10 Mega Trends Driving Success in the Printing Industry

In recent years, the printing industry has seen the gap between the “Haves” and the “Have Nots” widen as print shops have shifted from conventional print to full-service communication firms. The companies that are diving head-first into convergence, embracing new technologies, and dabbling with a healthy dose of risk, are the same companies that are flourishing.

Peter Schaefer, a partner at New Direction Partners, discussed 10 mega trends that are driving this success in the industry at PRINTING United Expo. Let’s break them down here:

1. Laser Focus on Efficiency

Finding ways to be efficient is paramount to surviving rising costs and fueling growth. One key strategy that Shaefer offered was to automate workflows. This allows for a reduced headcount as skilled labor continues to decrease, as well as opportunities for part-time/temporary workers such as stay-at-home parents or employees with disabilities.

2. Invest in Technology

One factor that greatly divides the Haves from the Have Nots is the willingness to invest in technology. Schaefer described one client that made the switch from offset to inkjet – a $6 million investment – is now seeing double-digit organic growth and 20%-plus EBITDA margins. Though risky at times, investments like this are paying off.

3. Maintain a Healthy Balance Sheet

Perhaps intuitive, maintaining a healthy balance sheet is a must. As the threat of a recession in coming years looms, having resources to draw from will prevent businesses from being drained. Schafer noted the No. 1 reason businesses shut down during the Great Recession was due to a lack of liquidity. And, while CapEx investments are necessary as stated in No. 2, he warns that companies should not be run as “lifestyle businesses.”

4. Solution Selling

Today’s Haves are adopting a solution selling approach rather than a product-based selling approach. Solution selling is understanding your customers’ (typically C-suite level management) problems and working with them collaboratively to find solutions. Not only does this selling style differentiate you from the competition, but it often results in sticky business.

5. Be an Omni-Channel Provider

Omni-channel solutions often include an end-product that is not print, but rather a video, email campaign, or a personalized website. And, to execute an omni-channel approach correctly, providers should be able to link all these solutions. According to a study by the CMO Council stated in Schaefer’s presentation: 94% of marketing decision-makers are seeking omni-channel experiences. However, Schaefer warns against the “printer mentality” which focuses on keeping the offset presses running. This, he says, prevents PSPs from being truly agnostic.

6. Differentiate Yourself

For PSPs looking to stand out against the competition, finding a niche market may be key. Doing so can help build a stronger brand, foster customer loyalty, and allow for innovation in their specialized services.

7. Focus on Industry Verticals

Focusing on industry verticals allows PSPs to tailor their services to meet the specific demands of customers. This focus also comes into play for buyers who may be looking to start in a new vertical through acquisition.

8. Certifications

Certifications such as HITRUST, SOC 2, and HIPAA are important for customers looking to keep data secure. Schaefer stated, “To succeed in certain segments of the industry today, maybe not all, admittedly, but to succeed in certain segments, you need to make data security your No. 1 priority.” Specifically, for industries such as finance and healthcare that house information like social security numbers; salary information; home addresses; and other critical information; a data breach would be devastating. For this reason, the PSPs that are doing the work to earn these certifications are the ones being rewarded.

9. Committed to ESG

An ESG certification – Environmental, Social, and Governance – has seen a major leap in demand by customers due to growing interest in sustainability. “If you can demonstrate your commitment to sustainability, you’re going to attract the customers that view this as being important,” Schaefer noted. And, while including sustainability transparency and goals into core values and mission statements is important, acquiring the certifications is a true testament to a PSP’s commitment.

10. Open to M&A

For the final trend, Schaefer recommended being open to M&A because growth through acquisition is often easier than generating it organically. For PSPs looking to buy or sell, there are various paths that can be taken. For example, a tuck-in acquisition enables a larger company to absorb a smaller company into its existing operations. Another style of acquisition is focused on increasing efficiency by purchasing a company with better operations and workflows. And, lastly, PSPs in lower growth segments can purchase a company that’s in a faster growing segment.

Conclusion

The divide between the Haves and Have Nots reveals the impact of embracing these trends. PSPs that diversify through investments, get creative in their selling approaches, and expand through M&A will build sticky business – one that customers rely on and return to. Finding strategies to adopt these trends and navigate the risks will set the foundation for a resilient and growing business.