News

RON O'MEARA - 23 May 2008

I have rarely read a more concise yet detailed analysis of the situation that exists today within most organisations. I am not directly involved in the print business but I understand the ramifications of a weak management structure and a slack credit control system. My one observation regarding printers is this , why do you allow such long credit terms?

In this day and age, 30 days is long enough. Any more and you start to suffer.

Colin, I like your note regarding exchange rates and the return against %. Never more relevant than today.

Once again thanks for a really excellent appraisal of the situation .

Julie Cook - 23 May 2008

I'm starting to yawn at the views of Colin Thompson, I've had a look at your website, your ebooks and self promoting b*** S***. Your 22 point plan is this pyramid selling?

Every business is different, you have to realise what you good at then build on it!

The problems at Reed have nothing to do with lack of management, but the market in which they work. It's competitive, they are making the decision to move on or stay with what they have and face a very uncertain future.

I know what I would do!

So Colin Thompson I own a print firm, two customers, 6 employees, 1.4million turnover, establised 12 years. So what would you say about my firm? Should I look for further customers? Should I take a lease for £300,000+ for equipment just so I could look for another customer or two.

PS Where are you working? Do you know Reed, do you know Proctor and Gamble, I think not!!

Julie Cook - 23 May 2008

Another twist on Colin Thompson remarks, sometimes it doesn't matter how hard you work, the management you have, the business model you have in place or the fact that your customers pay on time. The print trade is hard, you can print at cost but I'll be able to find someone who'll print cheaper. It's S*** I know but it's something I've learned to live with, I'm only fortunate that I have two good customers.

Mark Smith - 25 May 2008

In essence, Julie Cook is quite correct. The print industry (certainly in the UK) has become a "commodity" only industry, with very little respect, from clients, for service, quality, or expertise. Add to that the fact that some printers will print for cost, and, at times, below cost, to keep presses running and you have a no win situation. It has little to do with credit terms or weak management; everything to do with an industry that is turning in on itself because of the buying process and perception of print as the dirty end of the creative process. A great shame.

Matthew Parker - 27 May 2008

Mark, the UK print industry is a commodity industry but there is no reason why it cannot evolve. I know of a few printers who offer very good value added business models and therefore maintain a good rate of return on their core print. However, it is sad to say that many printers do not seem to want to develop in this direction. Print Management was a market ripe for development and most printers sat back and let independent companies develop it.

Matthew Parker

www.printandprocurement.com

Julie Cook - 27 May 2008

To Matthew

Print is now a commodity business, our firm has evolved into nursing our two customers, I've been a printer since the age of 16 which in terms of years I don't wish to disclose. Our firm has evoloved from taking work from bob the builder to nursing two big spenders. What I am trying to get across is that I certainly can not compete in the print trade, for example a current job that I have completed, we charged £12,200 I had a look at that freeprintmanagement website and found I could subcontract the work out for just over £3000.

I'm afraid my paper bill for that job comes over £4500 so how can printers compete with that.

It's one thing cutting costs to get a job but you can't compete with firm that can print, laminate, fold, gather and bind for less than you paying in paper, and all this is in the UK.

- 28 May 2008

How to Stay in Business and be Successful

Print organisations are being told to tighten their belts and prepare for a bumpy 12 months + as the developed world falls into a recession. Experts are calling for a slow down in the economy and the printing industry may see a faster shakeout of marginal print organisations in the coming months. Print organisations who have been hanging on by their `fingernails` because they were unable to generate sales, failed to adopt new technology and procedures, never had their financial house in order, no people training and no business models will be closing their doors and disappearing very soon.

But there is good news for the industry. As marginal print organisations close, their customers will have to find new printers. The surviving printers are going to have an opportunity to increase their sales volumes and demonstrate their value to a new set of customers. Customers still need printing and with fewer choices, the surviving print organisations will be in better shape to control the buying process. So, invest in the `right` people of any age, more training, the `right` business models and equipment that you really need!

