Issues and Opportunities for 2019

According to the latest market data, 2018 was a good year for print service providers, and 2019 looks even better. In a recent SGIA Critical Trends Report, Chief Economist Andy Paparozzi predicted that commercial printing sales will grow between 1.5%-2.5% reaching $87 billion, an increase over 2018’s roughly 1.7% growth.

Not all products are growing at the same rates. In the 2018 NAPCO Research study of buying preferences, the five applications with the greatest growth potential were marketing collateral, direct mail, business cards, postcards and signage/wraps/banners.

Another interesting finding of the SGIA research is that printing companies are diversifying their products and services. When the 241 panel members were asked how they described themselves only 34% said they were strictly a print provider.

In contrast, more than 47% described themselves as offering a diverse portfolio of services and also defined themselves as offering mailing (42.6%), fulfillment (28.2%) and marketing services (20.1%). While increasing your sales, determining which applications have the greatest growth potential and diversifying your portfolio are all important, doing these things does not mean you can relax. Change can occur in a New York minute.

Don’t Rest on Your Laurels

In ancient Greece when athletes won competitions they were awarded with a laurel wreath to wear on their heads. The expression “Don’t rest on your laurels” means don’t get lazy or complacent about your achievements. The same is true in business.

There are three ways that sudden and expected change can result in the dreaded scrutiny of your in-plant: C-Level change, changes to the national economy and the perception of the local economy. The most important reason not to rest on your laurels is because preparing to defend the in-plant is a never-ending battle.

As I write this, the economy is growing and most parent companies are doing well. Generally speaking, when the economy is doing well more money is spent on printing and there’s less scrutiny of in-plant service providers. But anyone who’s been in this industry for a while knows how quickly that situation can shift.

First, it’s not at all unusual to see a high-level administration or executive change around this time of year. When a new person is added to the senior management staff he or she often wants to prove their value immediately by making a change, which they claim will save the enterprise a lot of money. They create a list of departments for possible outsourcing, such as food services, vending, the university bookstore, custodial services, HVAC maintenance and the in-plant printing and mailing facility. This is not hyperbole; I have seen these lists.

The second reason to remain vigilant is that the national economy can change in a heartbeat. Remember back in November when GM announced it was closing five plants and laying off 15,000 workers? Then Morgan Stanley economists warned of a 15% risk of recession in 2019 rising to 30% by 2020.

The third and often-overlooked issue is the perception of the local economy.  The only reason I am aware of this is because I live in Colorado, which has three of the 10 cities with the highest economic confidence. In September, the recruiting company Indeed published the results of a survey showing the 10 Cities with the highest economic confidence. Organizations in cities with a positive economic outlook are less likely to scrutinize their in-plant’s performance, while cities with a poor perception are more likely to scrutinize performance.

If you’re fortunate to live in one of these cities then your in-plant is at a lower risk of falling under scrutiny. No one knows if and when a threat will occur, but everyone needs to prepare.

Get Your House in Order

The best time to get your in-plant’s affairs in order is during the good economic times and slow periods. Often the demand within in-plants falls in December and January, so those are great times to make improvements.

1. Document and discuss the resilience of print. In most companies we visit we hear stories about customers returning to print. These stories focus on how the companies experimented with email or social media marketing in place of direct mail but did not achieve the same success. As a result they are returning to print and mail.
2. Show operational improvement. The most important strategy is to create measurements and demonstrate improvements. Take a critical look at your performance and choose metrics that will demonstrate a focus on measurements. Identify opportunities for improvement. There are plenty to choose from. We have five critical and 12 optional benchmarks we use to evaluate in-plant performance.
3. Listen to the voice of the customer (VOC) and use that to improve the “customer experience” (i.e., all the interactions a customer has with an organization). Do this by running focus groups and sending surveys. Research has found that companies that provide a better customer experience create more avid fans who are willing to spend more money and complain less. (Gartner, Customer Experience Is the New Competitive Battlefield, 2015).
4. Fight fire with fire. When facilities management and outsourcing companies approach management about the advantages of outsourcing, often the point that resonates the most is cost competitiveness. It is difficult if not impossible to refute a company that says it can save your parent organization a large sum of money without doing your homework. That is why leading in-plants know their top products and services and the going prices for buying them on the outside. Armed with that information you will be prepared when a company claims it can save 10¢ per piece resulting in $500,000 of savings.