Are your reps selling digital for what it is – a service with lightning turnarounds and personalisation that offers customers unprecedented online access for ordering and tracking? Or are they trapped in a commodity mentality, selling digital as if it were just extra stacks of A2 sheets, going for the best price they can extract in a commercial sector suffering overcapacity, cost pressures and the remnants of the GFC?
More broadly, is your company simply liaising with print buyers downstream – where the ugly price battles are waged – or do you connect to the creative heart and marketing muscle of your larger clients, where the smart, high-margin cross-media stuff and test marketing originates? Are you merely on a ‘need to know’ basis with your key customers, or do you know their business inside out?
At Geon’s 26 sites across Australia and New Zealand, sales forces are cross-trained to sell offset and digital print and, where appropriate, specialised teams sell one or the other. Sam Carter, Geon’s digital business development manager, northern region, speaks of the rapid changes in digital technology that render installed equipment obsolescent, adding a cost burden that a 20-year-old litho press does not. But, of course, digital is more than just offset without the makeready.
For Geon general manager for strategy & growth Tony Onsley, the way the group’s sales teams are configured reflects the company’s twofold approach to digital. It can be the best method to produce the most cost-effective print for the client. But perhaps more excitingly, it is a launchpad for on-demand print and variable-data. “In the latter two areas, the service element creates a very different approach to selling,” says Onsley.
Just as most Geon sites have digital production zones sharing the same space with litho, the front-end process is the same, with account managers taking charge of both offset and digital elements of a project.
With a mix that includes colour and black-and-white commercial, large-format inkjet and inkjet webs, enhanced by services such as design, print management, direct marketing and mail, data and inventory management, Geon’s sights are set as much on the creative and marketing departments of its key corporate clients as on procurement people, says Onsley. “As a provider of communications solutions and services, we have a seat at that table. We have a lot of experience and knowledge about what has worked for our clients and we research products and case studies. We sit around the table with our clients’ marketing people and their creatives.
“Some are more proactive in that area than others. There’s certainly a lot of education needed upstream in terms of the capabilities we have available to them. There’s still a misperception that you can’t get the same quality out of digital as you can with offset, or that cost-per-unit is the only way to buy print.”
Geon’s web-to-print services, which Carter describes as “a way for clients to interact with Geon in a smooth and streamlined fashion”, also have an impact on the bottom line. Onsley sees web-to-print as an automation tool that allows Geon to keep a lid on digital print’s unit costs that would otherwise be driven up by the large number of relatively small jobs.
The digital divide
Mike Jones, managing director of Sydney-based digital printer Corporate Document Management (CDM), has seen both sides of the digital-offset divide over three-and-a-half decades in printing. He talks about “the death of the salesman”. Some sales reps try to discount from behind a computer screen, he declares, and some “aren’t sales people, but order-takers”.
Jones cut his teeth in offset at his father’s sheetfed house, AOS, in Rosebery, the site of his present company. “Offset reps will add together costs and add a mark-up. But digital isn’t like that – it’s cost per impression, and that impression is made up of characteristics like click-charge, paper cost, software and upgrades, delivery, and then a mark-up, which we have generally done at 25%. Offset reps will offer to “split percents” and talk about 3% or 4%, and it just doesn’t apply in digital.”
The focus for CDM’s near 40 employees has been on what Jones calls “second- and third-tier clients”. The work is anything from A2 to A6, on a Xerox fleet comprising digital colour and black-and-white, including the iGen and Nuvera range.
Jones sees no sense in competing with “the large equity group players, equipment groups or print management companies”, preferring to work alongside them when dealing with ‘top-100’ tier account clients.
Taking a less cost-centric approach to pricing digital is also a strategy at Adelaide-based Print Matters, The five-staff, 18-year-old offset and digital business prints general commercial orders mainly in the B3 format on a Speedmaster SM 52, and digitally on a Xerox 6060, with a 4112 for B&W work.
