How Six PSPs Overcame Barriers to Growth
While the wide-format segment is diverse in many ways, including the product mix of companies producing graphics, the business models they follow, and the markets they serve, there is comfort in knowing that despite all that makes us different, we are joined by common challenges.
Late last year, PRINTING United Alliance (formerly SGIA) published its annual industry report addressing growth strategies and capital investment. The report for the graphics and sign segment features a listing of what responding business owners reported as their biggest barriers to growth. Using those barriers as inspiration, we take common business barriers, and reach out to individual businesses that have experienced those challenges and done something about them. This article features six micro-case studies, designed to provide strategies and fuel to your efforts. Each concludes with a key concept or idea to consider.
Challenge: Downward Pressure on Pricing
Brian Hite, Principal and Cofounder, Image Options
For Image Options, the quest to control downward pressure on prices is a moving target. The company — which does a significant amount of its work for events, trade shows, and retail settings — has seen numerous competitors move into its space, seeking the higher margins of a less-saturated market area.
Those coming to the space, however, often make the mistake of underbidding on projects — an expensive mistake that serves to drive costs down across the board. Further, customers may not understand the inherent costs and time spent on major projects — some see only price, and don’t understand value. To seek a more rarified space, Image Options moved to the project planning stage, working directly with architects, and often becoming specified on construction plans.
“While that doesn’t necessarily mean we get the printing work,” says Hite, “it gives us a leg up.” For Image Options, the strategy is to have the relationship with the client, to become a valued part of the team, and to truly learn the language of the space they serve. “Vocabulary is key,” Hite says. Success, in this case, is measured by the company’s growth figures, as well as finding themselves operating in a space with much fewer competent players.
For Consideration: What can your company do to escape downward price pressure by operating at a higher level, communicating value, or changing the game?
Challenge: Finding New Customers
Michelle Wilmott, Chief Sales & Marketing Officer, Visual Marking Systems
For Visual Marking Systems (VMS), the effort to increase efficacy in finding new customers was multi-pronged. One initial challenge was to find ways to get its messaging in front of the right people, particularly as cold calling and list purchases were no longer effective. The first move was to begin using marketing automation software, which gave them the tools to carefully qualify their prospects. In so doing, they could more effectively nurture them and focus attention on the right potential customers. VMS has also used LinkedIn Navigator, a paid service, to increase its ability to locate key contacts.
Second, as part of a refresh of its website in 2017, VMS got much more involved in content marketing, using elements, such as blogs, articles, videos, social media posts, and helpful downloads to make the website more active, and to better tell the story of VMS and the markets it serves.
“Thirty percent of the new customers we gained during 2019 were recruited through our website,” reports Wilmott. She says the goal for VMS is not simply new customers, but those that will sustain the relationship and increase their business over time. Therefore, “new customer” and “great customer” are measured on different timelines.
For Consideration: Does your company have a passive or active approach to new customer recruitment and the way it presents itself to the world?
Challenge: Recruiting/Retaining Production Personnel
Kristopher Parks, Director of Print Production for Retail, The Bernard Group
Whether operating within a tight job market or an environment with plenty of applicants, The Bernard Group works carefully to find the right production personnel. As the company grew, Parks noticed that the company’s talent density was thinning. Employees who arrived with experience often needed to be “un-trained,” then re-trained. Seeking a new way, the company decided to not hire based on skills, but to instead hire based on attitude.
Finding the right people, says Parks, requires careful screening, the input of a talent acquisition specialist, and a results-based approach to interviewing. Personality tests, such as Myers-Briggs or DiSC are also used to better understand applicants. Once hired, employees are given extensive training, including written guides, on-the-job instruction, classroom sessions, and a dashboard of standards and procedures.
“As employees gain knowledge,” says Parks, “they add value and worth to the company.” Performance reviews are performed at least quarterly and include two key questions: do you know what’s expected of you and do you have the tools to do your job well? To determine the efficacy of its employee recruiting and retention efforts, the company conducts an annual survey to determine employee engagement, and carefully evaluates the results.
