the marketing services label is not for everyone (nov 2013)

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VICTORIA GAITSKELL

In my constant conversations with print service providersmany extoll the virtues of moving beyond traditionalprint to a variety of multimedia marketing services. Lau-

rie Carr and Julie Mavis, co-owners of Cats Media, whomI interviewed back in late 2012 (see Creative Cats, PrintAc-tion, October 2012) provide a prime example of how toexpand as a Marketing Services Provider (MSP). These twoToronto-area entrepreneurs successfully grew their smallprinting business into consultative marketing services byopening a second location in Port Hope, Ontario, withspecific staff and a creative New Media department – sup-ported by dedicated sales techniques.

In spring 2013, my conversations withprinters about growth strategy took a turnwhen I interviewed several successful small-sized printers who helped launch the U.S.-based National Print Owners Association (seeNewborn Print Owners, PrintAction, March2013). My discussions with the founders ofNPOA produced some fascinating digressionson why becoming a Marketing ServicesProvider was out of the question for theirsmall businesses. Although these commen-taries were not relevant to my article at thetime, I archived the discussions with a plan topublish them later when the need arose.

Then in the late summer of 2013, consult-ant Richard Dannenberg, who for 14 yearsowned an Alphagraphics franchise in Macon,Georgia, and whose current company, DPMarketing Services, provides hands-on marketing help forsmall businesses and printing companies, started a longand lively thread on LinkedIn called “After MSP, whatcomes next?” Dannenberg commenced the thread bypointing to one of his recent blog posts that opens: “Sincethe sky fell in 2008, there’s been a steady buzz surroundingthe idea that becoming a Marketing Services Provider isthe solution for printers faced with a deteriorating demandfor their services.”

His post continues to consider how far the MSP conceptmust be developed before it becomes a viable businessmodel. It concludes that the best approach is, instead ofworking with both a customer and an agency, for the MSPto replace the agency by fulfilling the same role and be-coming a part of the customer’s marketing process, withinput into planning, creative, measurement and adapta-tion, plus control of the production timetable.

In the ensuing discussion, several consultants agreedfervently with Dannenberg. One even went so far as to sug-gest that printers should try to transition into MSP work“even if they don’t wish to venture into being an MSP”.After reading their comments, I felt compelled to interjectthat lately I had shared in some enlightening conversationswith experienced printers who explained to me why theMSP model absolutely does not work for their business,and that it is important to recognize why MSP is not a pro-ductive route for every printer. Since several participantsin the discussion expressed interest in the details of theseconversations, it seems the time to report them has arrived.

Printers are not advertising agenciesNPOA President Jace Prejean (Bayou Printing & GraphicsInc., Houma, Louisiana) explains: “Twenty years ago Ilearned the hard way how little I knew about advertisingwhen I decided to put an ad for my printing companyunder Advertising Agencies in the Yellow Pages. It was em-barrassing when people started asking for specialized

products that come from ad agencies, like ad campaigns,commercials, and billboards. Then I realized what an idiotI was. Although I believe that printers are service providersand not a commodity industry, there’s a big difference be-tween that and calling yourself a marketing expert.

“I don’t know enough to call myself an advertisingagency. I don’t want to go out and sell Websites to myclients because I know my employees aren’t good at that,so I’d lose clients over something I had no business offeringthem in the first place.”

Prejean elaborates: “What most printers can offer arethings like direct mail or flyers for ad-vertising inserts. By contrast, one of thedefinitions of ‘marketing’ in my oldWebster’s Dictionary is ‘an aggregate offunctions involved in moving goodsfrom producer to consumer.’ That ag-gregate of functions is what separates usfrom real marketers. Their products in-clude television and radio ads, live ap-pearances, contests, billboards, buswraps, mobile, digital and social media.How many printing companies can doeven half of that? Probably almostnone.”

Scott Cappel (Sorrento Mesa Print-ing, San Diego, California), who man-ages NPOA’s LinkedIn discussion group,says: “It’s one thing to have the ability toproduce marketing materials, but it’s

another to engage high-level marketers in their own game.I’m comfortable sitting in the C-suite, but when it comesto talking about marketing strategy, I’m a fish out of water,because what I do for my own small business will not nec-essarily work so well for a big company.

