June 2002
How to expand the digital revenue base
Printing is only the tip of digital iceberg if you want to make money
Last issue we looked at digital printing from the perspective of a conventional print shop. But what about the perspective from a more advanced service provider? What if you are providing more value-added services than straight black-and-white or colour copies?

Traditionally printers have been accustomed to receiving files or hard copy from customers and delivering a printed product. This activity may account for a considerable amount of work in the industry, but how do you increase your value to the customer and how do you grow your business? Calling on new prospects often only gets you this comment: You are the fifth printer who called me today. What do you have that’s different?

Meanwhile you already have solid relationships with customers, and it is often easier to build business with those who know you rather than finding new clients. All customers have two things in common: 1) They need to create the content for printing, and 2) Printed goods need a distribution process.

Many successful printers have expanded into fulfillment services, which may include functions like storage, shipping and mailing. According to U.S.-based consulting firm TrendWatch, in 1996 only 7% of print businesses saw “broadening fulfillment, mailing and shipping abilities” as a sales opportunity. In the fall of 2001, 19% saw the opportunity. Where are you?

Most clients control graphic production through an internal design department, a graphics firm or an advertising agency. It is rare for a print provider to earn this kind of confidence from a client. However, managing the customers’ files once they are created and ready for print can be achievable with the right tools and support.

A CAP Ventures study conducted in 2001 indicated that printing costs are just the tip of the iceberg for creating a printed piece. The study of the full cost for producing 50 to 1,000 copies of a manual includes the following elements:


External creative
Internal creative
Internal preparation and review
Warehousing and archiving
Fulfillment and distribution
% of
Total cost


Two questions arise when it becomes clear that printing is only a small portion of the total project cost. First, why are customers haggling about prices and changing suppliers for small change? The answer is, that’s their job! No one likes to pay more than they need to for anything. The other question is, do customers and printers know the total cost of a project? This knowledge can be used to add more value to the relationship.

Adding value
A printer could follow the process back and forth with the client. Explore the creative process with customers. Determine who is preparing the files and how they are being prepared. Examine the proofing processes and explore options to provide cost economies while maintaining quality. Are there electronic proofing processes, like preparing a PDF file of customer changes, that can be submitted for approval instead of preparing and shipping expensive colour proofs?
What about archiving requirements? Printers used to have large areas set aside for storing film and plates. This not only took up a lot of space, but also required expertise to manage the storage requirements. Few printers did this well. Film was often lost or damaged. Plates were also risky, and few jobs were ever printed “as is.” Can you now provide these services with your servers and data asset management systems? This could be a fee for service, and you could build a reputation for modifying customer files to accommodate revisions.

Fulfillment and distribution in the CAP Ventures example accounted for 10% of the total costs. How can you help? You could use a lower-weight paper for projects that are mailed, for example. How is the project being distributed? Perhaps re-packing is required after it leaves your bindery. Can you assist by packaging and labelling to meet the customers requirements? You could provide these services either in-house or with the support of a trade partner.

Today many companies are looking to reduce administrative costs by reducing the number of suppliers they deal with. If you can provide distribution and fulfillment services this will help customers achieve their goals.

Customers are also becoming more aware of the costs of obsolescence, which can have a staggering impact on the unit cost of a program. If a project costs $1, and there is a 16% obsolescence factor, the unit cost increases to $1.16. (Some customers would change printers for less than a 5% difference.) Investigate what happens to your clients’ jobs after they have completed printing and distribution. Offer to do a study for them, and see if it justifies investing in new equipment. It can provide higher margins, since it is adding more value to your clients.


Bob Dale is the president of Pilot Graphic Management Services Inc., a company providing management consulting and custom training for organizations. He is also on the executive of the Toronto Club of Printing House Craftsmen. Bob can be reached at (416) 410-4096, or via e-mail at
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