Don't Be A 'Fat-Cat' Printer

My high school football coach had a fat-cat phobia. “Don’t be satisfied with yourselves,” Al Marks warned us incessantly, trying to preserve his team’s competitive fire. “Don’t be a fat cat; be lean and mean,” the sideline czar encouraged, knowing full well the dangers of complacency. That sort of pep talk is what many small- and medium-sized business owners, printers included, need to hear, particularly those who have a tendency to become satisfied with themselves. After experiencing some measure of success, they may take it easy, rest on their laurels, stop pushing themselves, not work quite as hard and even get downright lazy. Sensing this complacency, hungry competitors go right for the jugular—or “coaches” cut them from the team.

About eight years ago, a long-time trade editor at another publication didn’t take digital printing seriously. Digital press technology was so much hype, he contended, with very little substance. He laughed, along with a lot of us, when Benny Landa’s liquid Electroink smudged and rubbed off sheets printed digitally on a beta Indigo press model at Graph Expo. But then HP bought Indigo, and Kodak soon was spending as much money advertising in his magazine as cash-cow customer Heidelberg was, with Xerox and other digital “newcomers” nipping at their heels. Dubbed a dinosaur, the complacent editor was out of a job.

Of course, few industry insiders could have predicted that the pace of change would be as frenetic as it has been. Then again, digital print didn’t just show up overnight.

Offset printers “going digital” are no new phenomena. The “hybrid” print push has been ongoing for more than a decade. The smart firms have diversified—there’s no doubt that digital is grabbing larger slivers of the print pie. Exactly how many of the country’s 36,500 printing companies now offer digital output? Hard and fast numbers are difficult to come by, but here are some to ponder: $13 billion to $20 billion. That’s an estimate of how much digital print could add to annual U.S. printing industry shipments, according to PIA economists. Digital print presently accounts for around 22 percent ($8 billion) of printer shipments—about $36.7 billion—and this volume could grow between 2.5 percent and 3.5 percent per annum.

That said, there’s also no denying that offset print’s chunk still is huge by comparison. Conventional ink on paper comprises some two-thirds of total U.S. printing volume, or approximately $111.6 billion in annual shipments. By 2020, this volume may decrease to between $77 billion and $87 billion, reports PIA—smaller, yes, but still big. These statistics and dollars are irrelevant, though. What matters most is your firm and where you’re at in all this. For those still around who haven’t entered the digital print arena, what are you waiting for? And for those who have, buying the digital box is just the first step. Is your cool-looking iGen, Indigo, NexPress or whatever producing up to its much-hyped potential, or haven’t your “digital services” moved beyond static mailings yet?

The bottom line is that most offset printers who have gotten into the digital space have seen their bottom-line profit increase—maybe not by a lot, but every little bit helps (and adds up), especially in this stagnant economy. Making the change usually is not comfortable, however, and it takes hard work.

The big print players get it and think their businesses are worth the blood, sweat and tears. The $2-billion Cenveo purchased the assets of Clixx Direct Marketing Services, Toronto, from Lombardi Media this past February. Clixx offers direct mail, data management, variable-data imaging and fulfillment solutions to North American clients. The firm operates a 60,000-sq.-ft. facility housing two Kodak NexPress digital presses as well as Digimaster 9110 monochrome and Canon imageRUNNER 110 digital printing systems. Its Stamford, Conn.-based parent firm now supports a fleet of 220 digital presses. Two years ago, Houston-based Consolidated Graphics made a major investment in its digital footprint by buying three dozen HP Indigo digital presses. “Our digital business has been a bright spot during this recession, with digital print sales increasing 8 percent year to date,” stated CEO Joe Davis during the $1.1-billion firm’s latest quarterly earnings conference call.

Smaller firms, too, are getting in on the digital action. Dynagraf of Canton, Mass. expects to grow its digital printing revenue by up to 25 percent with an expansion project that will add four presses and 20 employees. The Mitsubishi, Ryobi and manroland sheetfed and web-offset shop already sports a seven-color HP Indigo 5000 and UV coater along with two monochrome Kodak Digimaster 125’s. On the West Coast, Dome Printing in Sacramento is northern California’s largest privately owned printing company with annual sales of about $30 million. Owner/brothers Andy, Bob and Tim Poole say going digital has enabled them to quote on offset work they didn’t even know about before. They opened Dome Direct, a 40,000-sq.-ft. digital printing, mailing and fulfillment center, in March 2009.

In the Midwest, there’s Multi-Craft, a Newport, Ky. printer serving the metropolitan Cincinnati market since 1955. With 45 employees, the traditional Heidelberg shop treads lightly when it comes to adding new services such as mailing and fulfillment or large-format and digital printing. But when clients talk, Multi-Craft listens.

