today order line items are channeled to five automated workflows, which eliminate touches and drive efficiency. Automated workflow has been a key to help us offer integrated solutions seamlessly to our customers."
As with Bolger, Simons points out that the IT component is an ongoing learning process. "In our environment, data is king," he says. "We use event-driven e-mail to drive communication and calls to action. We use the data we capture in multi-faceted campaigns (utilizing print, video, e-mail, personalized URLs, calling, text) to attract new customers for our clients, new students for colleges and physicians for health care organizations, to name a few."
Naturally, the best way to stay abreast of the needs of clients in different niches is by keeping an attentive ear. "By solving your existing customers' needs across multiple departments within the organization, you will be on your way to developing defensible niche specializations using a value-added differentiation strategy," Simons adds. "Capture data and capture results. Being able to show the return on investment is key to growing and retaining business in a competitive environment."
For those companies that opt to go with an off-the-shelf online storefront solution, the commitment to staffing a W2P department with experienced practitioners will still go a long way toward a successful operation. That was the case with Pegasus Interprint, a commercial shop based in Van Nuys, CA. It wasn't long after Pegasus obtained EFI's Digital StoreFront that the company brought in Scott Perry, a Web and IT administrator with nearly 10 years of W2P experience under his belt.
Perry underscores the need for printers large and small to invest in the "backbone, the people driving the technology within your company." That starts with a W2P quarterback manning the helm, driving technology out to customers and providing support when needed.
What drove the decision to go with Digital StoreFront was the needs of two customers: a university and a large, national property management and rental company. While there have been bumps along the way, Perry notes that EFI's service and support system are both strong. Since Pegasus already had been using EFI's Pace MIS system, Digital StoreFront was easily integrated to make for a highly streamlined process.
Pegasus has rolled out about 30 customer sites, with the aforementioned national property customer generating between 1,200 and 1,400 orders per month. Previously, those orders had been submitted by fax and needed to be manually entered into the system. Naturally, some members within the organization resist using the online system—some because they prefer to fax, others because the job details are too intricate.
"There are those who will refuse to use the system and that's perfectly fine," Perry remarks. "We'll do whatever's necessary to make our customers' lives easier. That's really what Web-to-print is designed for, and that's how we tout it to our customers. It's easier for them to manage their jobs, and it provides real-time status updates and online proofing. Turnaround times are quicker and the interactions between customer and printer are greatly reduced and streamlined." PI