VDP Supplement: Hard Lessons Learned
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Certainly, something has changed. Many of today’s top printers are offering Web-to-print capabilities, and many leading-edge marketers, especially those in the financial and pharmaceutical industries, are rapidly embracing them. Has the ability of printers to more easily (and inexpensively) allow customers to personalize and customize marketing collateral, rather than offering only basic fulfillment of static and moderately customizable documents like corporate identity materials, made that much of a difference? Yes, and no.
To a certain extent, the ability to more cost-effectively create personalized and customized marketing collateral has opened a host of new opportunities for Web-to-print. But that, in itself, isn’t the answer in full. It has more to do with the printing industry’s change in business model from print manufacturing to marketing service provider to complement the change in the way customers use—and, more fundamentally, think about—print.
As printers begin to understand this shift and adjust their own business models to become more consultative and marketing- oriented than being strictly (or even primarily) focused on production, they are learning how to change their relationships with customers and position a variety of print- related (but not directly manufacturing related) services to fit within these new marketing structures.
Thus, being successful at Web-to-print involves a lot more than simply buying the right software and hanging up a shingle. There have been a lot of hard lessons learned by those who have paved the way. Let’s take a look.
1. Web-to-print exists successfully within a larger shift away from manufacturing and toward marketing services.
Of all the lessons learned, this is the most critical. One of the characteristics of leading Web-to-print providers is a fundamental commitment to marketing-oriented business models rather than manufacturing ones. This is a commitment that starts at the top, from the highest levels of executive management.
For a long time, the industry has been talking about a shift from “printer” to “solutions provider” and the need to transition to consultative selling and business development. This transition is finally taking place. The printers that have embraced Web-to-print with high levels of success are fundamentally different kinds of companies.
They are staffed with marketing and business development people focused on developing customer relationships and brainstorming applications (and charging for it). The fact that they print those applications is almost secondary. Web-to-print doesn’t cause this shift. It is a consequence of it.
2. Your biggest investment won’t be in software—it will be in people.
One of the biggest surprises consistently cited by successful Web-to-print providers is that their greatest investment in the success of these applications has turned out not to be the software itself, but the people to run them.
They aren’t talking about marketing and business development specialists, although that’s part of it. They are talking about designers, IT specialists and programmers.
What many Web-to-print specialists have found is that, while there are a lot of similarities from one Web-to-print application to another, every customer wants something slightly different. Different shipping options. Different proofing processes. Different workflows. Updates to templates. Programming for 1:1 personalization.
In order to offer the kind of flexibility and attention that customers want and need, this requires a dedicated staff.
3. There is virtue in homogeneity.
Although having the capabilities to do custom programming and handle even the most unusual customer requests is an important part of the Web-to-print equation, equally important is the need to balance customization with homogeneity. While this might seem counter-intuitive—especially in light of the need to differentiate from the competition—this is a critical element of profitability.
One of the important lessons from those who have been there, especially those who have developed their own highly flexible proprietary solutions, is that custom builds can wow the client, but each build requires a certain level of internal maintenance.
The more custom builds you have, the more staffing time it requires to maintain them. Even though each customer’s preferences may be reasonable, when you build a large client base, the amount of time can become draining on your staff (translation: expensive).
4. Look to future applications, not just current ones.
Another surprise that many current Web-to-print practitioners are finding is that, as their customer bases grow, solutions they once thought would be sufficient are not offering the flexibility and robustness they now need.
When choosing a software solution, choose something that not only meets your current needs, but offers scalability for the future. Even if you think you won’t need certain capabilities now, the business environment has a funny way of changing on a dime. Your volumes might grow. You might find yourself bidding on jobs from a completely new customer base. You might find that capabilities you once thought you’d never need are now indispensable.
It’s important not to be penny-wise and pound foolish. Don’t join the ranks of those who made minimal investments just to “test the waters” of Web-to-print, only to find themselves successful, but unable to meet their customers’ future needs.
5. Protect yourself in your pricing policies.
One of the pieces of conventional wisdom regarding Web-to-print is that, once you gain a contract, you lock your customer in, garnering a highly profitable, recurring revenue stream. Consequently, printers tend to give away the front-end design and development, hoping to make it up on printing.
While this can happen, this is only if the application actually generates the high levels of print volumes you anticipate—and generates them consistently over time.
One highly successful Web-to-print provider learned this lesson the hard way. Working with a Fortune 500 company, it developed a very powerful application with seemingly unlimited potential. But the client didn’t market the product internally, so the anticipated print revenues didn’t materialize. At the end of the year, the print provider had a huge investment in maintenance and insufficient revenue to cover them.
Therefore, another lesson is not to give away maintenance or other services in anticipation that you’ll make it up in printing. Make sure that you charge for upfront development and, if the application is going to require large amounts of your staffing time to maintain, consider building in an end-of-year fee to cover that time in case the print volumes don’t.
6. As more and more print providers get into the Web-to-print marketplace, customers are not as “locked in” to your services as they used to be.
At the end of your contract, there will be many other providers vying for this business, claiming to offer your clients the same services you do, especially as more powerful off-the-shelf software is introduced. You need to be prepared to offer your customers something else—some value beyond Web-to-print itself—to convince them to stay with you.
Any loss of those customers in which it had so heavily invested would be devastating. Consequently, the company is in the process of developing new, cutting-edge applications for its clients beyond the Web-to-print interface itself that its competitors cannot yet offer.
While many of these lessons were painful for Web-to-print pioneers to learn, those just entering or considering entering the marketplace are in an excellent position. After all, as the technology has become more ubiquitous, and the long-term costs and challenges of these applications have become more well understood, much of the conventional wisdom surrounding Web-to-print has changed. |||
About the Author
Heidi Tolliver-Nigro is an industry writer and analyst specializing in digital technologies. She can be reached by e-mail at htollvr@aol.com.
Summarizing Lessons Learned
The Web-to-print market is opening a host of opportunities for printers, particularly those already committed to a shift in business models that puts them earlier in the marketing process, helping customers to manage their documents and streamline and improve the effectiveness of their marketing campaigns. But there are a lot of lessons to be learned from those who have blazed the trail. To summarize:
There are a lot of solutions on the market. Choose carefully, not just based on your current customer and workflow needs, but future ones, as well. Think “scalability.”
You may be able to get into this market for less than you think, but you may be surprised by the staffing needs that can accompany these applications. When integrated into a well-developed business plan, you will need additional staffing.
More customization is not always better. Balance account maintenance needs with anticipated revenue.
Price your services carefully and don’t give away too much.
There is a need for these services in the marketplace, but they still require selling. Often, clients know they have a problem, but don’t know how to fix it.
The number of competitors is growing. Web-to-print does lock in customers as long as they are under contract, but you’ll need to continue developing new services and applications to maintain differentiation in an increasingly competitive market.
