Many people are talking about the need for Print Service Providers (PSPs) to become “Marketing Service Providers”. The theory appears compelling.
- Printing services are increasingly competitive
- Print is becoming more and more of a commodity
- Therefore PSPs need to move into high margin, value-added services in order to survive
Marketing services are high margin, value-added services.
As many PSPs have told us, actually making this transition is not always easy. The world of marketing services is a very crowded market, with competition from large multinational agencies to small one person consultancies. At first sight, then, it might seem that PSPs have little chance of competing in this market.
The good news is that we believe that the latest trends in Marketing, and especially Big Data that are actually opening up significant opportunities for savvy PSPs to compete. Matt Guest, Senior Manager at Deloitte Strategy Consulting practice, speaking at the 2012 CMA Content Management summit,* summed up the opportunity well:
“The print industry has a phenomenal opportunity at the moment to position itself right at the start of a customer’s journey and make itself invaluable … print is about to launch a comeback and position itself at the heart of brand marketing.”
The latest trends in Marketing favour a print comeback
Over the last 10 years print has lost the top spot to digital as the primary communication vehicle. However, things are changing.
First, when digital marketing tactics – and especially email – first became commonplace, it was attractive as it offered, speed, low cost and measurability. But it isn’t perfect and presented similar challenges such as: how to manage the data or knowledge gained; how to integrate it within the business and how to make the message stand out in a world of information overload.
What’s more reports increasingly demonstrate that digital marketing techniques don’t always meet expectations and are not always the best way to deliver effective campaigns.
According to the DMA* direct mail is now 10 to 30 times more effective than email (and other digital channels such as Social Media have similar low rates).
Responses per 1,000
One of the big issues with email is spam. Since 2001 email spam has grown significantly from almost 9-10% of all email in 2001-2 to 64.8% in October 2012. Source: Symantec*
Added to this, reports confirm that there remains a strong preference from consumers for printed communications. And it’s not just the older generations but amongst the young as well. According to research by the Royal Mail*: “UK teenagers have a positive attitude to mail, particularly if they’re sent customer magazines or money-off vouchers, yet this cost-conscious audience is under-mailed by marketers and advertisers … 32% of 15-19 year olds have done something in the past 12 months as a result of the direct mail they’ve received, with 24% buying a product or service.”
In fact, more and more research shows that customers expect a multichannel experience with their brands, combining a mixture of print, online / digital. According to InfoSys* offline media such as print have a major impact on online purchases.
Opportunities for marketing print: BIG data … SMALL communications
Marketers are now looking for more sophisticated ways to reach their customers with the right message, at the right time, using the right combination of communication channels – print, digital, mobile, social media.
“In this world of multimedia, we believe using a variety of media is the most effective way of getting our message across,” Sheila Richardson, BP (PrintWeek, 23 August 2012)*
In the book “Precision Marketing – maximising revenue through relevance” by Ricoh’s Sandra Zoratti*, we see that 60% of Chief Marketing Officers said they are focused on reaching their buyers in more relevant and contextual ways through better profiling, targeting and segmenting.
It is the availability of higher and higher volumes of data (otherwise known as Big Data) that is now providing marketing brands with unprecedented insights into their customers. The net result of these changes is that marketing departments are increasingly refocusing their efforts on using data to create more targeted, value-added campaigns.
As Ashley Friedlein, Chief Executive of eConsultancy explains in a recent article in Marketing Week*, “one-to-one marketing is back, and this time it’s personal.”
Opportunities for PSPs to compete
In this new world of targeted marketing, the key focus is on creating a value-added effective communication, which works across multiple channels – and that is great news for PSPs for several reasons.
First, print is acknowledged as one of the most effective forms of communication and therefore should not be seen just as a commodity. It is a great vehicle for communicating brand values in a tangible form.
“Our view is that catalogues remain a very important part of the marketing mix. One of the most cost-effective ways of getting someone to visit a website is to send them a catalogue”, Marketing Director Tony Preedy, Lakeland. (Print Week, 23 August 2012)
Secondly, creative agencies don’t always have print skills. Since a crucial component of any cross media campaign is consistency this creates an opportunity for PSPs to add value by advising on critical areas like colour management.
