It is no secret that the past year has seen one of the worst economic downturns in history. Businesses are failing, unemployment rates are soaring, and hardly anybody has money to spend. So, if you’re a manufacturer, the question becomes “How do I keep my clients happy and profitable while the economy around us is collapsing?” Luckily for manufacturers of wide-format flatbed printers, the versatility of the product and some emerging markets are helping the cause. But add-ons such as incentive programs, financing options, and educational courses may be the ticket to success.
With the slowdown in the overall market, Chris Howard, vice president of sales and marketing, Durst, said the printing volume demand has not grown at the rate over previous years, which of course has an effect on the need for additional printing capacity in total. Howard said the company has found that a number of clients have still invested over the past months in order to meet new customers’ needs for printing capacity and capability. “Overall, the market that we serve is still finding demand,” he said.
While many companies have tightened their budgets and decided not to invest in new equipment, it has become imperative for manufacturers to find ways to keep their customers happy. One of those ways is to offer incentives and/or assistance to their clients. “Our focus has continued to be on discussing production efficiency that the Rho platforms offer, which some customers find to be the right incentive to match their business needs during this economic cycle,” said Howard. “We think the primary goal is to make sure that the equipment matches the business need so that it becomes a long-term, positive investment.”
Another key is making sure that your clients are running their equipment as efficiently as possible. “By doing this, they cannot only lower production costs, but increase capacity for additional growth,” explained Howard. “We spend time on this subject with our customers to help them maximize the investment that they have made.”
One positive side effect of a down economy is that it forces companies to search for new business opportunities. “The longer print run space is a market segment that is now being tapped into with flatbed technology,” said Howard. “This offers the digital print providers new growth.”
Terry Mitchell, marketing director, Fujifilm Sericol USA said the current economy has reduced the demand for print, and therefore many printers who have adequate capacity, and can produce the quality expectations of their customers, are simply delaying purchases of new equipment.
“Some customers are reluctant to invest in new equipment without the assurance of having a contract for work already in hand,” said Mitchell. “Although this reduces the risk related to making new payments, printers that continue to ‘get by’ with equipment that does not deliver the quality, or lacks the capability to produce what print buyers demand, or does not enable the printer to be price competitive, may lose jobs to competitors that do invest in new equipment.” Mitchell pointed out that some customers who need to replace older, outdated equipment with new equipment are also having difficulty in securing local bank financing.
To help their customers, Fujifilm is offering delayed payments, or reduced payments for the initial finance period (first six months) to help provide an incentive to invest. “We have an in-house finance group who organize long-term financing options with external lenders at very competitive lease rates, and we also offer trade-ins where the older equipment serves as the down-payment on the new equipment and reduces the capital cost of the new equipment,” explained Mitchell. “We also have the capability to bundle a customer’s ink volumes into the purchase of a printer so they can best leverage their overall purchase dollars.” Mitchell said several presses are bundled with software or extended contracts on ink as a “package” that offers price discounts as an incentive to invest in new equipment.
Even if customers cannot afford to invest in new equipment, Mitchell said their existing flatbeds should be good enough to help them weather the storm.
“Flatbeds have the unique capability of producing printed output that simply cannot be cost-effectively produced, or produced to the quality expectation of the customer, when compared to other print devices,” explained Mitchell. “Printing direct to board, rather than printing on flexible substrates eliminates the need for mounting and laminating. This provides flatbeds with production and cost efficiency compared to roll printers, and allows printers to effectively utilize available labor and maximize profitability.” Mitchell added that focusing on high value-add print applications is another way to grow profitability. “Backlit signage, double-sided prints in register, and lenticular or 3D images are examples of high-value applications that can be cost-effectively produced on flatbeds capable of producing such output,” he said.
Fujifilm also assists their customers by introducing new products that may help identify new market niches. The company recently introduced a flatbed printing application for CDs and DVDs that has been well received by customers who were previously printing either screen or offset. Mitchell also sees increased demand to print industrial applications such as graphic overlay panels using digital flatbeds.
“Our customers challenge us everyday to develop new and unique print applications on our flatbed equipment,” reported Mitchell. “Since flatbeds allow you to print on thin or thick materials as well as materials that are not exactly flat, we see a growing application for flatbed printing of ad specialties and home décor such as doors, window blinds, and tiles.”
Continual improvements in digital flatbed output quality have also created new opportunities to cost-effectively produce artwork on pre-stretched canvas and fine-art museum pieces in large formats, according to Mitchell. “The addition of cutters and routers also creates opportunities to print and produce custom double-sided cutouts, shelving, and even modular furniture,” he added.
“Customers are taking their time when making purchasing decisions now more than ever,” reported Claudia Barbiero, HP Graphics Solutions Business, Signage Segment Marketing. She said customer decisions are based not only on products that will meet their business’ production needs, but also on what products give them an immediate differential, such as a way to tap into new markets with different applications and capabilities; enhanced quality and processes that lower the impact of printing on the environment; or products that will help them streamline their operations by offering better efficiency and margins.
“This is the time for PSPs to take advantage of the opportunity to streamline business operations and manage costs,” said Barbiero. “One could get by with what they have, but the companies that are improving their productivity, streamlining their operations, and adding new technologies that make them more agile and environmentally friendly, and that open them up to new markets, will be in a position to leapfrog those that sit and wait.”
In order to meet they myriad needs that their graphic arts customers have, HP offers a broad portfolio of promotions and offers, including financial incentives, training and consulting and environmental programs.
