I had the privilege of conducting and producing the 2012/13 NAQP Digital and Wide Format Pricing Study, so I want to share some of the survey findings and my thoughts on the results. In Part Two, I will offer advice on how to use the results of that study for your company’s benefit and profits.
Here are some of the statistics and results from that study with my comments:
• We had 290 participate in our survey. We eliminated duplicate entries, very incomplete surveys, or obviously wrong data.
• We attracted a wider participation base than earlier surveys. We not only had more large shops take the survey, but also more shops that were totally digital, sign shops, or wide-format based.
• Participation was evenly spread throughout the US, with the average shop being 32 years old. Certainly the ownership is aging—it is no surprise that mergers and acquisitions are booming right now.
• The average sales revenue is almost $3 million, although the median was $877,500.
I believe it is true that the big are getting bigger at the expense of the smaller companies. I believe that the disparity between small and large companies will continue to widen.
• Amazingly, the average participant is anticipating relatively significant sales growth in 2013. In fact, 71.3 percent responded that they anticipated higher sales, and another 9.2 percent expected flat sales. Participants of these surveys do, though, tend to be the industry leaders and not the laggards, so I don’t believe the entire industry is showing these same sales trends.
• The average sales per employee (SPE) was $125,462, which is slightly higher than the 2011/2012 NAQP Pricing Study. Larger companies have more productive equipment and more volume, so it’s not surprising that their SPE was $139,004.
• 35.6 percent of the participants belong to either NAQP/NAPL and/or PIA. 17.3 percent indicated they are franchisees, while 67.3 percent responded that they are independent.
• Only 7.4 percent indicated that they belonged to a peer group. My experience has shown that a majority of the leading companies in the industry are in a peer group, so I was surprised by the low percentage.
• By far, the most stunning statistic is that 22.2 percent of all the survey participants still do not use estimating software. Further, another eight percent are using homemade systems or spreadsheets for estimating.
I find that hard to believe as print estimating software has been available for more than 30 years and the cost to install and train is far less than the cost of labor to do manual quotes, not to mention the consistency and accuracy of computer estimating.
• We were surprised that 60.3 percent of the participants use 54-inch or larger units. The trend is that the smallest wide-format printer to install today would be a 54-inch, and most would buy a 64-inch or wider.
• This study is the first to include data about which wide-format substrates are most commonly used. A majority of the participants print on more than poster paper and banners. We will include more substrates such as wall covering, floor graphics, back-lit film, car wrap material, and others in future surveys.
• The trend for printers to move into producing signage is escalating. Most installed wide-format printers to simply output posters and banners, only to realize that the printers can print on dozens of substrates. This movement parallels the fact that some sign companies are starting to sell digital printing.
Digital black-and-white pricing has not changed much since the last survey, but color digital pricing has decreased about five percent on average. Two reasons for the decrease are increasing competition and printers handling larger volumes, which decreases their overall cost per impression.
Digital and wide-format printing both continue to be growth areas for most printers. I believe that the leading printers will continue to grow these departments. Many printers commented that they have added digital print volume by taking work off of their offset presses, or they are producing previously outsourced jobs in house.