Embrace ‘Convergence’ to Boost Customer Retention and Profits

Staying in your lane is good advice on the interstate, but in the commercial printing world it’s a sure-fire way to fall behind. The most successful print services providers (PSPs) have expanded beyond commercial printing into new markets, such as packaging, labels, wide-format, apparel, fulfillment, promotional products, and more — a process known these days as “convergence.”

One of the top reasons they’re doing it? Customer retention. It’s tougher for a client to leave for a new provider, they say, when their company is already handling everything.

“Our customers like that they’re able to go to one stop for everything,” explains Alex Holmes, lead estimator at Manchester, Connecticut-based Allied Printing Services, a 74-year-old commercial printer that expanded into packaging years ago and has reaped major profits as a result. Today, packaging makes up 15% of the company’s annual sales. Most of its packaging work is with straight-line glued and crash-lock bottom boxes, Holmes says, and the company does a lot of work for the pharmaceutical field.

To enhance this business, Allied installed a new Koenig & Bauer Rapida 106 X double coater UV perfector press earlier this year, the first such configuration in the U.S. Operating at 18,000 sph with both conventional and UV inks, the fully automated press is designed with four print units, plus coater, two drying towers, another four units, and another coater with a 12-ft. delivery.

“The new press has been very instrumental with our packaging,” Holmes attests. “Having the double coater in the middle, we’re able to add a lot of embellishments to the packaging. That helps it stand out on the shelf.” For example, soft touch coatings and textures, he notes, can be enticing to consumers and contribute to their purchasing decisions. Being able to provide this has been key to the growth of Allied’s packaging business.

Expanding into packaging and other services is a natural for a company like Allied that aims to provide everything its customers want.

“We pride ourselves on not saying ‘no’ to any type of work,” Holmes says. “We like having customers come to us saying ‘we have a problem. Can you help?’”

Allied’s structural engineering department works with those customers to understand what type of packaging they need, and comes up with a way to provide it.

“We really like being able to do everything under one roof,” Holmes adds. This helps the company bring in new business. If a customer is doing a direct marketing campaign, for example, and wants to support it with a packaging project, Allied is ready to help.

Investing in Education

Jumping into a new market like packaging, however, doesn’t mean instant success for a PSP. Not only do you need the right equipment, you have to invest in the necessary education.

“We have some really good internal seminars teaching the different departments the differences, nuances, and engineering standpoints of developing and putting together retail packaging,” notes Charlie Cox, COO and co-owner of Wallace Carlson, an $18 million commercial printer based in Minnetonka, Minnesota, which started offering packaging a few years ago. “There are complexities to package printing that involve a deep understanding of the process, which is why investing in training is important.”

The 70-employee company does a lot of business in specialty secured packaging with gift card carriers, and produces packages using special effects and unique coatings. Because such specialty package printing requires a heavier stock, special substrates, special colors, and distinct types of finishing, Wallace Carlson invested in a six-color Komori Lithrone GX40 (GLX640) advance UV press last year, along with a Vinfoil Optima cold transfer foiling unit. The press can print on up to 40-pt. substrates, including board, paper board, synthetic materials, plastics, polyurethane, and polyethylene, and can produce a host of special effects, like glitter.

Finishing improvements were also essential, Cox notes, in expanding the company’s specialty applications. The company uses a Brausse Tornado 106CE for high-speed diecutting and embossing, and a Brausse TA900 folder/gluer. Cox acknowledges that the expenses can add up, but the payoff in new business can be great. And expanding into packaging can also help insulate a PSP when market changes diminish its traditional printing business.

Learning and Growing in Labels

With a successful commercial printing business stretching back to 1925, BP Solutions Group is quite familiar with the way fluctuating market conditions can impact a PSP. Over the years, when customers trimmed their marketing budgets, print orders dropped at the family-owned Asheville, North Carolina, company.

