ONE-STOP VS. NICHE PRINTERS — SCHOOLS OF THOUGHT
THE WORLD of commercial printing is still quite a big nut. Even with the growing threat of outsourced print and other traditional ink-on-paper products migrating to digital land, there are enough emerging applications to keep most printers fat and happy.
Operative term of the day: Most printers.
There is, however, a contradiction of terms floating about our grand industry that may never be reconciled—after all, it has lasted for quite a while. Some say we are in an era of specialization that plays into the hands of niche players, those who excel in a market segment that is not being fully addressed on a local or regional level.
Others will contend that, in an environment where commodity pricing is wreaking havoc on general commercial printers, it is more important than ever to add as many ancillary services as possible to become a one-stop shop for clients who are increasingly seeking to reduce their core of vendors.
In reality, there’s more than enough room—and need—for both. For now. What about the future? What happens when someone replicates the online VistaPrint model (see cover story) and modifies it to address more mainstream printing applications besides business cards, postcards and brochures?
And what of the future generations of print buyers who have been weaned on the Internet? How will they shop for a print vendor; will long-term buyer/vendor relationships mean anything to them?
“We’re in an era of specialization,” contends Dennis Mason, president of Mason Consulting in Western Springs, IL. “The economics of certain kinds of printing make for specialization. Like a Quad plant that’s set up to knock out Newsweek and Time. Clearly, that’s a specialization, and when that kind of plant is in place, nobody can touch it from an economics standpoint.
“There’s also a place for printers who produce lots of different things—brochures, calling cards, whatever—and their cost structure is such that they won’t be able to compete on a cost basis with people like VistaPrint for a calling card,” he continues. “By the same token, they’re still going to garner some business because of their relationships. As I see it, these general purpose shops are not going to offer the best prices, but they’ll still do business because of factors like location and relationships.”
Clint Bolte, principal of the consulting firm C. Clint Bolte & Associates in Chambersburg, PA, notes that while there have been caveats about becoming a “jack of all trades and master of none,” many so-called specialty printers have broadened their product and service offerings beyond the intended scope of the niche. Perhaps a hedge bet is being all things to select clients.
“Select clients are appreciative of the unique skills and extraordinary services that the printer is bringing,” Bolte says. “The printer is an essential element of their marketing team in fulfilling the print buyer’s marketing objectives, so to speak.”
Still, Bolte has noted the pressure printers have felt from clients who are “clearly looking to printers to be the technical consultant for facilitating all of their graphic communications needs,” including information fulfillment services, mailing and marketing.
In order to meet customers’ partnership needs, he sees the need for general commercial printers to collaborate with “friendly competitors” to provide services beyond the printer’s scope. These friendly competitors may enjoy economies of scale; Bolte points out that there are 13 distinct types of fulfillment services, and even the biggest printers may only offer five or six different ones. In this sense, it is best to partner with someone who has this niche covered.
“If you’re not into it,” Bolte notes, “don’t get into it.”
Here’s a sampling from both sides of the fence regarding niche service providers vs. one-stop shops:
O’Neil Printing, in Phoenix, is a 90-employee shop that was founded in 1908. A $15 million annual performer, its client base is so diversified that no single customer accounts for more than four percent of O’Neil’s business.
Traditionally a 40˝ sheetfed shop serving the hospitality, financial, health and education markets, O’Neil Printing decided to broaden its scope of services five years ago in response to customer demands. In that time, the printer has ventured into mailing, online ordering, full-color digital printing, fulfillment and database management.
“We were seeing a trend toward the printing aspect becoming more of a commodity,” notes Anthony Narducci, general manager. “We have always provided a higher level of service and quality of product to our clients, so we knew we weren’t going to be able to compete on the commodity-only side.”
Its full-color digital solution, added this past summer, helped O’Neil reel in jobs that “we were essentially walking over in our client’s office,” according to Narducci. Having that pride in its offset craftsmanship carried over into the new capabilities. O’Neil took great pains to hire the right people and purchase the equipment that best fit its needs.
“For us, it’s about listening to our clients and understanding their needs,” he says. “We are continuously trying to build efficiencies into our production here, so that we can be more responsive to customers and deliver the highest quality product.”
In Hudson, MA, TecDocDigital is a smaller shop, with 40 employees and sales of $6.5 million a year. Built on providing technical documentation (hence the name), TecDoc- Digital primarily serves the Boston area. CEO and co-owner David Trombino purchased the company in 1995 and sold it to Ikon Business Solutions in 1997. But when Ikon decided to exit the off-site print services market, Trombino bought it back in 2005.
