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Carl Gerhardt

Business Sense & Sensibility

By Carl Gerhardt

About Carl

Carl Gerhardt is the chairman of Alliance Franchise Brands LLC, the parent company of Allegra Network LLC and Sign & Graphics Operations LCC, and a world leader in marketing, visual and graphics communications, linking more than 600 locations in the United States, Canada and United Kingdom. The company’s Marketing & Print Division, headquartered in Plymouth, MI, is comprised of Allegra, American Speedy Printing, Insty-Prints, Speedy Printing and Zippy Print brands of marketing, printing, mailing and Web services providers. Its Sign & Graphics Division, headquartered in Columbia, MD, is comprised of Image360, Signs By Tomorrow and Signs Now brands of sign and graphics communications providers.

Carl and his wife, Judy, owned and operated their own successful Allegra franchise for nearly 20 years before selling the $2.3 million operation in 2003. He is a PrintImage International/NAQP Honorary Lifetime Member and was inducted into NAPL’s prestigious Soderstrom Society in 2010 in recognition of his contribution to the industry.

 

Cannibalize Print to Grow Bigger

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Would you consider recommending to your customers that they should print less and take more things digital? It sounds counterintuitive. Yet if we are honest with ourselves, we know that many of our customers have been doing this very thing and we have watched our business erode.

Savvy marketers in the consumer products world use this strategy all the time. They will introduce new products with full expectation that they will erode current brands. I learned this many years ago while working as a product manager for Ralston Purina. While training, I was assigned to the consumer products division that marketed brands like Dog Chow, Cat Chow, Meow Mix, Chuck Wagon and a growing list of brands. Meow Mix was nothing more than three flavors of Cat Chow mixed together. God forbid that little fluffy would have to eat the same flavor day after day. It was a huge success, but it did erode the sales of Cat Chow. Combined, the brands enjoyed dramatic growth, as did multiple other new brand introductions that eroded older more mature brands.

Why should we cannibalize our print volume?

The short answer is to grow. Rather than fight this trend and preach to people about the value of print, why not join the party and help them transition to digital. We have to learn how to generate revenue from this effort by selling other services. Transitioning files to digital format and making them Web and mobile media friendly is an obvious opportunity. We should embrace all things Web related.

And, we can and should charge for that. Agencies are making lots of money by doing this very thing, telling their customers to print less and do more with digital media. There are a lot of poor Websites out there with very little functionality or marketing strategy applied to them. They need to be updated and made mobile friendly. Many companies need help setting up ecommerce capabilities. This is only one example of new services we need to offer as we see print being cannibalized every day.

If we buck the trend that makes business sense for our customers, sooner or later they will see us as aging dinosaurs and will find other partners that are more progressive. If Ralston Purina would have stayed with only the two pet foods they started with—Dog Chow and Cat Chow—they would not have become the major player in the pet food market. They recognized early on that to grow in the market, they needed to cannibalize the very products that made them so successful. The new products were costly to research, and they also needed to build plants to manufacture them. Investments are always necessary to keep your products and services in growth mode.

I am realistic enough to know that making moves like this are not easy, and one must be realistic about what we are capable of doing. There are other ways to grow besides promoting cannibalization. Some can grow by getting a bigger piece of a shrinking pie. This can be a good way to grow without working against the hand that feeds us. My main message is to be sensible, and not to fight a trend that we can't change. Instead, consider joining the trend so your customers perceive you as an innovator and not a laggard. No one wants to do business with a laggard; it's just not good business sense and sensibility.

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