To find new business, company President Scott Cotten began to explore the packaging space in 2005. The company faced a few hurdles. One of the biggest, Cotten told Printing Impressions in a 2017 article, was finding packaging expertise to bring in-house. “There’s an awful lot of knowledge and experience that goes into diecutting and folding and gluing that is not immediately apparent to a commercial printer when you’re getting into the business,” he said at the time.

At BP Solutions, Scott Cotten (left) and Ryan Cotten stand with the company’s Mark Andy Digital Pro 3 label press.| Credit: BP Solutions

But BP Solutions has honed its skills over the past 18 years and successfully grown its labels and packaging business, bolstered by Asheville, North Carolina’s booming craft beer industry — a significant source of new label business.

“The folding carton work and the label work is just more consistent throughout,” Cotten says. “For us, it’s a real differentiator. There really isn’t another packaging company of our size in our region that has the breadth of capability we have.”

Cotten says his interest in the label business was solidified after he attended the Digital Packaging Summit, an annual event hosted by PRINTING United Alliance that offers attendees three days’ worth of content and networking centered entirely on digital label and packaging production.

After talking with his peers in the business, Cotten decided the digital label opportunity was too good to pass up. BP Solutions invested in a Mark Andy Digital Pro 3, a toner-based press incorporating in-line flexographic and converting stations. Because the company’s background is in commercial printing, Cotten explains that the in-line converting processes on the Digital Pro 3 were beneficial, as the company did not need to invest right away in both printing and finishing equipment.

“We were trying to find that sweet spot of affordability and capability, and the Digital Pro 3 made sense, specifically because we don’t have any converting equipment for labels,” Cotten says. “[With standalone digital], you have to buy the press, then you have to buy the converting equipment as well.

“So we were all in $450,000 for the D Pro 3 and all the options we got versus trying to go a different route, where it’s going to be closer to $1 million,” Cotten points out.

Mark Andy was able to connect the company with a similar business in Eastern North Carolina that also added a Digital Pro 3 to its commercial printing repertoire. Having a peer company nearby willing to help BP Solutions get up to speed on the equipment and share best practices was a significant advantage in the early days of BP Solutions’ digital label journey, according to Cotten.

Now, years after the convergence decision, the company’s label and packaging business is thriving. “Every day there’s a new label customer,” he says. “We’re uncovering them left and right. We’ve also done some marketing, trying to get the word out there’s somebody in Asheville that does folding cartons and labels.”

Beyond Packaging

Back in Manchester, Connecticut, Holmes notes that packaging isn’t the only new business Allied Printing Services has ventured into. The 500-employee company dramatically expanded its perfect binding business a few years ago with the addition of a Muller Martini KM610C (Kolbus) perfect binder. This enabled the company to bring a ton of binding jobs in-house — and not just 2"-thick books, but super thin perfect bound books, down to 1/16".

“It’s almost twice as fast as the previous one we had,” Holmes points out. “The quality is much better.”

What’s more, Allied recently added a W+D 320 envelope production system and started making its own envelopes. It can now create custom envelopes with embellishments that make them stand out.
“With outsourcing envelopes, you’re kind of at the mercy of your outside vendors,” he notes. During COVID, it sometimes took 16 weeks for Allied to get an envelope order, and often the quality was less than expected.

The team at Allied Printing Services is proud to be operating a new Koenig & Bauer Rapida 106 X double coater UV perfector press, the first of this type of configuration in the U.S. Shown, from the left, are: John Sommers, president; Kevin Howard, vice president, sheetfed, web and postpress; Gerry Dugan, sheetfed manager; and Jon Kaufman, senior vice president of technology. | Credit: Allied Printing Services

“Being able to control every piece of a direct mail job is important to us,” he says. It enables Allied to ensure the quality and timeliness of its service, which enhances customer loyalty. This is essentially why PSPs around the country are moving toward the convergence model: to keep customers happy.

“For us, getting into the new markets means our customers are doing more business with us,” Holmes explains. And that, ultimately, is what every commercial printer wants.