To make the most of the market opportunities, a marketing plan must be your main ingredient

Cooking shows are among the most popular forms of educational television, and millions of people tune in every day to watch chefs slice, dice, season, and simmer almost every kind of cuisine they can imagine. There is even an entire cable channel devoted to teaching people more about cooking. Thanks to multiple cable shows and TiVo, you can see famous (and would-be famous) chefs turn out dish after dish 24 hours a day, 7 days a week—all without spilling a drop or scorching a scone. In the televised world of food on demand, the recipes are always appetizing, the presentation is always alluring, and nobody ever has to run next door for a cup of anything.

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The world of digital printing has a lot in common with cable TV cooking shows. If all you see about digital printing are case-study headlines or the major bullet points in conference presentations, you can come away with an incomplete, and possibly unrealistic, idea of what it takes to make a profitable business venture out of digital printing. To get a true picture of what it takes, you need to go behind the scenes.

"It's not magical. There is no magic dust. Digital printing can offer great solutions to clients, but you need to know how to sell it," explains George Abboud, vice president of operations at Consolidated Graphics Inc. (CGI), the largest sheet-fed and half-web commercial printer in the United States. Abboud knows what he's talking about because in these days of lower-than-ever profit margins for many printers, CGI is profiting from a well-planned and carefully executed investment in digital printing.

The company devoted two years to researching and investigating technologies and software before making its first digital printing equipment purchase of six iGen3 presses and six DocuColor 6060s. Today, the company has 8 iGen3s, 10 Xerox 6060s, and 12 black-and-white imaging units purchased from IKON.

Making informed decisions about equipment and software is only part of the recipe for success; you also need to know how to make the most of the technology so that your customers' needs are met and their budgets preserved. As an example of this need to know, John Green, president of Automated Graphics Systems, a CGI company, says customers might think they need one-to-one personalization to make digital printing work, but that's not the case.

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He explains that about 10 percent of the company's digital printing work involves variable data, and the rest is short-run color and black-and-white work. Green expects CGI will be doing more variable-data work as more of the company's customers learn how to capture and analyze information about their clients. "Customers are very excited. Everybody has it [personalized print] on their radar screens and wants to use it."

Tom O'Brien, co-owner of AccuCopy, a digital print shop in Greenville, N.C., and the largest index tabbing manufacturer in the Southeast, has developed his own recipe for success in digital printing. He knows from experience how much hard work and financial investment it takes to make digital printing a profitable venture. O'Brien says the company got its start in digital printing in 1980 with an investment in a single Xerox 9200. While the company still does a lot of work on offset presses, O'Brien estimates that putting toner (not ink) on paper accounts for 50 percent or more of the company's business every year—a percentage he expects to increase significantly in the next few years.

Since the early '80s, O'Brien has tried a variety of digital printing equipment, but decided to standardize on NexPress equipment after trying a 9110 a few years ago. Recently, the company invested in four NexPress 9150s (two equipped with inserters) and put them to work immediately. Within one month, O'Brien says, the company turned out more than 2 million impressions on the equipment. Being willing and able to invest in quality equipment and software is one of O'Brien's key ingredients for success in digital printing. "We invest millions of dollars a year in equipment and space. If you're going to do this, be prepared to invest heavily," he cautions.

Chris Payne, chief marketing officer at NexPress, agrees with comments Abboud, Green, and O'Brien have to make about the proper ingredients and process for cooking up a profit in digital printing. Payne's own formula, developed at NexPress and available to all its customers, calls for several special ingredients, no substitution, and careful mixing. He says the company encourages all prospective press owners to develop a comprehensive business plan and offers NexPress expertise in the development of such a plan.

One of the most important requirements of the plan, Payne suggests, is an understanding of the markets the company serves and how digital printing can be used to meet existing needs or fill unmet needs. Another part of the plan is a comprehensive strategy for marketing, selling, and doing the digital printing that takes into account all the investments of time and money that must be made along the way. The plan should be based on open standards and should carefully balance investments of technology and personnel in all areas, including production and sales.