While offset runs can be as high as 70,000, the company offers turnarounds down to 24 hours, a service element associated with digital, says managing director Stephen Thomas.
He is aware of hazardously tight margins on digital, due to the relatively high price of quickly depreciating kit, and a high service element relative to volume, whether that service is in personalisation, web-to-print or simply a snappy turnaround.
Print Matters maintains an internal minimum-price list as a guide for sales. Pricing the value of the service, not the height of the stack, is a rule of thumb for offset too. The company cannot hope to compete with the heavy hitters on price alone. “If a customer is happy to pay, we’re happy to pull out all stops for them. We have a minimum pre-press charge, which allows 10 sheets off the machine for $55. But if the customer wants it in an hour, it will be $85.” Another house rule is smaller customers pay cash on delivery.
Selling digital as if it were offset is a fast track to problems, says the head of Brisbane digital company ColourWise. A new era has dawned for the company, with the move of its production facility from the CBD into Worldwide Online Printing’s vacated premises in the suburb of Murarrie some weeks ago. Managing director Martin Bamforth says the 16-year-old company, which he acquired in 2002, has found “the right niche”.
Its 20 staff service their corporate customer base with quality, timely SRA3 document printing – such as prospectuses and annual reports – from an HP Indigo 5500, Xerox DocuColor 8000, and a DocuTech 6180, charged at reasonable prices.
“In print sales, you need to look beyond the click charge,” says Bamforth. “You need to know your costs and factor them in. These include financing and amortisation of your equipment, staff costs, space rental and overall costs of operating your machinery.”
He has seen a lot of digital kit dropped into south-eastern Queensland in recent years, much of it into offset operations, but believes these companies “are trying to sell digital on a margin, as if it were offset… that’s a slow but sure way to go under”.
He reckons the key to selling digital effectively is finding your particular specialisation. More than a printer, he says ColourWise “is seen as a valued consultant by a lot of our clients”.
For those companies that run digital alongside offset, there’s a risk that the newer technology will eat into litho’s share. The goal posts keep shifting as digital gets more cost-effective at longer runs. It’s an issue that Alan Falkson of Worldwide Online Printing’s Perth West End franchise knows only too well. The Canon house operates an ImagePress C6000, and a 1110 Lite for monochrome, an ImageRunner Advance 9075 for presentation-style jobs and an ImagePrograf 8300 for posters and banners.
Falkson says repeat customers are demanding an ever shorter turnaround time, which means previously booked jobs sometimes have to be rescheduled. And although digital printing is quicker, the finishing takes the same timeframe as traditional printing.
“Many of the digital jobs are simple, easily quoted and printed ‘staples’. They are generally processed as cash sales rather than invoice-statement type jobs. The larger jobs and customers do require an account but this is to be expected.”
He says the time-consuming aspect of digital is setting up multi-page booklets to best utilise the full sheet size, in order to minimise the number of clicks, and having to compensate for bleed. Many jobs have not had this factored into their spreads and artwork.
The company’s sales force sells across the technologies. “In our case, we all need to have knowledge of digital and offset, as they often merge with each other, depending on the quantities and deadlines involved. In many cases, we may supply the urgent deadline digitally and the balance as an offset job.”
Falkson sees a risk of digital cannibalising offset sales. “This has been an unavoidable trend, especially with the latest technology offering very competitive pricing at a reasonably high standard up to about the 2,000 quantity mark.”
Currie Group director Phillip Rennell identifies opportunities created by the digital side of a business for filling offset capacity on the other side of the production floor. He sees “efficiencies (offset transfer), and value-add opportunities (new services and applications)”, with customers reporting increased profitability after adding HP Indigo kit.
Learning curve
Razer Graphix, a digital-only operation at Bayswater in Melbourne’s outer east, packs a fleet of five Konica Minolta machines, and is the vendor’s largest site in Victoria, comprising two colour Bizhub PRO 6500s and three monochromes, a Bizhub 1050 and 1200 , and a Xerox DocuCentre 1100.
