14 days of critical information to prepare your business for 2012.
BPIC: One print provider our publication recently profiled [Graphic Systems Group, see here] indicated that his company was aggressively pursuing a “de-coupling” trend – pulling the production away from advertising agencies and bringing it in-house to his shop, so the client becomes his client and he’s not simply an outsource for the ad agency. Have you seen this in action? And do you agree it’s becoming a trend?
Peter Mayhew, Lyra: Yes, we have witnessed a number of PSPs taking this step. But our view is that it’s not for everyone, probably only larger operations. Of greater concern for PSPs should be the need to keep a close eye on the profitability of these “incremental” services.
Art Wynne, BERTL: This is a trend that makes a lot of sense, but it's one that oftentimes requires investing in new people with lots of talent. This endeavor can be costly but has the potential to generate very good revenues. Companies that take this approach must be prepared for some highs and lows as they establish their new service.
Tim Greene, InfoTrends: Yes and yes. This is what we call “moving up the value chain” or “disintermediation,” and it’s one of the biggest challenges and opportunities in this or any industry. If you are a print-service provider that’s being seen as a company that just responds to RFQs, then you are constantly being price-shopped. Some of these projects you will win, some you will lose – but even the ones you win will not be the kinds of plus-margin projects you can increase your profitability on.
Marco Boer, IT Strategies: Ad agencies exist for a reason; aside from their creative contributions that span the range across all advertising modalities, not just wide-format print. It will be challenging for a printshop to become as competent in those creative aspects as they are in the manufacturing of print. However, there’s always a window of opportunity for printshops to add value in the content-creation process on behalf of their customers. There is a balance required. So while there may be a trend toward printshops offering creative services, trends come and go. We would not encourage printshops to base their future on investing in becoming creative content providers.
Dan Marx, SGIA: This sort of “consultative selling” approach – where companies gain a seat at the table and become partners in the process – can be effective for some companies, and will help companies avoid bidding wars where price is the only differentiator between contenders for the work. It’s great work if you can get it – working with the decision makers instead of the bean counters. Having said that, I think this approach requires much more of your sales team: A strong capability in your company’s capabilities, limitations, and scope as this goes far beyond just taking orders and doing the work. Make sure you’re prepared before you start this process.
The Big Picture has assembled five of the marketplace’s most informed analysts and consultants and asked them to help you evaluate the wide-format industry. Each day over the next two weeks, we’ll post a new, critical question from The Big Picture with invaluable answers from our panel – all designed to help you ensure that your company charts its best course for a prosperous year ahead.
Our 2011 panel participants include: Marco Boer, consulting partner, I.T. Strategies (www.it-strategies.com); Tim Greene, director, visual communication technologies consulting service, InfoTrends (www.infotrends.com); Dan Marx, vice president, markets & technologies, SGIA (www.sgia.org); Peter Mayhew, director, Lyra Research Europe (www.lyra.com); and Art Wynne, president, Business Equipment Research and Test Laboratories (BERTL, www.bertl.com).
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