- The stock market charts look like roller coasters and the credit situation is tough. Here in Seattle we’ve just lost our “home town” bank; Washington Mutual was acquired (rescued from bankruptcy? snatched up at fire sale prices?) by JPMorgan Chase. And our traditional manufacturing base – Boeing – is in the middle of what looks like a long-term strike. The good news is that Microsoft is fairly stable; stock prices now are just about the same place they were 5 years ago after the last stock split.
- Rather than let it get to him, Chuck Stempler, owner and CEO of AlphaGraphics Seattle, is philosophical and practical. His is one of the fastest growing privately owned companies in the state of Washington and one of the top AlphaGraphics franchisees in the country.
- Recently I took a tour of his operation and we talked about his company, industry changes, and the future. Today we hear what Chuck has to say about digital services as a way to provide services to a customer base that needs to control costs and generate more sales.
- WTT: In light of the headlines about the economic situation, printers have the opportunity to be proactive, rather than reactive, and bring solutions to their customers and prospects that generate more revenue, cut costs and reduce wastes. What are some of the ways you’re seeing your print on demand and web services doing that?
- CS: Print on demand is rapidly becoming understood and appreciated by more companies, especially those who have training or “kitted” materials. It has taken a long time for companies to realize that a really great unit price is no good if, at the end of the day, you have a pile of them left unused. Getting a terrific price on 8000 pieces doesn’t look like such a good deal if you have 6500 left.
- High tech companies, particularly software companies, are sending fewer and fewer documents with their products and we’re hearing from our clients that they want zero inventory. With print on demand, we can insure that they will have no obsolete or wasted materials.
- Retailers have similar issues. They are constantly changing prices, offers, and supporting marketing materials so they need to order small amounts to prevent waste. At the same time, no retailer wants to compromise on quality and speed of delivery.
- By becoming a single source that can provide printing, kitting, and fulfillment we keep control of the quality and eliminate the time needed to move a job from one provider to another during the production process. We’ve built the staff to do the handwork – light manufacturing, actually – here in our plant; that makes us fairly unique.
- We operate 24 hours a day, 6 days a week and we can do in one day what another company might take days or weeks to deliver. The longest time a job spends in the shop is during the proofing stage. Most projects are out in a matter of hours after approval if they are digital and just days, if offset. We can get an order of 950 perfect bound books approved one day, produce them overnight, and deliver them the next day.
- WTT: We’re reading in the trade press, that digital printing is making inroads at the expense of “offset printing,” and that about “45% of all print is short run and time sensitive.” Are you seeing the balance of work through your company changing?
- CS: We don’t see so much of our work moving from offset to digital; instead we are doing things that we couldn’t do before. For example, jobs requiring PMS colors are not likely to move from offset to digital; it’s the four-color process work that is likely to transition.
- As a percentage of all the production, the shift to digital from offset is not a big number. Our offset volumes are continuing to grow, though very slowly. Because you can get great quality in affordable short runs, the digital gives us new opportunities in short run color.
- We have 5-color presses as well as our digital equipment. We have a ½-size 5-color offset press and five 2-color presses as well. We have an HP Indigo 3050, 2 Xerox IGen 3s, 4 Xerox Nuvera 120s, and an Océ 6250 VarioPrint.
- The decision point, we’re finding, where it’s most economical to move from offset to digital or vice versa has continued to compress. Offset is becoming more competitive, plates cost less, set up costs less, and make-ready is faster. What used to be a quality decision is now a decision that depends on price and/or speed.
- WTT: What services do you have in place to support marketers’ strategies to communicate across online and offline media? Are there new solutions coming down the road that you are considering or planning to implement?
- CS: I’m a printer; let’s talk first about “offline media” – printed materials. Marketers are, of course, looking at a variety of solutions that allow more customer interactivity and are significantly more usable.
- We are seeing more online ordering of static and dynamic printed pieces. Companies with geographically dispersed staff or third party sales channels appreciate centralized ordering. Many buyers take advantage of the 24-hour access that online ordering provides. We continue to add and improve leading edge applications, and while they used to be “nice to have” they are becoming more expected as part of ordinary business.
- As for online media, we are definitely in the early stages of evolution into a communications company and we are beginning to develop new revenue streams. For example, we have a nonprofit customer who had been reaching out to new donors from a purchased mailing list and getting around 1% response rate.
- By migrating his campaigns to a combination of print and electronic direct marketing – in a process that you might call “360 degree marketing” – we increased their response rate to 38%.
- The first step is a printed mailing piece that incorporates a pURL or gURL to capture donor information that will be used for more donor outreach. Once we have the customer information such as an email address, and permission to use it, the nonprofit can then market electronically to keep costs down. With multiple channels, we are playing on a new field, in virgin territory so to speak.