Managing director Alan Rye runs the 18-year-old family company with partner Sue Rye, and a staff of seven. The 85% core of Razer’s business is SRA3 work to the trade, and its clients tend to be offset houses that have not yet taken the digital plunge because of “the learning curve with digital”, reflects Rye.
This knowledge gap also centres around the continuing hang-ups some of the older guard have with quality issues. Another element stalling wider digital uptake is the fact that in offset-only operations, the bindery equipment is set to finish large sections of sheetfed work offline, rather than the inline or nearline requirements of 320x450mm digital.
By printing and finishing it all in-house, Razer Graphix has managed to tamp down on prices to the trade, says Rye. “If we have to do a job overnight, we can put it on all three colour machines.”
As economic conditions tightened throughout 2008-09, Rye noticed an increase in digital orders, as print buyers, afraid of being stuck with excess print, showed a preference for short runs over lower costs per serve.
Short runs are more profitable on digital, but the lower dollar value means there’s a risk of spending too much time on them. Mark Harvey, Canon’s general manager of production print systems, says it comes down to good management. Additionally, automated quoting and planning systems enhance productivity, alerting printers to problem spots where they might be over-investing their time.
Steve Ball, business development manager at Fuji Xerox Australia, summarises the difference between selling offset and digital. “Offset sales professionals have traditionally sold ‘up’, by increasing a print run at a small premium. A digital sales professional, especially one focused on new business development, really needs to focus on the application and the client’s business requirements.
“From that point, they need to determine how best to re-engineer an application to play to the strengths of variable data, customised pieces, on-demand printing, and cross-media communications.”
Knowledge gap – Digital sales training
Ian Waltz, Printing Industries national manager, learning and development, says he gets requests for training courses focused specifically on selling digital, though there aren’t any courses coming up in the near future. He admits that the industry is “a little bit short on trainers in that area”.
One educator is Neil Bown, who has run sales courses for the association in the past. Bown says: “There is no one I know of specialising in digital sales. It goes back to the industry not selling print properly as a whole.
If you sell print properly as a whole, you’ll sell digital properly.”
Digital sales training is hard to find thanks to a combination of “lack of expertise and an industry not known for spending a lot of training”.
Bown points to digital sales courses offered by machinery dealers, but concedes these are driven by vendors’ needs to shift their machines.
Fuji Xerox Australia is held up as having one of the most comprehensive digital training offerings. They run courses out of the Epicentre in Sydney. The ‘one-to-one experience’ and Profit Accelerator products are examples of ‘business development tools’, a suite of training products. Other players in the vendor community also have business development tools.
FXA business development manager Steve Ball says: “Bona fide sales training is not something we do in the Epicentre. But we enable salespeople to sell digital by giving them solutions that are easy to digest and demonstrate.”
He agrees there is a lack of digital sales training across the broader industry. “If your out take is there’s a gap out there for training from a non-partisan party, you’re right. There isn’t any.”
One person who would love to see more digital print sales training is Trinity Nebauer, managing director of print management company Current Print Solutions. She “has done a lot of sales training” but says the best was a five-day course run by Bown.
Nebauer reckons one of the main reason digital sales skills are lacking is that while many offset sales reps cut their teeth on the factory floor, there hasn’t been a similar route in the brave new world of digital. “There was never that kind of digital apprenticeships to work their way up into sales.”
She’s emphatic about the positive impact of sales training. “If you have an educated sales force, the client benefits from that. You only need to go into Harvey Norman – you know
the difference between someone with good product knowledge versus a salesperson who clearly has no clue.”
But the reason why training has become so scarce goes back, of course, to the GFC. “When the economy gets tough, and print companies are doing it tough, it is very tough for a printer to invest $10,000 to get four people trained up on a five-day course,” says Nebauer. “I have always been a big believer in training, but I have got nowhere to go and spend my money to get that done.
If there is, let me know.”
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