“Equipment manufacturers pushed the variable factor for years, yet our customers weren’t asking for it,” said President Debbie Simpson. Everything changed four years ago during the firm’s annual customer focus groups, when the conversation turned to short-run color printing and the lack of customer service and attention to detail among digital vendors.

The demand was finally there. Multi-Craft heard its customers’ cry loud and clear, and a new revenue stream was born. The firm added a Xerox DocuColor 250 device in mid-2006 and a higher-volume DC 8000 a year later. Simpson and her management team put together a digital business plan. One of their first new hires was a computer expert. “We needed someone who knew how to manipulate data,” she admitted. The next step was dealing with the sales transition.

It was a total mind shift, Simpson said. The graphic/marketing communications firm no longer sells printing, per se. In fact, Multi-Craft dropped “Litho” from its name last year. “We sell solutions including offset and variable digital print but are not limited to printing,” she noted. “Print can’t stand alone.” The integrated, multichannel approach includes an online portal with FTP, e-mail marketing, PURLs, etc. The adjustment was difficult for the firm’s 10-person sales team because everything was different: the sale, sales cycle, margins. “They had to be trained and educated,” said Simpson, about the finer points of selling to marketing vice presidents instead of to print buyers.

Such change is never easy and often is painful. Simpson praises Xerox for helping Multi-Craft execute its game plan and for making the firm’s digital transition smoother. “We chose Xerox because they had the best sales support,” she said. “The information to educate our sales force and talk to our customers had to come from somewhere, and we didn’t have the time or money to develop it.”

Multi-Craft’s digital printing sales spiked 40 percent in 2008; last year, digital accounted for about 10 percent of the company’s $10 million in annual sales. “Now, we truly grasp the value of one-to-one marketing,” noted Simpson, “and can help our customers strategize programs that incorporate variable text and imaging.”

For ongoing support, “Xerox assists us every day through the first-class sales tools they’ve given us,” Simpson noted. ProfitAccelerator Digital Business Resources are stored on a central server for anytime access by the sales team. “This makes it easy for our reps to research an industry, to know its hot buttons. It has given them the confidence they need to sell our new products.”

Digital Drives Offset
In addition to digital equipment, Multi-Craft invested in a 10-color, 40-inch Heidelberg perfector with roll-to-sheet converter two years ago. “All of our other services—mailing and fulfillment, digital and large-format printing, and Web and design solutions—brought in more offset business,” Simpson said of her family’s FSC- and G7-certified firm, which is now the fourth-largest woman-owned business in Kentucky. (Its 21,000-sq.-ft. plant also features a Komori Lithrone two-color, 40-inch perfecting press.) Later in 2008, the company purchased a Nuvera 100 black-and-white digital printer from Xerox for imprinting offset-printed shell letters. “Digital drives offset,” Simpson said, “and so does social media.” (Online, the firm networks on LinkedIn and posts on Twitter.)

Multi-Craft finds there’s always something new to learn in the digital world, which is why progressive printers can’t afford to be complacent. Simpson has an open mind and the foresight to go back to school, earning a marketing degree in her late 50s.

Other offset print firm owners and managers are short-sighted with limited tunnel vision, while some are just plain stubborn and pigheaded. Whichever type you are, one thing is certain: Digital printing is growing and is not going away. The flexible, lean-and-mean organizations accept this fact and resist the temptation to be “fat-cat” printers.

Based near Chicago, Mark Vruno is a business writer who has reported on the commercial print industry for more than 20 years. Most recently, he was executive editor of Graphic Arts Monthly magazine. E-mail him at markvmail@comcast.net. Readers can follow Vruno on Twitter: http://twitter.com/MarkV_Chicago.


Ricoh Ranked Among Top In Copier Market

In the annual Gartner U.S. copier market report for 2009, Ricoh Americas Corp. was ranked number one for the third consecutive year in the combined black-and-white and color copier segment, earning a 23.1 percent share of the total market for multi-function products (MFPs).

Ricoh also finished first for the seventh straight year in the color copier market with a 26.7 percent stake. For the black-and-white copier category, it finished a close second with a 21.5 percent market share.

These percentages are calculated using total market share, which includes dealer, direct and retail products (Printer, Copier and MFP Quarterly Statistics United States: Database, Cindy K. Masaki, Federico DeSilva—Feb. 17, 2010).

“Ricoh Americas is proud of our continued leadership position in the black-and-white and color copier market in the U.S., driven by the strength of our dealer channel and our direct sales organizations, Ricoh Business Solutions and IKON Office Solutions,” said Shun Sato, senior vice president, marketing, Ricoh Americas.

Ricoh offers a full range of digital imaging products suited for any workgroup environment from SMB to Enterprise, including color and black and white multifunctional copiers, printers, fax systems, scanners, digital duplicators, wide-format copiers and digital cameras.

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