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Sep 1, 1995 12:00 AM
A look at real-world marketing techniques to profit from digital presses
Go ahead - ask them. Ask your customers what they want. No doubt cost-effective short runs and faster turnarounds would top their wish lists. After all, it's no secret that buyers want their jobs now.
Digital presses, which require no film and thus save money and time, are riding to the rescue of such customers. You've read about their touted benefits - more cost-effective shorter runs than possible with traditional presses, variable imaging (on some), shorter turnarounds and more. To graphic arts firms, these devices are a way to attract new customers, wedge a foot in the door with hitherto unreachable prospects and nab more business in other areas of the shop.
But, what about profitability? It doesn't happen overnight. And it isn't easy. To be successful, you must know how to market this work. After all, the technology is new and potential clients need to be educated about its capabilities. Plus, the short runs in digital printing mean that, to profit, shops must bring in many more jobs than the number necessary to keep conventional equipment busy.
Unfortunately, even owners of these digital presses aren't sure of the equipment's capabilities. How do you market what you don't know?
Yet, one shop cultivated 45 new clients since it invested in digital printing. Another has so many digital printing jobs that it's expanding into a new facility and investing in additional digital presses.
What do these shops know that you don't? They don't look for markets; they create them. They don't wait for clients to suggest projects; they develop products themselves. In fact, some enterprising firms offer a selection of prepared layouts tailored for specific markets.
To boost visibility, another firm might establish storefront locations that accept information or pages and transmit them electronically to a remote digital press. Another business guarantees same-day-or-better turnaround. Still another sponsored a customer contest to devise the best logo for direct image printing.
Finally, sales tactics may need to be altered as well in the digital printing world, as many firms change who they sell to and who they employ to sell this type of work.
Thus far, 200 to 225 digital press installations exist in the U.S., estimates William Lam-parter, president of PrintCom Consulting. Tack on another 40 installations of Heidelberg GTO-DI presses. (Not everyone considers this press a digital one since it utilizes plates and lacks variable-imaging capabilities.) More digital machines reportedly are found in trade shops than printshops since the former lay claim to a wealth of prepress expertise indispensable in operating the equipment.
Users choose among the Indigo E-Print 1000, Heidelberg GTO-DI (and soon-to-be-released Quickmaster-DI), Agfa Chromapress and AM Multi-graphics DCP-1 presses. (Chromapress and DCP-1 models use the same Xeikon print engine; as does an IBM model). The E-Print is a liquid ink offset process while the Chromapress and Xeikon utilize dry toner. Finally, the GTO-DI is a traditional press modified to run digitally. Plates are imaged on the press, which runs waterless.
This equipment is called upon to produce a staggering variety of products, from four-color employee manuals, brochures and sell sheets to sports trading cards, newsletters, catalogs and magazine reprints.
But, does it produce them profitably? "As a whole, we haven't made a profit, although two out of the last eight months have been very profitable," admits Jim Sprinkles, president and CEO of Quality Control Color, Inc., a High Point, NC trade shop that has owned two E-Prints since August 1994. "With two presses and the way we're set up, it takes $100,000 worth of revenue a month to make morley."
It requires approximately one year to be profitable, estimates Mike Floury, manager of electronic systems and new technologies for Batten Graphics (Toronto). The full-service prepress house installed two E-Prints in January to differentiate itself from competition.
"These presses are a large capital investment and have a high consumables cost," stresses Floury. "Also, their short run lengths mean you have to run a mountain of work to pay for them. However, we are seeing more business in the traditional side feeding these presses than we thought; more scans and pages must be assembled, and these divisions definitely are benefiting from the digital presses."
The key to success, most agree, is marketing. After all, the technology is new, and potential customers must be educated about what it offers. "We need to help the market realize it now can affordably run small quantities of four-color process work and bypass the limitations of copiers," relates Paul Soltysiak, customer service manager for Holland Litho, a Zeeland, MI trade shop that recently invested in a Chromapress.
Robert Pierce, president of Quadracolor Express (Rochester, NY), found education important when his clients were hesitant to accept Iris digital proofs for contract purposes and he had to explain that digital printing doesn't require film and, therefore, traditional proofs can't be created. Quadracolor has invested in a GTOFP-DI and will purchase another one this fall.
