This month, I spoke with Wendy Cebula, president of Vistaprint North America, to learn about the company’s business strategy and how it can afford to give its customers free products such as business cards and pens.
With the state of the industry right now, what factors do you think have led to the current success of your company?
Vistaprint has had a long-term growth plan and put processes in place early on that would help ensure that the company would deliver on that plan. Our ability to rapidly launch products and get them into the hands of our customers, as well as our top-notch marketing have really allowed us to continue to succeed despite the economic conditions. The company motto “test before invest” has allowed us to make sound decisions that have helped the company minimize its risks as well as calculate and forecast future success.
As we continue to cater to the small business and home business customer, we will continue to offer products and services that will make their business better and allow them to market themselves in a professional manner. But we have also expanded our consumer product line and will continue to take advantage of opportunities in that marketplace. We think that our high-quality, affordable products have really resonated with customers, and we’ve done a great job at retaining those customers once they have purchased from us. We’ve also done well in expanding our footprint globally, which has allowed us to reach customers outside the U.S. We expect that trend to continue.
In 2009 the company expanded its Canadian manufacturing facility. What are the plans for future growth at Vistaprint? Is there anything new happening?
We are always looking at ways to improve our facilities, and we have embarked on a phased expansion of our facility in Windsor. Additionally, we have begun construction on our new manufacturing facility near Melbourne, Australia. We expect this facility to be operational in the first quarter of fiscal year 2011. We also plan to open an Asia Pacific regional marketing office in Sydney later this fiscal year. We believe these investments will help us better serve customers in the Asia Pacific region through faster delivery, as well as accelerate our revenue growth there and lower our cost of goods sold.
As part of our plan to expand customer service in languages beyond German and English, we continue to grow our talent in our new design, sales and service center in Tunis, Tunisia. Our telephone and email services are now operating in French and Italian from this facility.
And we also recently announced a land purchase in Montego Bay, Jamaica, which will serve as the site for the company’s new customer call centre.
On the Vistaprint website, customers can find offers such as free business cards, pens and even logo designs; how does Vistaprint afford to do this for free?
That is correct; many of our products are offered for free with the customer simply paying shipping and processing. Our free offer allows us to build up credibility that our customers will want to come back to us for additional printing and marketing service needs.
Additionally, customers may also decide to upgrade for a different graphic design or upgrade their paper stock. We are confident that once customers have had a chance to try our products and see the quality, they will continue to come back to us.
The reason why we are able to do this is because it’s a small price to pay to acquire what could be a loyal and long-time customer, but also because our proprietary processes allows for it. In many cases, with the products that we produce, the more orders we get, the more efficient we are in producing them, making our costs lower. That’s why we are able to pass those savings along to the customers.
How does your business strategy differentiate yourself from your competitors?
I can’t really comment on our competitions’ strategy, but I can talk about what Vistaprint is doing from a strategic standpoint.
Over the past several years, we’ve had the strategy of expanding our vision beyond print. And today’s vision at Vistaprint is to transform small business marketing to help small businesses sell their products and their services and really to help them sustain and grow their business.
Vistaprint has expanded into new multiple product categories that are also very important to small business marketing. Categories like mailing services, website design and hosting, promotional products, signage and custom apparel. And we have enormous competitive advantages in entering into each one. We compete in each one of the categories by leveraging some of the core capabilities of the Vistaprint organization including matching content, customer acquisition, very sophisticated technology, ease-of-use and mass customization.
And the result of our success in entering – and often quickly becoming a market leader – in multiple different markets is that we’ve been able to redefine the boundaries and the rules of our industry. Of course, there is competition in every one of these segments that we serve, but no company comes close to Vistaprint in its ability to serve as a full spectrum turnkey marketing solution for small businesses.
How do factors like the high Canadian dollar and rising paper prices affect your business?
Currency exchange rates provided a benefit to Vistaprint’s revenue growth compared to the same period last year. Year over year, the U.S. dollar has weakened against most of the other currencies in which Vistaprint operates. Excluding the impact of currency movements, our total second quarter revenue grew 32 percent, versus the dollar-denominated growth of 40 percent.
I recently read that because of customer demand, the company is now offering recycled paper stock for business cards and postcards. Are there any other plans coming up to become more environmentally-friendly?
We are excited to expand our printing options and answer our customers’ desire for recycled paper products. While our recycled products apply to business cards and postcards, we are always looking for new ways to help Vistaprint become a greener and more environmentally-friendly company.
What advice would you have for smaller print companies out there that are struggling right now – what can they learn from your company?
Like any business, small printers should focus on providing a compelling value to their customers. Local printers should leverage the personal relationships they have with their customers to differentiate their value proposition.