One of these incentives customers may find especially compelling is the “Cash In and Trade Up” program for HP Designjet Printers with savings of up to $3,000. “A recent enhancement to the program gives customers the option of keeping their trade-in product, while still getting the promotional trade-in value for a new purchase, giving them the added advantage of adding new technology and production capacity to their environment,” reported Barbiero, Alternatively, customers can donate their old “trade-in” product to a local charity for tax benefits.
For customers interested in HP Scitex products, the HP “Expand Your Possibilities Program” offers several incentives. “It gives customers the opportunity to own the latest, highest-performance technology in the industry with big savings,” said Barbiero. Other financial offers include special financing offers such as 0% financing for lease or ownership plans, pay as you grow plans with low initial payments and an “acquire now, pay later” promotion with no payments for the first 90 days.
In addition to financial incentives, HP also offers free education and consulting to help its customers. “The value of these offers is up to thousands of dollars in free consulting and training,” said Barbiero. “Specific offers include free Business Consultation and ROI analysis for HP Large-format Commercial Production Printers; the HP Learning Center, which offers free, instructor-led classes designed to help large-format printing companies succeed; HP’s THRIVE campaign and free eBook: ‘9 Steps to Achieving Market Success;’ and last but not least, HP’s environmental program, which offers free shipping for recycling of ink cartridges. Additionally, HP’s Planet Partners program also offers free recycling for banner media.”
One of the advantages that print providers who carry flatbed printers have is the versatility of the products. “By leveraging features such as white ink, the ability to print multiple boards with different images and roll-to-roll options, PSPs can expand their offering to customers, maintain high productivity and increase their flexibility to meet end-customer needs,” said Barbiero. To take full advantage of this versatility and see positive business results, she said it is essential that PSPs educate their sales force, so that they are equipped to promote flatbed capabilities. Letting end-customers know about additional capabilities can help PSPs capture additional components of their printing needs where they may not have been playing already.
Barbiero reports that UV-flatbed technologies have opened the door to a wide variety of new applications. “From unique POP displays, event graphics and new design applications, such as printing directly to glass, wood, ceramic, and more, there are many ways PSPs can grow in niche segments by offering their customers innovative applications with a quick turnaround time,” she said.
Océ North America customers are being more diligent in selecting products that represent the best value, reliability, and versatility, according to Randy Paar, the company’s Display Graphics Product Manager, adding that proven products from established companies are a safer bet. “Customers want to know that a strong company is behind the printers on which so many of their livelihoods depend,” said Paar. “Customers are also looking towards printer vendors for more help in developing applications knowledge, so they may further their own businesses.”
To help their customers through the tough times Paar said Océ has offered special promotional pricing packages, plus more favorable financing options such as step leases. “We have also started providing training to our newer customers to be able to quick-start their new business opportunities once they buy a printer,” he said.
Paar also said that it is important print providers do what they do best…sell printing. “They should explore what type of products they can produce with their equipment to provide better returns,” he said. “For example, printing ceiling tiles, tabletops, custom furnishings, etc.—these can be sold at a premium to maximize profitability. Print providers should consider taking more of a short-run manufacturing approach. The sky’s the limit!”
EFI VUTEk Value
In April, EFI announced the EFI Stimulus Package, financing program for its VUTEk line of superwide printers. The EFI Stimulus Package helps qualified print service providers grow their businesses and protect their cash flows. The program provides for zero out-of-pocket costs for the first six months of ownership followed by 50 percent off of the normal lease payments for the next six months on new qualifying printer purchases dramatically lowering the first full year cost of ownership This new program is expected to boost businesses’ abilities to expand their product portfolios and reach larger revenue-generating customer bases with minimal impact on cash flow for the first year of ownership.
“In this challenging economic climate EFI is focused on finding creative financing solutions that will allow our customers to own the industry’s best printing solutions,” commented EFI president Fred Rosenzweig. “The EFI Stimulus Package for VUTEk superwide printers allows print businesses to position themselves ahead of the competition by expanding their product portfolio and customer base, all while spending less cash.”
“The EFI Stimulus Package allowed us to economically acquire new VUTEk QS3200 technology that will help grow our business with new and more lucrative revenue opportunities without the immediate financial pay back pressures,” added Chris Wilson, Venture Printing chairman.
The EFI Stimulus Package is currently offered exclusively in the United States. Global finance programs will become available in the near future.
The tough economic times have been a bit different for WP Digital, which is now within the WIFAG Polytype Group. “Our wide-format printer division has been reorganized,” said Michael Albrecht, vice president of sales & marketing, Digital Printers, WP Digital. “Therefore, we are entering the US market under a new perspective. Our products for the US market are being manufactured in Switzerland and have been completely re-engineered.” Albrecht said they can see that some customers postponed their decision to buy new equipment for a later date, but despite the poor economy, WP Digital has already delivered one of its new products to the East Coast and have many good prospects ahead.
Albrecht said print provider should realize that profitability could only be guaranteed by having a high reliable product without down time. “This will allow you to add additional shift(s) that will drastically improve your profitability,” he said. “It is also important to be versatile and to be able to print different type of jobs (flatbed and roll to roll), which are products allow our customers to do.”
Albrecht believes industrial applications will help WP Digital’s customers improve their competitiveness in the market. “Our product is specially designed for that as it can handle substrates up to 3.7 inches high and carry weight up to 10 pounds per sqft,” he said. “For example, it enables you to print on glass, wood, or any other special substrate.”