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NexPress isn't the only digital printing press manufacturer that works with its potential and existing customers to develop and refine business plans. All the major digital press vendors offer some degree of assistance. Fred DeBolt, vice president of color product systems in the Xerox Production Systems Group, says, "We try to work with customers so that they have a business plan up front," and he stresses that one critical element is marketing. He also says the most successful digital print shops have learned how to leverage the distinction digital printing can give. "They're not talking about how they're going to do a job. They're selling the value to their customers—the value of digital."

It's not easy to sum up in a single phrase the return on investment possible with digital printing, and even the most veteran of digital printing salespeople have trouble reducing the value proposition to a 30-second "elevator" sales pitch. In fact, devising and conveying a unique value proposition for digital printing for a particular customer might be the most difficult-to-obtain ingredient in the entire process. CGI and AccuCopy work hard at educating their customers by offering seminars on a regular basis about the general benefits digital printing can offer, such as increased response rates.

The two companies also have developed some guidelines about the kinds of customers and projects that will truly benefit from digital. Abboud says he has noticed they have to work hard at understanding their customers' business to offer the best digital printing services. Green says the company has had success working with its customers to create customized versions of existing marketing materials. "Versioning," his term for the process, involves creating several versions of a marketing piece and can give customers a valuable boost in return rates without requiring them to develop databases full of customer information.

Mike Randolph, vice president of sales and marketing for Progressive Impressions International (PII), a marketing communications firm based in Bloomington, Ill., has worked for several years to refine the sales pitch on the value of digital printing. All this hard work has begun to pay off, though. Although the firm has been involved in full-color variable-data printing for years, Randolph says new opportunities have arisen for the company in the past few years because digital printing consumable costs have dropped significantly and more customers are collecting data that can be used to customize print jobs.

The company has six iGen3 presses—five in the United States and one in its facility in the Netherlands. PII produces a wide variety of marketing materials for major corporations around the world, including Caterpillar, A.G. Edwards, and a high percentage of the companies on the Fortune 500 list. Using the iGen3s, the company plans to convert some of the offset printing jobs into digital jobs, as well as to seek new customers.

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Randolph estimates that the company's digital color printing volume will more than triple within the next few months. He ties the company's success with digital printing to its willingness to work with the customer to devise data-driven printed applications. "Where we have been successful is in marketing to one person," he explains. Not all products or marketing situations benefit from money spent on this kind of marketing, so he and his staff work carefully with customers to explore potential benefits.

He says that all the discussions lead to a much longer sales cycle than that of the typical offset print job, and that the sales staff must have a different mindset than is required for selling offset print. "We are not selling a print job. We are selling a marketing program." He calls digital print sales "customer-driven orders" and says they have achieved the best results for customers after discussions with a customer's marketing team that have led to a comprehensive plan.

When digital presses first started arriving on the scene about a decade ago, some people opined that digital printing was a technology in search of a problem to solve. They didn't think the technology had much to offer beyond what offset could deliver. Press runs were longer then and personalization was more a fuzzy concept than an accepted marketing reality.

Today, though, after years and years of technology refinements coupled with big changes in the way companies like to do business, plenty of people are finding ways to solve problems through the use of digital technology. To do so, though, they are finding they often must invest in enabling technology to help make the most of their press investment. As Randolph explains, you need more than the press to make the most out of digital printing. "To really take advantage of it, you need all the information technology (IT) infrastructure built around it."

LaVigne Inc. is one of the companies that has invested heavily in the IT infrastructure for digital printing. Headquartered in Worcester, Mass., the company is one of the largest commercial offset printing firms in the Northeast and one of the 50 largest digital printing facilities in the United States, with clients in every state in the country as well as in more than 20 other countries. One of the IT elements the company has incorporated into its digital printing services is the Web. The company has found a way to help its customers save money and open up new marketing opportunities through fully automated web-to-print solutions accessed through portals.

The company's approach is more sophisticated than offering a portal through which customers can customize print pieces and reorder via the Web. Using an HP 3000 digital press, Printable Technologies' Print One Customer Center web portal software, and HP's ProductionFlow workflow, LaVigne has been able to grow its digital printing business by 400 percent in the last two years and supports more than 40 corporate web portals.

