AlphaGraphics Seattle Finds Success in Search Engine Marketing

By Cary Sherburne

Published: November 4, 2011

Chuck Stempler Tells the Story

Attention: Printing Firms! We at WhatTheyThink love telling your success stories, so let us hear from you. Seattle AlphaGraphics Owner Chuck Stempler did just that, and we are pleased to share his exciting story. His transition from using search engine marketing (SEM) to promote his own business to providing those services to other small commercial and quick printers is inspiring and educational.

WTT: Chuck, how long have you been part of the AlphaGraphics network?

CS: About ten years now. I purchased an existing center in May of 2001 that had been in business since 1989 and I became the second owner. Since then, we have grown by acquisition as well as through organic growth and we are now in the $10 million range in terms of annual revenues. I acquired two other AlphaGraphics business centers and five independents.

WTT: Since you bought the shop, what have you done to upgrade your production platform?

CS: The previous owner did me a favor by not buying a lot of equipment in the couple years before he sold the business, so we didn’t have to wait for expiration of possibly incorrect equipment. The shop was significantly out of step with where technology had gone, and one of the first things we did was trade up to newer equipment. We upgraded our bindery equipment to automated finishing and lightweight perfect binding with a plan to support heavyweight perfect binding. We also added large format and upgraded older presses to a couple of Heidelberg Printmasters and an ABDick twin tower. In 2005, we moved to a larger location, expanding from 8400 square feet to 15,000 square feet and along with the move added an HP Indigo3050 and an iGen3. Since then we have increased our facility to 25,000 square feet and added an additional HP Indigo, a 3550; upgraded the iGen3 to an iGen4; and added a 5-color half-size Komori press, a Scitex FB700 grand format inkjet press and a Kongberg CAD cutting system.

WTT: How did you get into the search engine marketing business?

CS: In 2006, we ran across a VC-backed startup agency in Seattle, Local Marketers, that offered a cost-per-contact model, different than the standard pay-per-click model. They had had some good success with a couple of other franchise systems, and they wanted to get to know an actual franchise owner. After meeting with them, I thought what they were offering was interesting and asked if they would be willing to test the model with my company. They were, and it drove new business opportunities for us by making it easier for people to find us via the Web.

WTT: I understand you are now offering these services on your own. How did that transpire?

CS: Following our success with the service, I introduced Local Marketers to AlphaGraphics and they picked up a number of centers as clients. But about a year later they lost their VC backing and folded the company. I approached them about maintaining the business for my company, reconfiguring it for the small commercial and quick print market. Since then, we have significantly revised the model and use the SEM program for our businesses (we have 5 locations). In addition, we established a subsidiary division, Local Print Marketers, which offers these services to other AlphaGraphics centers as well as other print companies.

WTT: Are you focused exclusively on the print space?

CS: For the most part. We are very particular about what customers we will take on outside of print, but we do work with clients of other companies, usually in a way that the introductory company gets some sort of revenue share, but we have a direct relationship with the end client.

WTT: How does the program work for print companies?

CS: When we work with another printing company, we bring them a keyword package of over 14,000 keywords. Of course, no company has that many unique products and services. We have also spelled keywords every possible way and use a variation on words and terms, kind of the long tail theory. The more obscure the request is, if you can match it, more likely you will get an opportunity to secure the work. And those unusual keywords cost less in terms of purchasing keywords. We also localize the package to the town or city, plus up to ten towns and cities in their vicinity—the geographic area they feel comfortable in serving, how far their sales reps will go to deliver a proof, etc.

WTT: Does each client use all 14,000 keywords?

CS: Yes. Maybe only 500 to 600 keywords will be active in a given month, but there is no penalty in terms of ad score for using all of the keywords because we have a deep and rich campaign. This is one of the differences between a professionally-managed paid search program and something you would do internally.

WTT: You obviously know where the AlphaGraphics centers are, but how do you target independent printers for this service?

CS: We have identified 700 cities in America that have market sizes large enough to support a search engine marketing campaign. Every week, we do a targeted mailing to 30 businesses. It is a variable data piece that is the first in a series of contacts that starts with print and also includes phone and email—working toward establishing a meaningful conversation. Sometimes companies understand the opportunity right away; sometimes it can take seven or eight contacts to get to the actual presentation.

