Thinking Back And Planning Ahead

By Roger Buck, CDC

The last few years have seen incredible changes in the forms market place. Similar to the projections of the past PSDA FormTrak reports, both manufacturers and distributors have seen mergers and acquisitions change the landscape of our industry. There are many challenges in the future to both segments as well as opportunities. The one consistent issue all will agree on is we have to change and adapt to survive

Challenges and opportunities for the distributor

Distributors have watched as the forms market continues to erode. Multiple part documents become laser cut sheets and cut sheets become electronic forms or blank paper imaged by the client's laser. To offset the decline, many have moved into new and higher profit arenas such as promotional products, digital color, direct mail, posters, plastic cards, book publication and other full color products. These opportunities also provide some new challenges as distributors learn to sell marketing solutions as opposed to products. Sales representatives who have many years in the business may be reluctant to learn the tactics necessary to sell full promotional programs. New sales representatives may be willing and able to sell full color print. However, they may miss the subsequent opportunities that lie in data analysis, customer profile building, list acquisition, mailing and graphic design.

Distributor owners and sales managers are challenged to educate themselves and their sales team to think like a marketer. What is the purpose and goal of the marketing piece? Is it the right media for the project? Where is the database coming from and how old is it? What other print projects (including forms) can be secured? Can you assist in segmenting your client's customer base for better targeting? As mentioned before, distributors have had many years of success selling business documents. You are experts in the design of documents to transfer business information within and external to an organization. You sold solutions to improve the capture and transmission of data in an efficient manner. That same mantra applies in promotional print and products. Information must be transferred efficiently and to the right person at the right time. The message merely changes to a marketing or branding tactic as opposed to business data.

Distributors have long term relationships with current vendors and so one of the best scenarios would be for that valued manufacturer(s) to add the new capabilities to support their distributors. Having these types of conversations with their printing plants is a win/win for both parties. The distributor will be able to keep the same vendor they have trusted for years and who may be very in tune with their top clients. The manufacturer will be shown new directions they can move knowing that's where their customers are headed.

Challenges and opportunities for the manufacturer

Manufacturers have seen a huge change in the market. Many small to mid-sized plants have been acquired and this has even spawned some new independent plants. Independent printers now face several new challenges. They must compete with the large multi-location players who may have better buying power and offer more services. However the independent manufacturer often has the ability to provide higher levels of customer service. This is a huge advantage as the consolidators may not be able to maintain this personal touch. Another challenge for the manufacturer is their sales channel. Many independents are trade only shops although their distributor base is moving away from business forms. Distributors also find traditional forms offer lower profit and push their suppliers for lower prices. This affects the plants' profitability which may eventually reduce the distributor's vendor options. A presentation by Clemson University to the PSDA several years ago suggested that the distributors should work closely with their traditional plants and share margins to ensure their suppliers' stability. Plants are looking at new ways to handle and process orders to save the distributor time in order to earn more of the margin. Distributors may want to consider new processes for handling re-orders which include less of their time and more of the plants' time. This could be more efficient for all and a benefit to the end user as well.

New channels are opening for independent manufacturers such as ad specialty resellers and advertising agencies. Many marketing companies are learning that they can supply forms along with promotional products. Printing plants have the opportunity to begin exploring these new channels.

Manufacturers may choose to poll their clients to determine what direction they are moving and at what pace. Though traditional plants are often reluctant to move into B&W or full color digital, there are opportunities in wide format, plastic cards and security labels that are less of a light speed jump in technology and learning. Interacting with their current distributor base can help them plan for adding products and technologies. In some cases, plants can add new capabilities by outsourcing their products for additional value add services.

Both distributors and manufacturers may benefit from running a S.W.O.T. analysis on their company. Taking a serious look at your strengths, weaknesses, opportunities and threats can help you lay out a plan of action. Review the past, pay attention to industry shifts, and look forward to see how technology will impact your clients as well as your business. We should all become more effective at promoting our strengths and exploiting opportunities.

For a FREE S.W.O.T. grid contact Madison Forms!

Roger D. Buck, CDC, is the President of Emerging Solutions Now, LLC and a 40 year veteran of the printing industry. ESN offers new innovative equipment solutions to printers and print converters. They also provide marketing consulting and list acquisition services to their clients. Buck is a frequent contributor to various magazines and newsletters. He can be reached at Roger.Buck@EmergingSolutionsNow.com.

09/14/2009 /articles Link to this Entry