Progress Software, a software consortium that sells its products around the world, has worked with LaVigne to create a solution for its software partners around the world. Partner companies log on to a secure website, choose a template of a postcard or four-page marketing piece, customize the copy, and add images, contact information, and logos. Once the template is complete, the partner uploads mailing information and submits the job. LaVigne takes care of the rest, which includes printing the job (even if it's a single postcard) and making sure it gets in the mail within a day or so after the order is placed. Because Progress does business around the world, it needed a printing partner, such as LaVigne, that could print the jobs regionally throughout the world.

CGI is another company that has been able to use the Web to help boost the demand for digital print services—a trend that Abboud says will continue to grow. "Web-enabled printing is huge," Abboud says. CGI now has 225 sites for various customers that help people select, customize, and order all kinds of print materials.

Jeff Hicks, president of Seneca Enterprises, a full-service commercial and label printer in Franklin, Penn., has learned a lot the past few years about the IT and software requirements to do complex digital printing. The company uses a Xeikon DCP 32D that it purchased four years ago to produce customized marketing and promotion pieces for its customers, as well as tickets for sporting events and concerts. The company also invested in an Indigo press a few years ago and a Canon CLC 4000, giving the company many digital printing options. "I call it the best of both worlds," Hicks says.

He recalls that the first year the company had the Xeikon it had to invest heavily in software for variable-data printing and to learn how to create variable-data jobs. "It was a painful process." The learning curve may have been steep, but today Hicks is bullish on digital printing and happy with his investment. The company recently won a Best of Class award from PODi for its part in helping Slippery Rock University devise and print customized recruitment materials.

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Clarica, a Canadian insurance company with more than 90 offices in Canada and the United States, wanted to use digital printing to meet its goals of reducing printing costs and inventory. The company also wanted to make its marketing materials stand out from its competitors'. To meet these goals, the company purchased an Infoprint Color 130 Plus printer from IBM. The first marketing campaign the company printed on the equipment, a direct mail piece personalized and printed in full color, has won marketing awards and had a 9.5 percent response rate.

Dave Evans, director of document services for Clarica, says the equipment has enabled the company to be more specific in its marketing message. "With offset printing, we would take six brochures and roll all the information into one brochure so that we could order a higher volume to reduce our unit price. The brochures became very generic, and in some cases so broad-based, that the sales force didn't even order them."

Investing in digital printing technology has also helped Imtek LLC, a specialty marketing and fulfillment company that produces print materials for the travel, catalog, and financial services industries. The company is the leading provider of printed travel planners for North American motor clubs and works with more than 60 motor clubs. Dan Pitkowsky, the company's president and CEO, credits digital printing technology with helping him to meet the need to present fresher, newer marketing ideas to Imtek's customers.

"We've been in the trip-routing business for years," he says. Until about six months ago, the company used Xerox 920 equipment to print static trip-routing materials, including maps and directions. Now, using two DocuColor 6060s from Xerox, the company produces fully customized, full-color travel planning guides that can be printed and in the customer's hands within 24 hours after a request is made. Imtek even handles the calls and the requests for information.

Digital printing makes it possible for Imtek to personalize the content, but also to add advertising that is specific to the suggested route—the ultimate in one-to-one marketing for advertisers because they know their prospects plan to be in their neighborhood sometime soon. The personalized trip planners have been such a big hit with the motor clubs and their customers that Pitkowsky plans on adding another 6060 soon.

When encouraged to reflect on what his company has gained from digital printing, Pitkowsky is quick to point out that the company doesn't have any offset printing equipment, never has, and does not even consider itself to be a print shop. "We're not printers," he says. "We are application and marketing fulfillment providers." He adds that the company sees itself as offering more than print; it offers solutions and helps clients meet their needs. "It's not just print. We could deliver online or with PDF," he notes. In fact, the company intends to offer its trip information via the onboard guidance systems in cars as soon as that technology has matured enough to make it possible.

If one characteristic distinguishes successful digital printers from their less successful competition, it must be the willingness to see beyond the paper on which they print and to envision solutions they can offer their customers. Achieving such a vision requires a considerable investment in digital printing equipment and the infrastructure needed to make solutions a reality. The investment must be married to a concerted effort to help customers meet their marketing and customer retention goals—not make them swallow the technology whole. Companies that have made such a commitment have discovered that the rewards are a business meal that is uniquely pleasing and satisfying.

Molly Joss is a contributing editor. She can be reached at mwjoss@att.net.