He quickly decided to forsake TecDocDigital’s offset equipment to concentrate on the color digital market, which paved the way into marketing services and cross-media marketing—the combination of print and Internet outlets such as e-mail, personalized URLs (PURLs) and microsites.
“We want to use multimedia resources to help our customers reach their prospects and customers,” Trombino says. “On the print side, we’re trying to focus on the color side of the digital market.”
TecDocDigital has marketed itself through print and digital associations and publications, and has conducted direct marketing campaigns to its customer base. “We’re going to be launching direct marketing efforts to specific verticals to address the customized, cross-media approach as opposed to some of the other options that they may have through Web or traditional direct marketing,” he adds.
Given the way he has positioned his company, Trombino does not sense a threat from the offset community journeying into digital printing.
“From my experience, it takes a long time to turn a supertanker,” he says. “A lot of these firms are going to find that it will take some time to re-educate their sales teams to sell this kind of program. It may entail a somewhat longer sales cycle, and it’s not project-based as much as it is campaign-based.
“We’re looking for customers who have already decided to make an investment in marketing and have an annual budget to do this, so we’re not bidding on one project after the next. We’re really going in at a strategic level to become part of their marketing plan.”
In the case of DigiLink, Alexandria, VA, the company went from specializing in prepress services to becoming a one-stop shop, offering sheetfed printing, finishing and mailing services in addition to the front end. DigiLink, which bowed in 2000, has grown at a rate of 30 percent per year. Although half of the company’s revenues are still generated by prepress-only customers, DigiLink also produces short run, single- and multi-page pieces, brochures and small catalogs up to 56 pages.
All of the non-prepress services have been added in the past four years, a process that has evolved as customers have communicated their growing needs, says Michael Wight, DigiLink president and CEO. The company is about to embark on a postcard marketing campaign, with single-line tags that read, “Prep it, print it, finish it and mail it.”
“Every time we seem to figure out what a customer is looking for, we see another opportunity,” Wight says. “We’re mailing this postcard to illustrate that we are the place to go for one-stop shopping.”
It was Wight’s existing prepress customers who, based on the quality of service they’d received, were intrigued at the prospect of getting their print production from Digi-Link, once again showing that loyalty still counts in this business.
“It’s our expertise in one area that drives success in another,” he adds. “Success breeds success, and once you understand how to provide a high-quality service and product, you just continue to duplicate that. Customers have responded positively to our expanded offering.”
Then there is the niche that is clearly outdated, but those who love old-school technology refuse to let it die. Quality Letterpress is a two-person storefront operation in San Diego, operated by brothers Tim and Matt Butler (their dog, Coltrane, keeps the peace). As its name suggests, Quality is strictly a letterpress shop, with some foil stamping and embossing, providing invitations for brides and ideas galore for graphic designers. Some trade work is also performed by the Butlers; Tim used to work at a print shop, running ABDicks and Multiliths.
“A lot of trade printers don’t want to deal with a bride who comes in and needs 100 invitations,” Tim Butler says. “Most trade printers want to do 10,000 to 20,000 pieces at a time. We felt it would be good to fill that niche and have no minimum run length. And customers appreciate the fact that when they call or walk through the door, they’re dealing with the guy who’s running the job.
“Brides I talk to will order samples off the Internet, and the samples come back crooked and messed up. These women like to be able to come into our shop, sit down and touch the paper, do a press check and actually see the process. It gives them that sense of a hand crafted, one-of-a-kind invitation. In an era of digital printing, I kind of run a throwback shop.”
The Butlers are not in the business of providing fast turnaround, however. Trade shops that rely on Quality Letterpress generally aren’t seeking the lowest prices, either.
“You might be able to get the job done cheaper or faster somewhere else, but it’s not going to look as good,” Butler says. “My feeling is, take your time, do it right or don’t do it at all.”
Curiously, Quality Letterpress doesn’t advertise, instead it relies on word of mouth. It’s a stress-free environment; the Butlers go to work later in the day, leave late at night and enjoy a good deal of job satisfaction in a niche few dare to tackle.
“Regular presses don’t provide that tactile experience,” Butler concludes. “It’s very hands-on to take a blank piece of paper, lock up type individually and space it out. It’s much more creative than burning a plate and throwing it on-press.” PI