- One project generated a response rate of nearly 50%! This was a printed direct mail piece that directed a prospective donor to a landing page asking for more information, but not asking for a donation. In the past there has been no business case for a nonprofit to develop a donor base through continuous marketing programs like this, now we can show proof.
- Projects like this allow us to expand our services; we provide database management, donor acquisition and retention services, and ultimately calculate the ROI on the campaign. It also allows us to dominate the provision of service in a unique category, beyond our ordinary offering of capabilities.
- Recently I took a tour of his operation and we talked about his company, industry changes, and the future. Yesterday, in Part 1, we heard what Chuck has to say about digital services as a way to provide services to a customer base that needs to control costs and generate more sales. Today, he talks about what makes a project green and his view of the future of print.
- WTT: With the evolution of Web 2.0, social media, and consumer-generated content, do you see AlphaGraphics Seattle integrating with these services? Will you be providing new services that will support Web 2.0 activities and initiatives?
- CS: We are primarily in the B2B market; it’s very early in the implementation stages for social marketing. We do often see second and third tier relationship, such as franchise and dealer structures, where the actual user of the service is one or two steps away from the corporate marketing department.
- There the brand manager can carve out brand integrity while still giving the final user the freedom to personalize the marketing materials. For a company with locations throughout the US, these programs make it possible to implement iconic images relevant to each special location. Each user can chose a template that is regionally appropriate.
- We’re finding that there are really two types of customers. One gets it and is searching for a solution provider that can deliver. They continue to push and help us reach new levels.
- The second type of customer is well behind the curve and yet when we describe the solution and what it can do for them, especially how they can test campaigns and data, they get it. The barriers to entry are low; it is possible to do a meaningful pURL campaign at a modest cost. We don’t over promise; we test all the elements and don’t waste money.
- WTT: Your company is FSC Chain of Custody certified. Congratulations! Does that make you a “green” printer? Not everyone defines “green printing” the same way and there is no standard or certification for what makes a printer — or a given project — green. From your perspective, what is “green” printing?
- CS: That’s right. “Green” is a word that can be used and abused. We’re not particularly righteous about the whole thing, however we want to help our customers be as environmentally appropriate as possible.
- One area on which we concentrate is the choice of paper and where it originates. We are focused on sourcing; where did the fiber come from? We want the papers that we use to be raised and managed in a sustainable way, to be managed with a view of the future.
- WTT: Are you finding that more print buyers are asking for or expecting “green” printing? Does FSC certification make a difference to them?
- CS: It comes up more and more often. People are asking about FSC certification, recycled content, VOC emissions… It is the responsibility of the printer to be able to enumerate all the options and present the cost/benefit to the client.
- We have chosen to take the high road. For example, we just bought a new large format Mutoh Hybrid BioJet and paid a premium price for it. The inks used are corn oil based and we believe that will be a better decision in the long run.
- WTT: Just for fun, put on your “prognosticator” hat and tell us what you think the future looks like. Will we eliminate paper in the office and read all our books electronically? Please share a few thoughts about where you think this is all going.
- CS: I believe the paperless office/e-book question is a generational thing. My kids will respond to you in a very different way than my wife and I.
- If you asked my kids what the Dewey Decimal System is, they would have no idea. Ask them how they find a book in the library? They’ll tell you they use the “Search” function on the library computer. We used to have to know how a book was categorized to find it.
- That being said, my generation is going electronic. My wife has a Kindle and uses it all the time. I prefer my paper. However when I’m traveling, I really appreciate being able to read the news on the road on the Kindle.
- The music industry is the real example here. The move from LPs to CDs to MP3 is an example of a similar process. The shift is coming, but it’s not a zero sum game. The tactile, eyeball experience is still superior. Until that changes, there will still be a place for paper. Remember, the “delete” button is very powerful; to physically handle a paper product still incorporates time.
- Substantial printing will move to electronic delivery; the question is how long? It will happen when the electronic experience can move us as much as the physical experience.
- I use a social networking tool called Plaxo, for example. With my membership, I am notified of birthdays and anniversaries, and I can send electronic greeting cards to acquaintances where I might not have been able to acknowledge special occasions before. That’s a “bleed off” of printed cards. However, my closest friends and my family still get printed cards with a personal note from me.
- It will be interesting to look back in 5 or 10 years to see how printers reach outside paper and ink. We will still have small, specialized services that will produce those very special printed pieces. That said, I’m sure there is still a very good buggy whip manufacturer left somewhere in the world. I just don’t want to be the last buggy whip manufacturer!
