New Study Explores Printers' Market Challenges and Strategies

To uncover the key actions print services providers (PSPs) are taking to accommodate customers’ buying preferences, NAPCO Research analyzed the print buying patterns reported by 182 printing firms responding to an online survey of Printing Impressions’ readers. The research, sponsored by SGIA, gives valuable insights into how printers view market challenges and the strategies they are embracing to address them.

Placing Focus on Services, Customer Engagement

An ongoing industry challenge confirmed by respondents is the predominance of price competition: 75% of respondents identified it as a critical or a moderate challenge to their operations. Meanwhile, better than half (56%) saw declining use of print as a critical or a moderate challenge, closely followed by the difficulty of differentiating product/services (50%) and the migration of print to electronic media (47%). All of these challenges have PSPs looking for better ways to differentiate themselves from the competition with new services and improve customer engagement.

High Demand for Marketing Collateral

Looking at the types of printed products customers buy, respondents identified applications that support sales efforts as the most popular items purchased. The survey asked respondents to describe the level of demand for key print products. Respondents reported highest demand for the following print applications: marketing collateral (51%); direct mail (37%); postcards (35%); business cards (37%); and display graphics consisting of signage, wraps and banners (31%). (See Figure 1 below.)

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Based on the survey responses, it’s safe to infer that the shift to digital media hasn’t erased the demand for tangible forms of communication that consumers still find persuasive and that marketers still regard as essential to include in their promotional budgets.

Increasing Demand for Services

A common tactic pursued by many printing firms to grow their businesses and differentiate themselves in a price-competitive market is to add ancillary services. According to survey respondents, the ancillary services customers request most consistently are art/design/creative (cited by 73%), mailing (69%), fulfillment (65%) and prepress/premedia (52%).

Strictly speaking, in today’s highly competitive market, these activities are no longer “ancillary” in the sense of being optional: they’re services that PSPs must offer their customers if they want to stay competitive.

In lesser demand, but still significant as service offerings, are Web storefronts (31%); Web-to-print connectivity (30%); digital asset management (20%); and database management, including data hygiene and analytics (20%). These services will likely grow in demand as customers become more comfortable using them and the advantages they yield. One area likely to drive demand for data services is the rise of digital printing — particularly inkjet — as it promises competitive differentiation for firms that can achieve mastery of the data that digital presses run on.

The survey also found that respondents reporting sales growth of 10% or more tended to offer these sophisticated services to a greater extent than those with flat or declining sales. These included the four categories mentioned above, along with Website design, hosting and SEO; social media marketing; and 1:1 cross-media marketing. All are forms of customer support that create new revenue streams and forge strong customer relationships.

Ordering, Turnaround and Delivery

A key research objective was to find out whether customers are comfortable using Web-to-print (W2P) channels and online storefronts for ordering printed products and tracking job status, or whether they prefer direct contact with a printing salesperson or a customer service representative. The answers were revealing.

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Respondents said the top three ways in which their customers order products and services are by email request for a job quote (87%); by phone call to a sales representative or a CSR (76%); and by a face-to-face meeting with a sales rep (58%). (See Figure 2 above.)

Online storefronts, Web-to-print interfaces and mobile phone apps have been less widely accepted by customers as channels for doing business with printers. But, they are poised to grow in popularity as customers increasingly require faster turnarounds, shorter runs, better brand management, and greater control over costs and ordering.

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A key factor that may drive demand for online ordering is customer demand for faster production speeds. Nearly three-quarters (73%) of respondents said that the demand for shorter turnarounds was increasing. (See Figure 3 to the right.) Close to two-thirds (62%) indicated that their customers expect turnarounds in less than three days — delivery pressure that can only intensify as just-in-time (JIT) ordering and minimized inventories become standard methods of print procurement.

Because online ordering helps to facilitate both the JIT and short-run trends, it’s reasonable to assume that this type of customer interface will trend upward as well. It certainly appears to be what the survey respondents anticipate in forecasting that, on average, the share of their volume generated by Web-based ordering systems will rise to 26% during the next two years.

The confidence respondents place in Web-to-print can be measured in what they identify as the five most important benefits of using the technology: achieving a more automated workflow (49%), adding new customers (48%), shortening the buying process (40%), enabling order and workflow automation (37%), and increasing order volumes (35%). (See Figure 4 below).

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Embracing Non-Traditional Services

Although traditional products remain important, the most astute firms are also concentrating on opportunities in non-traditional areas of service that bind customers to them and burnish their reputations as tech-savvy partners to do business with.

Respondents to the survey have shaped their strategies for growth along these lines, and they are acting on them. More than three-quarters (77%) somewhat agree or strongly agree that they have expanded the range of print applications they offer. Nearly as many (76%) say they have broadened their portfolios of services in an effort to become one-stop solution providers to their customers.

Similarly, high percentages report forming partnerships, making marketing and technology investments, and targeting specific vertical industries as means of differentiating themselves from the competition while keeping their customers close.

What Is the Bigger Picture?

The full survey report explores everything touched upon in this article in deeper detail, but the takeaway from these highlights is clear. The nature of the demand for print has changed and, in some ways, it has never been more challenging to meet.

But printing firms, keenly aware of what their customers now expect of them, are adjusting their offerings of products and services to conform to the new patterns of demand. They’re making similar changes to their methods of customer engagement and support. They know that honoring their clients’ buying preferences is the surest way to establish themselves as preferred providers — a distinction they work hard to win and keep every day.

Click here to access the results of the complete study, "The Impact of Customer Buying Preferences on the Commercial Printing Industry."