“I know another successful printer whoinstalled all the necessary technology forMSP and understands how to make itwork, but he partners with agencies as acreative resource. He lets the agencies do allthe creative and just does the executiononce they’ve designed it. Like him, youhave to be cautious with MSP work be-cause it’s different than static printing. Sayyou’ve had a great relationship with amajor client for a long time to the pointwhere you achieved trusted advisor status.If you take on and completely screw up theclient’s MSP work, all of a sudden you’re indanger of losing their entire business be-cause now they start to doubt you.”

Although John Henry (Mitchell Printing& Mailing Inc., Oswego, New York),NPOA’s Director of Programs & Events, does marketingprograms for racetracks and political campaigns, he agreesthat printers are not advertising agencies. “And the agencyworld is probably struggling more than printers. They’redropping like flies right now,” he says. “Success is aboutserving your customers’ needs. If they are looking to youto be a full-service marketing provider, then you need tohire appropriately and make money doing it, but the tran-sition is not as simple as it’s made out to be. If it were easy,advertising agencies would all be making money.”

Henry considered doing more MSP work, but decidedhe would first need to acquire a failing ad agency or oneof their top executives to run the enterprise as a divisionof his existing company. In the end, however, he concluded

the addition would not generate enough profit to make itworth the risk: “I already print and provide a backbone ofsupport for PURLs and multimedia content for four adagencies, but the minute I advertise that I’m in direct com-petition with them, they’re gone.”

“Compete with ad agen-cies?” asks NPOA SecretaryDennis Trump (TrumpDirect, Decatur, Illinois).“No, I don’t think mostprinters do a very good jobof that. The task of becom-ing an MSP has many hur-dles for small companiessuch as ourselves. It takes alot of research, a lot of ef-fort, and a lot of non-pay-ing time for marketing.

“Customers are beatingus up over pennies, whilead agencies bill $3,000-a-month retainers for cre-ative time. I don’t see thatmarket becoming available to us. It would take a Herculeaneffort, and then we’d be competing with our own cus-tomers.”

Time shortage and testing the marketNPOA Vice-President Barry Martin (Copyquik Printing& Graphics, Hagerstown, Maryland) began consideringthe move to MSP in 1981. “I thought it made sense becauseI already have a three-person graphic-design team and be-cause I knew our customers were paying hundreds of dol-lars to an ad agency for design and then bringing thedesign to us,” he recalls.

Because of the marketplace perception, that if you wantgood-quality content marketing, you must hire an agency,Martin realized making the transition to MSP would re-quire both promoting his shop’s creative and gaining aworking knowledge of such current marketing trends associal media.

“If you’re a large company, a dedicated person promot-ing social media is probably a nice tool, but a typical selling

owner of a small business has only somuch time, so you have to decide whichavenue will give you the best return,” saysMartin. “And it’s not necessarily workingon social media.”

Martin has been a direct-mail providersince the 1980s. As volumes declined, headded variable-data printing (VDP) to re-place the shortfall.

Ten years ago he tried venturing intoMSP, after adding a former ad-agency ex-ecutive to his management team. At thesame time, the National Association ofQuick Printers (NAPL/NAQP) asked Mar-tin to join their Board of Advisors, sounder the association’s auspices Martinalso launched a peer focus group of com-panies that, like his, were actively attempt-

ing the transition. “We got together a decent group of eight individuals

who shared their progress and ideas through meetings andconference calls. But personally, after spending two yearspursuing MSP, I became disillusioned with it because ofour lack of progress. In fact since then, I don’t think anyof the focus-group members has had much success withit. In fact, I only know of one or two printers who havesucceeded, but they had to go as far as starting other com-panies.”

Two years ago at a printing conference, Martin askedCarl Gerhardt, Chairman of Allegra Network LLC, one ofthe world’s largest printing franchises, why he should con-

NOVEMBER 2013 • PRINTACTION • 11

Continued on page 12

The Marketing ServicesLabel is Not for Everyone

NPOA President Jace Prejean (Bayou Printing & Graphics Inc., Houma,Louisiana)

Scott Cappel (SorrentoMesa Printing, San Diego,California)

NPOA Secretary DennisTrump (Trump Direct, Decatur, Illinois)

sider becoming an Allegrafranchise after 30 years as anindependent business. Ger-hardt replied that Martinwould benefit from Allegra’scorporate support to becomean MSP, since most smallprinters lack the educationand experience to make thetransition successfully alone.

