Quick Printing
June 2004
Beating the 800 lb. gorilla
An effective business plan is your best bet against larger competitors

Have you ever felt like you’re competing against an 800 lb. gorilla? Do you have a tough competitor who’s bigger, better equipped, better staffed, and better financed? Or maybe you’re facing a really difficult situation trying to compete after the unexpected loss of a key employee, poor cash flow or sluggish sales growth. Battling any of these challenges can be an overwhelming task unless you have enough hope and tenacity to hang in there until you overcome.

All business owners and managers occasionally deal with some 800 lb. King Kong. Let me tell you about one of my problem primates. About two years ago, while I was giving a seminar to about 70 printers, I mentioned I was working on a top-secret marketing program nicknamed The Kinko’s Killer. I explained I was going to develop a very specific sales, marketing, in-store merchandising, direct-mail, and pricing strategy, all designed to put out of business the big, beautiful Kinko’s copy shop that had opened one block from my print shop.

Well, during the break I think all 70 printers approached me and asked if I could keep them informed about my Kinko’s Killer. Many told me Kinko’s had hurt their business. Others said that while Kinko’s wasn’t a direct competitor, they faced a similar beast and would be interested in how a smaller, locally owned printer could compete and win against it.

If you’re not familiar with Kinko’s, it’s a U.S.-based copy shop franchise with about 1,000 locations. A few years ago it was privately held, but then it was sold to some Wall Street investment group that invested a reported US$200 million into the operation. It was already deep-pocketed and tough to compete against, when it was announced recently that Federal Express was buying it, reportedly for US$2 billion in cash.

Getting to know the gorilla
During the last two or three years, I’ve made it a sort of obsession/compulsion/addiction kind-of-thing to stealthily study, learn, borrow, and get my hands on every bit of information about Kinko’s that I legally can. I’ve visited Kinko’s stores in more than 30 cities, including Calgary, Toronto, and Mississauga, purchased dozens of copy jobs from them, and asked Kinko’s employees hundreds of confidential questions about their stores’ and company’s operations.

I’ve been given permission to photocopy confidential Kinko’s operational forms, selling systems, quarterly strategic operational plans, price lists, and even obtained the blueprint of the Kinko’s store being built next to my own print shop, showing all the furnishings, equipment, and workflow systems. It’s amazing what a sleepy, part-time Kinko’s employee will tell you at 2 a.m. I’ve asked to be put on their e-mail list and mailing list and I’ve used secret shoppers to scout their prices and observe customer service skills.

After all that, I’m more convinced than ever that Kinko’s can be beat. I think I have discovered some serious weaknesses in the Kinko’s business model that we—independent and locally owned printers—can use to beat Kinko’s at its own game.

But along the way, I’ve also discovered—sadly—that we independently owned printers often have more weaknesses in our business models than Kinko’s does. We often drive customers away and send them directly to the gorilla without even realizing it. The question we have to ask is, “Why is Kinko’s so popular?” Why do people flock to its stores in droves? (I once visited a location in Boulder, Colorado, with 19 customers in the store on a Tuesday afternoon.)

Here then is my list of what I call the Kinko’s Advantage—characteristics and attributes that have made the chain so popular and such a tough competitor:
-An odd but funny name that is easy to remember
-A retail store concept even though it sells a manufactured product
-Lots of equipment and in-store services
-Excellent locations, and lots of them
-Expensive-looking in-store graphics and signage, and many in-store product-merchandising displays
-A better-dressed sales team
-Flexible prices—sometimes deeply discounted
-A well-organized workflow system
-A consistent direct-mail and newspaper marketing program
-A willingness to invest lots of money in the stores
-A style that appeals to young people.

Kinko’s can be beaten
To compete with Kinko’s, you’ll have to become good at many of the things it is good at—and then better, much better, in the areas where it is weak, like customer service, quality, and product knowledge.

If you think of your business in terms of market share, I think you can succeed by running a well-managed operation. On a personal note, my goal in Fargo is to secure 30% of what I estimate to be a $2 million-a-year copy market. My goal is to see sales at my new copy shop reach $50,000 a month by the end of next year. I think I can achieve 14% owner’s compensation on that, or profit of $7,000 a month.

I think I’ve discovered some really good ideas that will help you and me compete against Kinko’s. Here is my list:
-An aggressive pricing strategy
-A unique brand name and identity
-An impressive equipment list
-A very good location
-Corporate-looking in-store signage and graphics
-all quality in-store merchandising
-An energetic and enthusiastic front counter team
-A “change your thinking” commitment to speed
-Simplified order-entry systems
-Digital downloading capabilities
-A focused sales and marketing plan
- A commitment to doing it better than you have before, the willingness to see things from a fresh perspective, and the discipline to implement a lot of changes quickly.

If you think you can effectively compete without doing these things, you are living in denial. For a long time I thought I could compete against Kinko’s because I was a local, hardworking, honest entrepreneur, and I deserved it. Don’t be like me. My thinking was naïve and a little dumb. Realize you need to enact a better business plan to begin winning the battle against Kinko’s

Well, that’s it for this issue. If you want to see pictures of my new copy shop, and samples of my in-store merchandising and marketing plans, fax me your e-mail address on your company letterhead (1-701-239-1748). This ensures only real printers get the information. I have a very good e-mail newsletter with a lot of helpful information. It’s free, and I’ll never sell or share your e-mail addresses.
Mike Stevens is one of North America’s most successful small printers. He owns Express Press in Fargo, North Dakota. Starting with sales of $10,900 a month in 1985, volume now exceeds $250,000 per month. You can reach him at mikestevens@expresspressusa.com or visit www.expresspressusa.com.
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