According to Lamparter, the digital printing market is growing modestly. "I'm optimistic due to recent equipment improvements, such as higher quality, as well as operating cost reductions," he says.
The potential market for digital printed products includes, well, just about anyone, such as furniture companies, real estate and insurance agencies, design firms, restaurants - and the list goes on.
"The market is composed of clients wanting color copies or those now opting for traditional offset but throwing away much of their material as it becomes outdated. It also includes buyers utilizing equipment such as the Xerox Docutech," offers Ivan Nikolaeff of Precise Reprographics (Englewood, CO), which invested in a DCP-1 in December 1994. "This market never was developed before," continues the marketing manager for Precise, which also provides traditional offset.
"The market isn't there; you don't pick up a phone list and know who to call to sell this service," comments Rick Dyer, president of 135-employee Graphics Express, which invested in a Chromapress in August 1994.
There is a way to tackle the problem - study. "We dug up every piece of material that was written on the DCP-I," relates Nikolaeff of Precise. "We study the press and know its ins and outs and where it's cost-effective. For us, digital printing is one of the easiest types of work to market."
Here's one of the most important pieces of advice: "Don't wait for customers to come to you with jobs; create products and go to clients," urges Bob Diehl of Hollis Digital Imaging Systems (Tucson, AZ). The firm purchased two E-Prints in November 1994 to give it an edge as its customers began doing prepress work in-house that they'd previously sent to Hollis Digital Imaging.
Several users have heeded this advice and created preprinted packages tailored to specific markets. For instance, Quality Control Color turned out six different layouts for sell sheets geared toward the real estate market. Once customers choose a prepared layout, Quality Control Color adds images and copy, and prints the piece.
Real estate isn't the only market the trade shop zeroes in on. In fact, Sprinkles dubs his High Point, NC location the "furniture capital of the world." Twice a year the town hosts 10- to 14-day furniture trade shows.
With a digital camera, Quality Control Color employees photograph the furniture at night, download the pictures to disk and ship the disk to designers who produce the layouts. Within days, exhibitors have printed pieces for show distribution. Since the digital press installation, the company handles 10 times the amount of work it produced when it outsourced the printing.
But, "to make money on short runs, you have to sell more than just one project, so we tie together different products," continues Sprinkles. "If we're selling single sheets to real estate firms, we'll also offer business cards, postcards, etc., which we print digitally."
Hollis Digital Imaging also creates its own projects geared toward specific markets, such as sports trading cards for schools. Using a digital camera, employees photograph various high school sports teams, design the cards, handle the typesetting, then arrange for them to be sold by various booster clubs.
Hollis also produces corporate identity packages - mouse pads, puzzles, T-shirts and stationery - on which it prints corporate logos. In addition, it crafts grand-opening brochures for banks, etc., which are sent to thank attendees.
Why are these projects ideal for digital printing? They require runs from 100 to 250 copies, reports Diehl, which are ideal for these presses.
In addition, Hollis Digital Imaging has garnered 45 new customers since it entered this arena, enthuses Diehl.
Here's an array of other marketing innovations:
* American Color, part of Sullivan Communications, plans to establish a storefront in downtown Chicago. Customers will drop off disks, CDs, etc. The company then will download that information electronically to the Chromapress housed in its St. Charles, IL plant and print the job. The storefront will increase visibility and convenience for buyers, relates Sean Sullivan, marketing manager for the shop, which invested in the Chromapress in May.
* Linotext Digital Imaging, headquartered in Cupertino, CA, sponsored a contest for customers to create the best logo for its direct-image printing services, relates Fred Buck, sales and marketing manager. The company, which purchased a GTOFP-DI in June 1992 in order to become a one-stop shop, assembled a direct mail piece touting prizes - $5,000, $1,000 and $500 in free printing were first-, second- and third-place prizes, respectively. Linotext received 100 responses.
* Port-to-Print, which offers creative, prepress and imaging services, instituted a service for same-day turnaround called Fast Track. According to Jim Devine, co-founder, this service seemed a natural for its DCP-1 customers, who obviously value getting work fast.
For these jobs, the client's PostScript file is RIPed, moved to a server and printed on inhouse stock only - but without the usual trapping, proofand customer signoff. (Clients may supply proofs).
