Our industry is likely to grow in 2012 for the first time in five years. And we are likely to continue growing right through the middle of the decade, as we enter our first sustained upturn since 2004–2007. Once that would have meant good times for everyone left standing. Now we either prepare for recovery—as opposed to just surviving recession—or we get left behind.
Preparation begins by accepting that we are becoming a new industry. We aren’t going back to what we were, no matter how vigorous or enduring the recovery ahead. We can no longer assume that if something works it will continue to work because we can no longer assume that tomorrow will look like today. And we can no longer prosper only by getting better at what we’ve always done.
Paving the New Road
What can we do? We can capture the opportunities our new industry offers by cultivating new mindsets, approaches, and models and by, as one NAPL State of the Industry participant told us, “challenging how and what we are doing—in all aspects—on a daily basis.”
Our research group also tells us that recovery from the Great Recession continues to be painfully slow and maddeningly inconsistent. Over 36 percent now expect business to improve during the six months ahead, up from 16.9 percent last November. But those expectations are qualified by comments like this: “Just when we get going, everything slows down—then picks back up, then slows down. We just don’t see any consistency to recovery.” And while 53.1 percent report sales grew in January, up from 14.5 percent at the Great Recession’s deepest, just 28.4 percent report prices rose and just 29.6 percent report profitability rose; reinforcing that business is still far too weak to restore pricing power and margins.
Expect business to continue improving in fits and starts as 2012 progresses. For the year as a whole, NAPL expects our industry’s sales to grow one percent to three percent—maybe a little more if prices firm and the economy surprises to the upside. That would be our first growth since 2007. But even if we finish at the top of that range, sales will still be 21 percent below pre-recession levels and 23 percent below the all-time high set back in 2000. We also expect sales to continue growing by an average of two percent to three percent per year right through the middle of the decade. (See the NAPL State of the Industry Report, to be published in April, for a discussion of why.)
Once that would have been all we needed to know because once in our industry a rising tide lifted all boats. Now no one—no matter how big, established, or successful in the past—is guaranteed a share of recovery.
The good news is that many companies recognize that. As evidence, consider how NAPL State of the Industry participants responded when we asked what they plan to do to make 2012 better than 2011:
• 85.5 percent plan to take a new approach to marketing. That includes everything from redesigning the company website and social media campaigns to greater community involvement and a more targeted, personalized approach to direct mail.
• 71 percent plan to deepen their relationships with clients by moving beyond the sales rep/print buyer connection. The goal is to lock clients in by understanding their world better than the competition does. Among the questions they want to answer: What are the client’s communication objectives? How can we help them achieve those objectives? What new approaches and solutions can we offer? And how can we ensure the client recognizes our contributions to their success?
• 69 percent plan to streamline workflow and processes by reducing steps, touches, and time between steps. They know that despite record consolidation—we’ve lost more than 3,500 establishments since 2007, an 11 percent decline, and more than 10,000 since 1998, a 28 percent decline—our industry is getting more competitive, not less competitive.