If you haven’t noticed lately, the consumer and financial media have been talking about a rapidly slowing economy. Actually, if you read some of the headlines, it seems like the sky is falling: “The auto industry slams into reverse,” “High-tech sector collapses,” “Major layoffs pull the economy into a recession.” In its usual style, the consumer press is getting carried away. How deep the economic downturn will be, no one knows, but it’s obvious that the boom is over. The big question is, how are printers going to react?
The knee-jerk reaction is to adopt a siege mentality and go into survival-only mode. Cut most or all advertising, trim all productivity-improvement expenses and slash prices. The result, as expected, will be a disastrous bottom line—a sort of self-fulfilling prophecy.

Yes, eliminating advertising does reduce immediate costs, but it also jeopardizes future sales and sends a negative message to print customers: times are getting worse, so cut back your advertising and do less printing. Cutting out productivity-improvement also reduces immediate expenses, but in the long term it actually increases production costs.
The first thing that the knee-jerk-reaction printers will probably do is lower prices. In the short run, this may help to hang on to existing sales or even attract a little more business. In the long run, the bottom line collapses. The printing industry makes from 4% to 6% profit on sales, according to the Printing Industries of America Ratio Studies. It doesn’t take much to destroy the bottom line. The saying that “If a print buyer is willing to look hard enough and long enough he or she can always find a lower price than the current lowest price,” is even truer in a recession. Selling print on the lowest price has never been a very profitable formula. If you can’t sell on the value of printing instead of the price, you are not going to make a profit.

Another group of printers refrains from knee-jerk reactions and looks at an economic slowdown as an opportunity, not a problem. They regard a recession as a chance to get ahead of their competitors. Advertising becomes more effective when there is less competition for customers’ attention and it says to prospective customers: “We believe in print advertising even if our competitors don’t.”
Productivity improvements for the opportunistic printer have more impact during a recession than in boom times, because the knee-jerk printer will take longer to catch up. Production improvements also have more impact with clients when fewer printers are making them. Profitable, growing clients usually prefer dealing with a printer that is doing the same. Price is where the opportunistic printers usually get the biggest advertising during a recession. They are out selling the value of printing to their customers and helping them use printing more effectively. Slowing sales create major problems for customers and customers with problems present opportunities.

During a boom economy, everyone is going flat out and it’s hard to move ahead of competitors. It’s usually during a recession that companies trade places in the marketplace.
I remember Richard Fisher of the old MacClean Hunter plant in Aurora, Ont., saying that during good times they planned for the bad times and during the bad times they planned for the good times. It was one of the largest, most efficient and profitable printing plants in Canada. When a recession came, they never joined in.