Since the inception of digital color, printers have been looking for the pot of gold at the end of the digital color-printing rainbow. The tactics and strategies used by digital service providers have varied, as have their business results. Over the past several years, I have observed four fundamentally different approaches to market entry that reflect these varying results.
Identification of short-run color work that can be transferred from offset to digital. The value delivered to the end customer by transferring offset volume to digital devices is significantly improved turnaround time. Additionally, prospects and customers can print high quality, short-run jobs that may previously have been unaffordable using full color offset technology. Market entry is typically the price of the digital press and an appropriate RIP. The risk with this model is that competitors can offer lower prices to attract your customer base.
Migration of long-run offset work to print on demand or more targeted shorter runs. The end customer value in this model is a reduction in inventory and obsolescence for marketing materials and support documentation. There is a heavy focus on cost savings for print production in the selling model. Customers also value the ability to add some level of relevance linked to geography or demographics in their communications. These solutions typically employ a Web-based customer-facing tool for online order entry and a document database that provides revision control for the users. Digital service providers also link these capabilities with mailing and fulfillment operations.
A focus on the direct-mail opportunity. In this market model, the digital service provider is transforming a business from that of a print service provider to a business communications consultant. The primary customer contact is shifting from the print buyer to the marketing department. The value is linked to a better return on marketing investment. The sales model links digital printing to increased market awareness; improvements in customer acquisition and retention; and an overall improved marketing ROI. In this market model, the business communications provider needs to be data savvy and understand how to work with customers on data mining and integrating customer information within full color direct-mail campaigns to generate an improved response rate.
Market creation. This is a market model where the digital print service provider views the technology as a tool to deliver new products and services in a unique way to prospects and customers. Ten years ago, no one viewed short-run book publishing as a viable marketplace, yet today there are advertisements on television explaining how everyone can be an author and have a book published. Until recently, people glued photos into albums. Today, people upload images to online services to create a photo album; digital color printers are used to produce the album; and the photo album is shipped to the customer. While these solutions require an extensive e-commerce infrastructure, there can be mass appeal in the consumer market as well as applications that fit business-to-business requirements.
Creating a Market
I had the opportunity to interview Teague Bengtzen, president of Card Café, about how he built a digital print business based on a creative marketing idea and a solid vision for the company.
Card Café is a digital print subsidiary of Rocky Mountain Printing (RMP) in Utah. It is a business that Teague and his father, Gary, started in May 1995. They had been working for different commercial printers and in some instances even competed against each other. They decided to combine their 45 years of experience in the graphic arts industry and buy the assets of RMP.
Since their purchase, the company has tripled the number of employees and quadrupled its gross sales. RMP has a complete digital pre-press department including computer-to-plate and digital dot proofing. Pressroom capabilities include 6-, 5-, 4-, and 2-color presses, in both sheet-fed and Web configurations. RMP also has extensive bindery capabilities.
In 2002, RMP opened another division in Utah, in a 7,000 square foot building on the south side of the city. The plant is equipped with the first 4-color press in St. George, as well as a 2-color press and bindery equipment.
Teague focuses on the sales and marketing aspects, and Gary handles the operations. According to Teague, one of the most critical reasons for their growth was the addition of a great salesperson, Dave Miller, to the team.
In the middle of 2004, Dave and Teague began exploring the world of digital color. According to Teague, "The more I looked at digital color, the more I realized that offset would become a commodity. I also felt that the ultimate way to decommoditize our business was to focus on VDP."
As visionaries, they looked at a common problem that the average consumer has—staying in touch with friends and loved ones—and they linked that need to greeting cards. Remembering birthdays and anniversaries, fulfilling the Christmas card list, and getting Valentine cards to special people is something that we all want to do in a personal way. Dave and Teague had a vision for Card Café, where the user could build a database that never forgets a date, adds a gift if desired, and inserts your signature with a personal note. These were the design concepts for the custom built Card Café Web service.
Teague hired two software designers to build the site. When asked why they didn’t use off-the-shelf software, Teague responded, "We looked at all the companies doing Internet driven print on demand and decided they were either not sophisticated enough or too pricey. Custom development gave us what we wanted, including differentiated value add."
The site has been up for two months, is getting more than 5,000 hits a day, and printing hundreds of cards a day. Card Café has established gift card partnerships with a number of companies, including Eddie Bauer and a supplier of gourmet popcorn, so that the greeting card can be combined with a gift.
While Teague and Dave had a vision, its implementation has not been without challenges. There are significant lessons to be learned about security as digital service providers move into the world of e-commerce. With a business-to-consumer model, it requires that the prospect base be able to easily find your firm on the Internet. To that end, Teague has hired Web search engine consultants to ensure that Card Café gets the right level of visibility.
Additionally, when Teague and Dave developed their business plan, they looked at more than a business-to-consumer market. They realized that the underlying application software was capable of generating broad corporate market appeal. As a result, they have placed strong focus on the multi-level marketer that deals with complex distribution. Via the Web, the distributor or franchisee can order personalized business cards, letterhead, and envelopes, as well as personalized posters and static brochures. The remote distributor can also order static literature or personalize the content. HR departments can use the system for the implementation of employee recognition programs. Marketers can leverage the infrastructure to provide special rewards to their most loyal customers. Through a creative market vision, RMP has developed a sustainable business model with significant value for both the consumer and corporate markets.
Building the right business model is always a challenge, and there are multiple strategies for success. RMP and Card Café have demonstrated the ability to blend a consumer model with a business-to-business model leveraging a single technology investment. It is the ability to look at the market differently that is making RMP and Card Café successful.