The conversation touched on wide-format services, and when discussing the margins that can be achieved with wide-format printing services, Duggal was quick to point out that not all wide format is created equal. “There are a lot of segments in wide format,” he said. “Some segments are low-margin and some are very high-margin.” The focus, naturally, is to zero-in on the higher-margin markets, and to not be afraid of abandoning low-performing markets and applications. “We’re ok with ‘firing’ a client or segment that doesn’t work for us.” For Sandy Alexander, said Graff, “Out-of-home, conventional retail such as a chain with 50 to 1,000 stores, that area is growing. Also the specialty applications.” Duggal and Sandy Alexander also find that the constantly evolving technology is a substantial benefit – although not necessarily because of speed. The emphasis now is on quality. “Technology gets much more efficient each year,” said Duggal. “But with a lot of printing technologies, you’re not worrying about speed. People say, ‘I bought a press and it does 4,000 square feet an hour!’ Guess what? You’re never going to run it at 4,000 square feet an hour! The applications that are popular require you to slow that machine down.” (That is, run it in high-quality mode to print the best resolution possible). “Now we have virtual photographic quality and people are seeing that,” Graff added. “You notice the visuals on buildings and doors and we’ve never seen them before. That’s an area of growth.”
Over the course of the wide-ranging conversation, it became clear that the challenges that today’s print shops face, especially as they adopt digital printing and the new kinds of applications that digital enables, are not necessarily related to the physical printing or the print engine itself, but rather other aspects of the print ecosystem such as sales. “Some of the difficulties we’re having with traditional sales is retraining them and really changing the culture,” said Kahanec, “particularly when it comes to variable-data applications. And that’s difficult to do.” A lot of the difficulty is getting traditional print salespeople to understand marketing – and what today’s marketing professionals are looking for. “When you have a sales representative who isn’t schooled in marketing,” said Graff, “they can’t have a meaningful conversation. We’ve spent an inordinate amount of time and money training our salespeople to speak marketing.” Sandy Alexander has even hired subject matter experts who are available to accompany the traditional salesforce.
Effectively selling data-intensive print applications can also require talking to the individuals in the client company several rungs up the ladder from the usual print buyer. “The struggle is, where do you get into the sales stream?” said Graff. “Most of us are used to dealing with the same people we’ve dealt with throughout our entire careers. We speak to the production department, maybe the art director, when in fact this is a sale that needs to be made at a much higher level.” Admittedly, he added, this can put the salesperson in an awkward position. “I don’t want to offend my client by going to talk to the CMO who is probably seven levels above my client.” However, that may be necessary.
On the other hand, a lot of the barriers to expanding new print applications, particular high-value and high-margin work, are on the client side. For some like SCI, clients such as magazine publishers and their advertisers have enough data – as well as good data on subscribers to take full advantage of variable-data printing – and yet they don’t utilize it. McVea held up a variable ad that SCI had printed for Hearst Magazines. “Hearst has all their subscriber information,” he said. “They can put down where they live, they can track this barcode on the bottom of the coupon, they can put so much information on this sheet, and they only choose to print ‘Tom, here’s the nearest store where you can buy a pizza.’ ” When SCI talks to advertisers, even high-end retailers, about all the possibilities that variable printing enables, “it’s like a deer in the headlights,” said McVea. “They don’t get it.” He found that getting customers to walk down that path requires a lot of hand-holding.
Sometimes it’s not lack of understanding or ambition, but trepidation on the part of the client. “Up until recently, I don’t think that customers were necessarily able to use their own data and their own knowledge of their clients in the way they’d like to,” said Kahanec. “Some are still nervous about doing it. The good news is, every week we hear about new software that can help analyze client data, tell them who their customers are and why they purchase. I think it’s changing and the pendulum is moving.” A key challenge, added Graff, is that in client companies the data is often siloed, and migrating data to marketing – and then to the printer – is a more difficult process than you would think it would be. “It’s a Rubik’s cube of challenges,” Graff said. This of course assumes that customer data is usable – which, as anyone who has worked with variable-data printing can tell you, is not always the case. “We always have to scrub the data because it’s not clean for us,” said McVea, “although it’s getting better.”
As the emphasis shifts from the mechanical printing process to working with data to make it “printer-friendly,” the panelists all recognized the need to start looking for and hiring different kinds of individuals than usually make their way into the printing industry. Specifically, people who can work with software, be it off-the-shelf or home-grown. “Hiring people with that tool set who have that knowledge is an advantage for us,” said Graff. “Unfortunately, they’re 12 years old,” he quipped. “They’re definitely younger than we are, and they’re very smart, brilliant people.”
EarthColor, for example, has around 18 programmers on staff who started out in infrastructure and IT, but have moved to working directly on jobs. Astoundingly, Graff said that Sandy Alexander has “40% more personnel in our programming department than in our press operations, at least in digital.” “We all have an army of programmers working for us, and it’s a necessity,” said Duggal. “A whole area of one of our floors is dedicated to programming.” Finding these kinds of individuals has been a challenge, but it depends on how the job requirements are framed. The young(er) people who have the technical skills that these print businesses require are looking for challenges that test their skills and let them solve problems – and it doesn’t matter if they’re in the printing industry. “Most of the people we hire are a few years into their careers,” said Graff. “They’re looking for the next challenge.” The complexity of variable-data printing and these new high-value printing applications are well-suited to attracting the talent that these companies need. “We’re dealing with some complex programs,” said Graff. “Once we show that to them, they’re pretty excited and interested to get that opportunity.”