The success of these efforts speaks for itself. Linotext is moving into a facility twice the size of its current building and has ordered additional digital presses. One of the major reasons it's expanding? Because it's been flooded with so many jobs management wants to ensure the firm can maintain its turnaround times, relates Buck.
What makes these efforts so successful? "It's just a better way to sell," states Sprinkles of his firm's prepared layouts. "You have to give clients something to touch and see or else they can't get close enough to the product to say 'yes.'"
These layouts, he adds, are simple to understand, which may offset the complexities of digital printing for clients. They're also cost-effective - customers don't pay for the firm to create a brand-new piece from scratch.
Clients aren't just passive recipients of ideas, though. "After hearing our pitch, prospects often come up with their own products, which we then can produce," relates Diehl.
But, these efforts require some sacrifice and work. For example, Quality Control invests $5,000 to $10,000 to create one prepared layout - without knowing how many buyers will express interest.
It's not just out-of-pocket cost. To produce products that truly help buyers, shops must comprehend customers' businesses as never before. "You have to be intuitive about clients' needs and what their hot buttons are," relates Dyer. "You must know their businesses well enough to tell buyers how they can benefit from the technology."
"That's the hardest thing for us, but we do it through a lot of talking," explains Sprinkles. "We may meet with a potential customer and not make much headway, but we have learned a little about what they do. After several meetings and learning more, we figure out how to put a package together that fills the clients' needs."
If these marketing techniques succeed, you could have it made, according to Buck of Linotext. "If you can get this technology in front of people, it sells itself," he comments.
But, it may not be so easy. Selling this work is decidedly different from selling typical graphic arts jobs.
Consider who you sell to. "The No. 1 requirement for selling a digital product is that the clients be time sensitive," relates Diehl of Hollis. "When potential buyers ask how much a job will cost, my chances of making a digital press sale are small. But, when they ask if the project can be completed by 3 p.m. that day, I'm talking to someone who understands the process." He adds that the cost benefit of these presses compared to traditional equipment is narrower than previously thought and exists only at 250 copies or less, depending on the job.
"You're telling traditional buyers, such as agencies and brokers, that instead of making a commission on a 5,000-piece run, they'll make a commission on a 250-piece run. It doesn't appeal to them," says Devine of Port-to-Print. "We also say they'll get commissions on reorders and will more wisely stretch the client's dollar, but that's not always successful. Therefore, while we keep in contact with these traditional buyers, we go to end users and give them marketing solutions as well."
Salespeople also need a different mindset. Take American Color. For years it has focused on facilities management opportunities. It recently inked a $27 million deal to take over a newspaper's color work, as well as manage former inhouse prepress work for local grocery and drug stores, says Sullivan. The firm is accustomed to thinking in millions of dollars. But, when considering digital printing orders, execs must think in thousand-dollar chunks. American had to make some adjustments.
Since the company needed many jobs to fill the Chromapress, it required someone to pound the pavement and man the phones for volume calling. It dedicated a salesperson to the digital press.
Batten also dedicated a sales force to its E-Prints. "Our prepress employees are used to working on large jobs for big volumes of sales. Digital printing is a different mindset for the traditional salesperson who sells $1 million of film per year. In the digital pre-press world, you do $50,000 in sales. We've dedicated junior salespeople to the press because these individuals are less entrenched in the traditional way of selling."
Long-terms results of the introduction of digital presses? Obviously, there will be more four-color printing as the process starts to compete with printing material in one or two colors conventionally, predicts Soltysiak of Holland Litho. "You'll also see much more customization of pieces, a major advantage offered by most digital presses."
Are digital presses right for you? Only you can answer that, but if you're considering the move, develop the marketing skills necessary to generate the large number of short runs you'll need for this equipment. Next, ensure your sales staff understands that digital printing is a different sell and acts accordingly. Go get 'em!
If you're like many graphic arts shops, visions of digital printing are dancing in your head. If you're considering investing in this arena, heed these words of advice from early adopters:
1 Study your digital press. Not even owners know exactly what this new technology is capable of. Experiment with it, learn exactly what it can do and what type of work it best handles.
2 Be proactive. Don't look for markets; create them. Don't wait for clients to suggest projects; develop products yourselves and bring these ideas to clients.
3 Dedicate a salesperson or sales staff to digital printing. You must reel in many more jobs than are necessary to keep busy traditional presses. Salespeople must be available to make volume calls.