Pricing

Why are printers going out of business? Many do not charge enough and built their entire marketing strategy on being the lowest-cost producer selling commodity products. As customers begin buying printing from the surviving printers, they are expecting to pay higher prices because they realise a printer must sell products and services at a price that includes a profit. How much do you expect prices to increase on your print projects in 2008 compared to 2007 (due to paper, energy, transportation, and other costs)? We believe `Sixty percent` of the buyers expected prices to increase more than three percent in prices. Buyers are aware of the market conditions, so talk solutions to help each other be successful!

`Printers who can help customers overcome the pressures they face the slow economy will add a value. Customers will pay for that added value and everyone will profit`.

Customers will continue to attempt to negotiate lower prices from a printer, but they are in less of a position to demand lower prices because the low-ball print organisations are no longer in business. The remaining printers need to develop a backbone and price work profitably. Customers have seen what happens to printers who offer cheap prices. They go out of business.

Print organisations who can help customers overcome the pressures, they face the slow economy, will add a value. Customers will pay for that added value and everyone will profit. So, discuss solutions and partnerships for both parties to be winners!

Leverage New Technology

Some printers have gone out of business because they have failed to adopt new technology and techniques. The failure of some printing companies to find ways to make print buying easier or produce work more efficiently helped them to shut the doors faster. Many of the failing print companies used the excuse that they couldn’t get their customers to use the new technology or that the customer didn’t see a value in any new procedures.

In another survey we have looked at, it asked its members to rate how effective they believed that print suppliers are at communicating meaningful differentiation from their competition. Seven-five percent of those responding ranked their print suppliers as fair or poor. From the responses, it looks like it wasn’t that the customers needed the new technology, but it was because the printers were either unable to explain the value of the new technology or ever told them about it.

The remaining print organisations will need to get in front of the customers and demonstrate the value of the new technology. The new technology makes it easy for customers to buy printing and allows them to get better service, but customers aren’t going to change unless they have a reason. Solutions are the key focus for success by both parties discussing the requirements needed.

Printers can put a value on new technology and techniques. The printer can show a customer how to prepare a file properly so it will enter the workflow easier and faster. If the customer takes advantage of the new procedures, the printer can lower the price for the customer. If the customer wants to use older techniques that makes it more difficult for the printer and adds time to production, he will have to pay a higher price. Printers need to use the cause and effect of new technology and procedures and place a value on using techniques that makes buying printing easy for everyone.

Avoiding the commodity trap

Printers have to move away from price sensitive commodity work and go after the less-price sensitive printing that helps a customer sell something

Many companies will try to sell themselves out of a recession. Operating funds will be shifted to sales and marketing efforts as competition for a customer’s money increases. This usually means more marketing printing and mailing as advertising increases.

Printers have to move away from price sensitive commodity work and go after the less-price sensitive printing that helps a customer sell something to somebody. New technology allows printers to provide customers with short-run, high-quality, full colour advertising and marketing pieces with a high return on investment. Even small companies can afford targeting their message because of the production efficiencies offered by most printing companies. Add any variety of web-to-print solutions, such as PURLs or VDP, and any size print shop can give a customer a reason to buy more printing. The printed material will have a higher value in the customer’s mind and the printer can charge more for it.

There are some printers who looking forward to the coming year because they can move quickly and help their customers overcome their recession woes. All it takes is pricing discipline, a commitment to demonstrate the value of their company and its technology to the customer, and a focus on the customer’s real need of increasing and maintaining his sales during the recession.

Colin Thompson

Cavendish

www.cavendish-mr.org.uk

Matthew Parker - 29 May 2008

To Julie,

It sounds as though your business has succeeded in maintaining your two core customers because they realise that you are "nursing" them, and providing value and service to them which means the risk of change is too great for them to consider. If they can buy the work elsewhere cheaper but wish to remain with you despite this then you are achieving a service that relies on more than just commodity pricing.

Good luck!

Matthew Parker

www.printandprocurement.com