PSPs can also have a strong role in advising on the latest developments in digital print and how to create value-added marketing print. Such as high impact direct mail, beautiful brochures and catalogues and use of personalisation.
How you can take advantage of these opportunities
First and foremost… it’s important to assess your own strengths. Few PSPs can become full Marketing Service Providers overnight. Many will prefer to move step-by-step, service by service, towards their goals.
There are usually plenty of opportunities, starting with your own client base, to introduce new services. In this way you can focus on niche areas where you can add value, without leaving behind your core business – print.
Start small, grow fast – A good example of starting small is Elletra, now a Marketing Services agency in Italy. It was looking to gain new business by expanding its range of services, and build client loyalty by providing a fast and professional service.
Elletra started by focusing on improving service to its existing clients. It did this by implementing a web-to-print portal, which allows clients to purchase customised print services online – on demand. Since introducing its web-to-print strategy, Elettra has established a national client base and more than doubled its sales turnover.
Full colour variable data printing – In a recent survey, Printview* identified that full colour variable printing is the top opportunity (at 70%) for PSPs to generate new revenue. It’s undoubtedly a growing area.
According to Barb Pellow of InfoTrends* – in the US over 34% of mail pieces in US were personalised in 2011. “Between 2009 and 2011, personalization rates experienced a stunning 46% growth rate.”
Some PSPs are concerned that variable data requires specialist and hence expensive skills and technology. However there are many variable data print jobs – particularly in the B2B market – which are smaller scale.
For example SAP* recently won an award for a B2B campaign which featured high impact direct mail to reach just 17 key British energy contacts.
One option for PSPs is to outsource the data requirement – e.g. analysis, targeting and segmentation. There are a variety of specialist companies including Ricoh that can provide this service. This means that PSPs could focus on creating high quality, high impact deliverables that are consistent with the campaign creatives.
Cross media – Most campaigns today will involve a mix of online, email and print and other channels. Clients are often looking for one supplier to manage the entire campaign so that there is consistency across all of the elements within it.
Using the latest cross media software and digital printing, PSPs can be well suited to fulfilling this role. The latest cross media software tools can be simple to learn and there are hosted versions available so that you do not need to install the software locally.
Talk the talk – selling marketing services will often involve selling to different people within your client’s business, and this requires a different approach.
Whereas for a typical print job you would liaise with a print buyer, with marketing services you will typically be dealing with other senior contacts – usually within the marketing department. You will need to approach this more like a marketing agency – identifying solutions to their business needs and campaign objectives.
Although this can be challenging, longer term this will work to your advantage as you will be building more strategic relationships with your clients.
The opportunities are there for PSPs. Probably more than many realise.
There will always be a need for quality print – so we would advise PSPs to build upon and enhance their print expertise rather than try to move too quickly to become a full Marketing Services Provider.
Graham Moore -Director Business Development, Ricoh Europe
PSPs can implement marketing services at their own pace, step-by-step to suit their own expertise, client base and aspirations.
Finally, one last thought: if you don’t compete for marketing services then your competitors probably will, which means it’s very much in your long term business interests to take this opportunity.
For more insights from Ricoh see: ricoh-europe.com/printandbeyond
*Matt Guest, Open CMA magazine, Winter 2012
*DMA “DMA Survey Shows Snail Mail, Phone Beat Digital in Response Rates”, June 2012
*Symantec, “Great News for Email Users: Spam Rates Dropped by Nearly 10 Percent in October 2012”
*Royal Mail “Consumer insights – direct mail and people aged 15-19”, August 2011
*InfoSys: “Infographic – Bridging the gap between offline and online” September 2012
* “Precision Marketing – maximising revenue through relevance” by Ricoh’s Sandra Zoratti **Ashley Friedlein, “One to one marketing is back, and this time it is personal”, Marketing Week December 2012
* “PrintView – Companies Focus on Customers for Big Data”* January 2013
*Best use of Direct Mail: SAP, B2B Marketing magazine Jan 2013
*Barb Pellow, “VDP: The Market Matures and Becomes ‘Print Plus’, Nov 2012