WTT: When a company executes your program, what does it cost and what kind of ROI can they expect?

CS: If you are in a reasonably sized market, a typical campaign is in the range of $750 per month, which is a combination of the media sold at cost (ads on Google, Yahoo, Bing), our management fee and a call tracking line that we include in the campaign. Our experience is that 80% of contacts are by phone, and all calls are recorded so that business owners can use them to train their team to better handle calls. This brings more to the program than just giving them a lead. We also do some training in terms of phone answering and we do a lot of coaching and mentoring to help our clients better understands how to convert prospects to clients. This type of marketing is completely transparent and measurable. Every email is documented and every call is recorded. Fundamentally, this is very powerful marketing, but it is also very transparent. You can measure the results in a way that is not possible with an ad in the Yellow Pages or a magazine, and you can measure it in real time.

We currently work with 135 companies. A typical campaign generates a current month ROI of 2.75:1 and a lifetime ROI of 10+:1, with lifetime equating to the reorder business from clients originated via their search engine marketing campaign.

We deliver between 20 and 30 contacts per month per campaign—new prospects who are searching to buy print in their market right now. Historically across our clients, 85% of the contacts can be estimated, which means 15%of the time prospects are inquiring about products or services the business doesn’t produce. The historical close rate is around 35%. The even a bigger win is 31% of those new clients will become lifetime customers, and that is where the investment begins to pay its larger dividends. Another soft benefit comes from prospects where they do not win the business with the initial contact, but now that prospect has been exposed as a legitimate purchaser of print and the contact enters the client’s prospect pool.

WTT: Can you give us a couple of example success stories?

CS: One of our clients got a call from an ADT alarm installer who was not happy with the results of his current mailers. After an information-gathering sales call and submission of a marketing proposal, the installer called back within 24 hours and awarded them a three-month marketing retainer. This deal will also likely include 30,000 postcards over the next quarter. In another case, a client in Florida gained a new customer as a result of SEM that resulted in a $21,000 project around the customer’s annual conference.

WTT: Do you have ad templates your clients can use?

CS: We have built a very large set of ads that are worded very carefully to strongly indicate this is a B2B print advertisement, not meant for B2C. We deliver all of the contacts from the ads to a closed customized-per-client web site, structured as “do not index, do not follow” so it will not compete with the client’s organic web site. It is a 23-page web site that references all the products and services in those keywords. If you wanted to print a book, the ad would deliver you right to the page that talks about books , and you can navigate from there. The point is to make the page they land on as relevant as possible to the word they were searching on. Pages are customized to each client, so if it were Allegra, it would be branded accordingly, or AlphaGraphics or an independent.

The call to action is for the visitor to call or email a quote request form to discuss an opportunity. If you listen to the calls or read emails, very few people using search for print actually have the technical knowledge to buy print. We spend a lot of time training customer service people about how to talk to prospects. You can’t use terms like print to bleed or even coated paper. Most prospects do not understand these terms.

WTT:What percent of your overall business is now represented by Local Print Marketers?

CS:It has grown over the last two years to 10% of our sales and is a meaningful and growing profit contributor. We do more on the consultative side for clients than anyone else I have run into. Our client retention rate is 95%.

WTT: Why is SEM important for a printing business?

CS: SEM has replaced the Yellow Pages in terms of how people look for providers of printing services. We have been running search campaigns in Seattle for four years, and we still receive about 150 unique contacts per month from search from prospects we have not yet done business with. To me, this says a lot about how large the potential market for print services is. We have 11 sales people in the greater Seattle market, and yet 1,800 prospects per year contact us via SEM – 1,800 prospects who, for the most part, we did not even know existed. If you are not able to be found on the Internet, you will not be in the consideration set for this business. It also plays nicely into the whole idea of moving print companies from print to marketing services: Marketing ourselves, marketing on behalf of clients. We can sell this service, and it broadens and deepens customer relationships. It allows you to move away from commodity services and helps print companies become much more valuable to their clients.