Excited by this prospect, Martin decidedto test the waters, so he secured Gerhardt’spermission to show a marketing plan Alle-gra had devised for another company tosome of his own specially selected best cus-

tomers, inlcuding a CertifiedPublic Accounting firm with re-gional branches and a principalwho was close to Martin as hisaccountant. “He said, that al-though Allegra’s marketing planwas cool, in realistic terms hisfirm would probably never im-plement a lot of the stuff it rec-ommended.

“Most of my test clients do their market-ing themselves,” says Martin. “They’re own-ers and managers of small businesses, notFortune 500 companies, with only so manyhours to spend. And especially in the last

couple of years, they don’t have a compre-hensive marketing plan or a budget for it.”

He told several Allegra franchise ownersthat he was considering the switch to MSPand asked for their opinion: “They said,that although initially they thought thetransition would help their franchise, itnever happened in practice. Although Al-legra hired experts with marketing degreesand provided other resources, and the fran-chises attended training courses and fol-lowed the recommended procedures, theyjust didn’t find that much interest in theirmarketplaces.”

As a result of his research, Martin has re-confirmed the need to continue focusingon the direct-mail niche, but says he hasalso developed a more successful, market-

ing-focused approach to selling it. Martinhas learned to operate and promote hiscompany’s graphic design capabilities as aseparate service and profit centre; but basedon his successes to date he has decided thatwide-format printing is a more profitableavenue for investment and expansion forhim than MSP. “You have to try differentthings and figure out what’s working bestfor you. It’s not fair to say that MSP is theend-all for everyone.”

Hard work, limited resources, and risk versus low-hanging fruitFor years Cappel has been investigating theMSP model by such measures as an ex-tended membership in PODi, an estab-lished association for digital printing andMarketing Service Providers; training fromexperts in the field; and acquiring andlearning much of the requisite productionsoftware for marketing services.

“Getting the tools and technology forMSP is not a problem for any printers I’ve

12 • PRINTACTION • NOVEMBER 2013

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talked to. Suppliers will do everything theycan to lead you to the water,” says Cappel.“But in the end you have to drink, and it’svery, very hard – so much harder than Ithought it was going to be – especially forthe smaller printer. This is what I’ve expe-rienced, and I feel I’ve dived in really deepto reach this conclusion.”

Cappel says adding MSP ability is not asdifficult for big printing companies withover 100 employees, because they can es-tablish a list of tasks and typically have ex-isting staff for functions like mailing anddata handling. Largers firms can more eas-ily add people or train them, includingtraining a handful of their brightest sales-people in the specialized techniques neededfor MSP. “But my graphic artist specializesin print, not HTML, I don’t have a mailingdepartment to handle data, and I’m theonly sales guy,” explains Cappel. “So, I don’twant to tie myself up with the typical MSPsales cycle of four to six months for a proj-ect that may not even materialize.”

At present, like the others, Cappel hasdecided to invest his energies and re-sources elsewhere: “After making a carefulreview, I realized I was making a prettygood living from printing and fulfillmentof products based on static colour that gotshipped all over the country. Fulfillmentmay not be as sexy as MSP, but it can leadto a lot more revenue, and it’s a less risky,easier path.

“If you’re doing something well and it’sworking, you should just do more of it. I’mnot ruling MSP out forever, but there’smore low-hanging fruit for me to gather togrow my company for now.”

Custom Cross-MediaAlthough none of the preceding five print-ers can name many peers who are makinga success of MSP, they did refer me to twonotable exceptions. Paul Strack, Presidentof Custom XM (North Little Rock,Arkansas) is a former chartered account-ant who discovered his creative bent afterjoining his parents’ printing business (for-merly called Custom Printing Company)in 1990. Although he was intriguedenough by new technology to become anearly adopter of toner-based, on-demand,and VDP services, he has always disci-plined himself to acquire new knowledgefirst before rushing out to buy the latestexpensive technology.

“Our venture into MSP has been agradual transformation over 20 years or so,” he explains. In about 2006, Strackpurchased MindFire software and startedproviding PURLs. He has since expandedinto selling integrated PURL, dimensionalmail (using anything other than a flat en-velope), and highly targeted personalizeddirect-mail campaigns. He relates successin this initiative, particulary over the pasttwo years, to the fine-tuning of his special-ized sales skills, as well as the market start-ing to catch up to the technology. Otherbig turning points came with the renam-ing of his company to CustomXM (shortfor Custom Cross-Media) and his 2008purchase of a Kodak NexPress, his com-pany’s largest investment to date.

