Top 50 Report Opportunity Knocks

Insourcing has brought in new business for many Top 50 in-plants. Fifty-four percent of the Top 50 are doing it. The benefits are clear.

by MIKE LLEWELLYN

AS PARENT organizations across the board spend less on printing, some in-plants are looking beyond their primary client.

Fifty-four percent of the Top 50 in-plants are insourcing work from customers other than their parent organizations. (See list on page 18.) They are bringing in hundreds of thousands—even millions—of dollars in revenue, even in these tough times. For many, this revenue plays a large part in their success, and helps keep them on the Top 50.

At Minnesota Life Insurance, ranked sixth in the nation for insourcing, Manager Tom Neckvatal reports that insourcing revenue accounts for about 25 percent of his in-plant's digital printing income. So he takes the shop's outside sales strategy very seriously—and that has brought his shop $2 million in insourcing revenue.

"I have two full-time sales reps and six broker groups," he says. Neckvatal says his shop has found that cold-calling is an ineffective means of gathering clients. Instead, the in-plant relies heavily on print brokers to bring work into the shop.

"Ninety-nine percent of the work is either a referral or brokerage," he says.

Meanwhile, the two sales representatives are in constant contact with the clients the shop has already gathered.

Neckvatal says insourcing is simply a sensible business move.

"It makes us money," he says.

Additionally, he adds, an insourcing program makes his shop more valuable to Minnesota Life.

"It gives us visibility as a profitable venture," he says. "Plus, we're utilizing equipment that we already have, so that lowers costs."

Meanwhile, Debbie Pavletich at Briggs and Stratton says her shop has found cold-calling to be an essential part of revenue generation. The in-plant has been insourcing since 1996, and this year is ranked seventh out of the IPG Top 50 in insourcing revenue.

"It's mostly cold calling and direct sales," she says. "Buyers still want that personal contact."

Pavletich says the in-plant put together a marketing plan to determine the shop's niche, and to determine which companies fit that description.

"As you start building your business, you start getting word-of-mouth business," she explains. She says the shop's Web site has been very effective at bringing in new clients.

Building A Reputation

The push to bring in extra revenue from outside has brought some interesting jobs through the door of the Briggs & Stratton shop.

"One of our pioneer products that we talk about a lot is the Season Subscription Brochure for the Milwaukee Chamber Theater," she says, adding that the brochure helped the theater exceed its financial goals for the year. Pavletich says successes like this one help support the shop's word-of-mouth business.

Even government in-plants are insourcing. For Robert McDaniel at Texas Health and Human Services Printing Services in Austin, insourcing has become a survival necessity. His shop's reputation is what keeps the business coming in.

So McDaniel says his shop sends out literature to potential customers, and carefully cultivates what has been a very successful word-of-mouth following. Ranking eighth in insourcing revenue, the in-plant brought in $1,514,133 from outside sources this year.

"We have a really good reputation for customer service," he says. "We've worked hard to establish that."

Selling The Shop

Russell Bartholow, interim director of Printing Services at the University of Nebraska, says insourcing accounts for about five percent of his operation's total revenue.

Because the University of Nebraska is a state-run organization, the in-plant is limited to producing work for non-profit organizations, such as the Nebraska University Foundation and the Department of Travel and Tourism.

So the shop has had to work out a sales plan very carefully.

Bartholow says he routinely keeps in touch with his top clients.

"I'll call the top 20 clients on the list, and then move down," he says. "But it's not just a sales call. We're trying to see if they're doing anything new that we could do."

The "sales team" at University of Nebraska, says Bartholow, is made up of himself and the shop's customer service supervisor. Together, they cold-call various non-profits in the Lincoln area. To drum up new business, Bartholow asks current clients for referrals to other organizations that might be interested in the in-plant's services.

"There's also a motivational factor to start insourcing," explains Bartholow. "In this economy, we can only get so much business from our parent."