Asked how the approach of the Bernard Group differs from most other companies, Parks say, “At other companies, production employees are considered a number, or a means to an end. When we focus only on numbers, then we lose track of who we are.”
For Consideration: What can your company do to better engage employees by communicating expectations and facilitating effective work?
Challenge: Supply Chain Reliability
Ted Corman, Firehouse Image Center
For Firehouse Image Center, controlling supplies involves strategy and carefully sourcing needed materials. Understanding the supply chain that brings the company the material and consumables it needs, and understanding how to control inventory, makes costly hold-ups less possible. Even amid the recent pandemic, the company was able to prepare though informed, speculative purchases and “standing purchase orders” with suppliers, that warehouse their materials for them.
And while good planning brings good results, the possibility that certain materials either are not, or will not be, available is a cause for proactive communication. “Our customers have been very understanding about the fact that supply-chain issues can happen,” says Corman, “and we’ve been working with them to source the materials they need, for when they need it.”
He says recent conditions have rendered certain materials — specifically quarterinch acrylic sheeting and “step stakes” — difficult to find, with long waits for resupply. “Those companies that waited too long to purchase needed materials are now starting to panic.” He adds that Firehouse Image Center is working with its customers by assisting with design and warehousing print, which is staged to be shipped as individual states re-open for business.
For Consideration: Is your supply chain reliable? Starting today, how many days or weeks could your company effectively serve customers if supply became unreliable?
Challenge: Cost of New Technology Adoption
Todd Meissner, President, Color Ink
Making the right equipment investments can make or break a company, and making the right choice, for a machine that can be successfully integrated into your business with minimal disruptions, is essential. According to Meissner, when Color Ink begins to consider its next capital investment, they start with careful research. “We start with a proof of concept,” he says, “we visit other shops and talk to current users, we run test prints, visit manufacturers.”
Another key element of their process is to get their whole production team involved in the decision-making process. With almost every technology decision they’ve made, this team approach has produced unaddressed considerations that made a difference.
In terms of what Color Ink looks for in its technology investments, Meissner says that more companies should focus not just on adding capacity, but instead on adding capability. “In the past couple of years, we’ve been able to add higher-end packaging and folding carton work,” he says, “and if we didn’t have the capabilities of our embellishment and laser cutting systems, we wouldn’t be doing that work today.” For Color Ink, one key measure of the efficacy of an equipment purchase is the degree to which it helps the company land new business that can be attributed directly to the new capability.
For Consideration: Is your company using careful metrics to determine what equipment it ultimately needs, or is the decision emotional or based solely on brand-loyalty?
Challenge: Recruiting/Retaining Sales Personnel
Rick Mandel, President, Mandel Company
The challenge for the Mandel Company, says Mandel, is that they would find a promising sales person, give them a book of prospects or a couple of accounts, and watch the person slowly fail — the model wasn’t matching the need. The company found that the standard base-rate plus commission model practiced by so many printing companies didn’t sufficiently motivate salespeople.
Today, Mandel Company focuses on a salary commensurate with the skills and abilities of the employee. Further, the company moved significantly away from the cold calling approach, instead opting to hire sales staff who will work to get themselves involved in the community, build their networks, and become partners in helping companies realize their vision and get what they need.
“The goal,” says Mandel, “is to create a buzz and build relationships. We find if the salesperson is a good fit for us, they’ll stay with us for quite a while.” From experience, he has learned that people who come in with a connection-focused personality — perhaps those coming in from sales positions in hospitality or the nonprofit world — often have the right attitude. To measure performance, Mandel of course uses sales figures, but also looks to the number of quotes or partial quotes the salesperson is initiating, as well as the research done into the feasibility of certain jobs.
For Consideration: Is your approach to print sales driven more by cold calls than by workable, valuable connections within your target markets?
While the specifics of the business challenges outlined in this article likely differ from those you’ve experienced, it is important to keep in mind that the companies outlined here all approached their challenges with a commitment to identifying what wasn’t working, finding viable solutions, and making thought-out, lasting change. And that is an approach that will work for every print service provider, no matter the size, shape, or location.