Well, 2008 closed with a whimper after being banged about by recession. This time last year we were all anxious but not frightened. Maybe things wouldn't turn out so bad. Maybe the economy would right itself. Maybe the dire warnings weren't really all that dire. Well, things did get bad, the economy went into a tailspin, and the warnings now seem almost understated.
While the economy was busy tanking, our segment of the printing industry kept chugging along. What were some of the major and minor events of 2008?
On the minor side, Xerox introduced a new logo, Man Roland became manroland, and PIA/GATF renamed itself Printing Industries of America. On the major side, FedEx killed off the Kinko's brand after once touting it as the most recognized brand in the quick printing industry. Other events, in no particular order:
- Staples opened new stand-alone printing centers in the New England area.
- Ricoh introduced two 90 ppm printers, bought IKON Office Solutions, and announced it wanted to become a leading force in production printing by 2010.
- Konica Minolta bought Danka Office Imaging and said it also was determined to be a premier player.
- DHL said it would cease U.S. operations, leaving the field to UPS and FedEx, both of which compete with some quick printers.
- At drupa, green was the color and inkjet was the buzz. Green is still where it's at, but inkjet is a couple of years off.
- The do-not-mail effort got lots of publicity, but no legislative traction.
- Despite the economy, the 2008 Quick Printing Top 100 set a new record with a $2.7 million cutoff. The group had sales growth of 7%. However, the listing was based on 2007 figures. The jury is still out on 2008.
- Attendees at most franchise conventions seemed fairly positive and upbeat, even in the face of economic woes. Of course, those who attend such events are usually the
savvy ones who know how to run their businesses.
- Attendance was down 12% at Graph Expo, but the NAQP Owners Conference drew nearly 250 people, including 39 first timers.
- Oh, and we elected a new President.
Of course, a heck of a lot more happened in 2008 and those events, great and small, contributed to the industry being in the state it is in.
Ours is an industry under stress and stress has a way of accelerating changes. Over the years, we have seen the industry shrink steadily in numbers as those who could not compete fell by the wayside or merged with stronger companies. Meanwhile, industry-wide sales continued to grow.
Today, we are seeing an acceleration of attrition among those shops which had managed to survive in less trying times. However, most of those who continue to exist may have to work hard to keep sales steady—at least for a while. Of course, some printers will continue to prosper even in the worst of times, but it doesn't seem likely that significant industry-wide sales growth is on the immediate horizon.
There seem to be two different opinions on the best way to weather the trying times ahead. One is to hunker down, save your cash, and pull in your horns. That might be a viable option if you actually have the cash to survive. Unfortunately, many do not because they have not been following the basics of business and balance sheets.
The other approach is to look for opportunities that present themselves when competitors fold, customer demands change, or the business climate improves. It has been my experience that the latter group survives tough times much better than the former. That's not to say, however, that quick and small commercial printers shouldn't look inward.
There are any number of areas that quick and small commercial printers can look to maintain or build their sales in 2009. However, each requires more than just having the equipment to do a job. VDP requires some expertise with database management and learning how to sell the value of personalization. Wide-format requires learning how to sell, price, and finish the products. Upgrading production equipment demands a full grasp of the ROI and a solid plan on how to market and sell the output. No matter what areas printers choose to enter or expand, they are going to have to pay much more attention to their sales efforts and staff competency.
Too many print owners seem to be more interested in playing on the computer than in getting out of the office and seeing customers. The old adage that nothing ever happens until somebody sells something to somebody will be more true than ever in 2009.
As the late, great Paris Walker once said, there is no technology or piece of equipment that can rescue a poorly run business. Those printers who once paid more attention to bells and whistles than they did to sales per employee and ratios are long gone. They fell by the wayside because they mistakenly thought buying the latest and greatest technology would be their salvation. Some of these failures were inadvertently encourage by vendors who touted their equipment as the sure-fire path to success. The "buy it and they will come" pitch still surfaces in our industry from time to time, but today most vendors realize they have a vested interest in the success of their customers.
All that said, even the best run business can and must make the most of the technology available in order to adapt to changing times.
What are the possibilities of personalized printing? What is the value of building a digital workflow? How can Web-to-print be used to your advantage? What efficiencies can you achieve by upgrading equipment? How can you take advantage of other ancillary technologies? Finally, how can you take full advantage of the technological tools you already have?
At the 2008 Graph Expo I moderated a panel of Quick Printing columnists that addressed ways to succeed in these challenging times. One of the more interesting topics discussed was how to take advantage of technology capabilities you already have in-house.
One example is estimating software, which at one time was used primarily for pricing jobs. As more capabilities were added, these packages became more like MIS systems. However, many features lie dormant in most shops. Something as simple as generating reports on your top 25 customers, using built-in reorder tickler capabilities, or revisiting your dormant accounts are great tools printers already have on hand.
Most printers have the capability to track overall sales, sales declines, payment patterns, lost accounts, and the health of the balance sheet. Many don't take advantage of this ability. Something as simple as tracking SPE on a regular basis can be a quick way of determining the general direction in which the business is headed.
The Big Picture
There is no doubt that our industry segment will continue to lose shops, but industry-wide sales should stay relatively steady because surviving printers will take in the business left behind by the failures. Larger printing operations are also hurting and their failures could also mean more business for agile and efficient quick and small commercial printers.
It is vital that sales efforts and employee training be emphasized. Successful shops will have to take better advantage of the management and training tools available to them in order to get a leg up on the competition. Production efficiencies require productive employees. These tools are available from a variety of sources including associations, vendors, and online providers.
Even in hard times there can be opportunities. Surprisingly, one recent survey found that a significant percentage of marketing professionals were planning to increase their print spending in 2009. It is essential that printers find these opportunities and take advantage of them.
There is an old story about a small town Georgia man who ran a sawmill. No matter how the economy was going, he dealt for timberland, logged timber, and milled the logs. He ran an efficient operation and tried to buy low and sell the finished wood for what the market would bear. He often said, "Somebody's going to be cutting timber even in a depression, and it might as well be me."