Now, in addition to his original plant inan industrial area, Strack has recently established a second, trendy-looking office



in a rapidly growing, artsy district of down-town Little Rock. “As we continue to brandourselves as a marketing company ratherthan just a print provider, we had to sepa-rate the two functions of the business phys-ically,” he reports.

Additionally, with the recent rise of so-cial media, Strack was able to introduceand solidify his new brand with a youngerclientele on Twitter and Facebook. He es-pecially gravitated to Twitter’s minimalist140-character messages and quick repartee.In the course of his Twitter experiments, hestumbled upon a local group of technology

geeks and advertising insiders who havefurther helped him establish his brand. Hepushed himself out of his generationalcomfort zone, started attending theirTweet-ups (meetings) and has subse-quently traced substantial business growththrough new accounts he acquired directlythrough Twitter contacts to the tune of$25,000 in 2009, $50,000 in 2010, and$100,000 in 2011.

His other new service offerings that fol-lowed have included QR codes, mobileWebsites, Augmented Reality, and lunch-and-learn sessions to help clients under-stand the capabilities of these New Media.In recent weeks, Strack added a relativelyinexpensive QU-BD tabletop 3D printer

for experimental purposes and to generatebuzz for the image he is constructing of acreative MSP eager to embrace change.

Curry Printing & MailingNPOA Communications Director ArmandGirard says his mailing company inAuburn, Maine, has been an MSP for 15years, since they have always done directmailing of postcards, brochures, and othermarketing materials for customers. Butlately, because postage costs are rising andInternet usage makes it faster and easier toget the message out digitally, direct-mailvolumes are declining and his business isdoing more work with Web and mobile ad-vertising. “One wonderful thing I’ve dis-

covered about transitioning into MSP isthat most printing companies already havegraphic designers whose skills are verytransferable from print to Web. There are alot of similarities, and a good graphic eyeis the same no matter whether it’s designingfor paper or the screen.”

With his background as a broadcast en-gineer, Girard feels like a techie first and aprint shop owner second. Since he also un-derstands the world of business and mar-keting, he is able to strike a good workingbalance for MSP: “It’s a matter of doing theresearch to see which platforms are thefastest growing and are extendable with orwithout all kinds of plug-ins to make themdo almost anything your customers wantthem to do. [This kind of adaptiveness iswhat the industry calls responsiveness.]Then it’s just a matter of plain old market-ing to let people know what your capabili-ties are and how they can help yourcustomer’s business,” he explains.

Girard’s next offerings will include afully mobile marketing text message that hethinks will supplement his direct-mailbusiness very well: “I believe QR codes andmobile marketing with text messaging willbe a hot thing because more and more peo-ple carry smart phones with them all thetime. Watch how people react instantlywhen their device dings to let them knowa text message has arrived. Think of its po-tential because of that ability to get atten-tion quickly. If a retailer or restaurant ishaving a slow day, they can raise traffic byannouncing a midday special.

“By telling customers, ‘Come in andshow us this text message and receive 20percent off,’ their phones become like a bigcoupon, and you can decide on a day-to-day basis how you’re going to market.” Gi-rard notes that some services will allowpurchasers to resell the service to their cus-tomers who want to enter and distributetheir own mass mobile messages. “Or ifthey’re too busy, they can just give us theirdistribution list and the message, and wecan do it for them. Social-media platformslike Twitter, LinkedIn, and Facebook havetheir strengths, but they are all pull mar-keting. You have to go somewhere onlineto see the ad. But text marketing is pushmarketing. Recipients don’t have to doanything except have their phone turnedon. That’s what makes it so much morepowerful.”

All of the printers profiled in this col-umn showed exceptional candour in theirwillingness to serve as case studies to helpother printers consider the benefits andpitfalls of becoming an MSP. Clearly, thereis no definitive formula for making a suc-cessful transition to MSP, but each of theseprinters pinpoints certain requirementsfor any printer undertaking the iniative.These requirements include: Careful prioranalysis, a realistic market among existingcustomers, a tolerance for risk and foropening a second location, and an apti-tude and almost unlimited enthusiasm fornew technology.

“I always like to find a better way dosomething, to find something differentand new,” says Girard. “If everything isworking well on automatic pilot, I just getbored.”



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