As a typesetter back in 1997, one of Dalton’s clients was Chanel, which produced quarterly printed samples in runs of 250 but only ever needed 20.

When concerns were raised about this level of wastage, an idea formed in Dalton’s mind. He saw a gap in the market for high-quality short-run print for London’s marketing community, and 1st Byte was born, quickly gaining a reputation as a pioneer in leveraging digital technology for environmentally friendly short-run work.

The firm steadily built its way towards a turnover of £2.5m, but when it plateaued in the mid-noughties, Dalton and his fellow directors started to cast around for a way to return to growth. In April 2006, the firm replaced existing Indigo machines with a pair of HP Indigo 5000 digital presses, which had a dramatic impact. The improved productivity was a revelation and led to a change in the firm’s strategy. Seeing one guy running two 5000s one Saturday morning, we realised we could get much more work through, so we could look at our prices and our run lengths, says Dalton.

Up until 2006, the firm averaged a million clicks per month. In 2007, it averaged more than two million and last year some months crept over the three-million mark. The break-even point where a digital job could compete with litho also went up. It used to be that if it was more than 500 copies and larger than A4, a job went litho, says Dalton. But we’ve just done a 6,000 run of greetings cards four-back-one – we checked litho prices but it made economic sense to keep it in-house.

While the number of pages has grown, one challenge has been falling average order values, which means sales haven’t escalated as fast as volumes. Average order value has fallen 20% since 2004 as a reflection of increased competition in the digital market. While improved productivity means the firm could be more competitive, it hasn’t had it all its own way. Digital print is taking a hammering because litho is – we’re noticing a knock-on effect, he says.

Despite the pressure, it succeeded in increasing sales. While 2006 had a modest 5% growth, 2007 showed a more impressive 35% rise in sales to £3.7m. Last year was tough with growth slower than initially projected, but the company still anticipated hitting £4m.

Sales growth has required some creative thinking and savvy marketing. For instance, turnaround times were typically 24 to 48 hours – If there is more than an hour of finishing, it will take two days or cost more, says Dalton – but customers asked about lower prices for slower turnarounds. The firm responded with a service called ‘2nd Byte’. If a client can wait five working days, the service gives the benefits of short runs without the overhead of a quick turnaround.

With increasingly long run lengths and turnaround times, terms like ‘short run’ and ‘short turnaround’ don’t do the company justice – Dalton defines it as a digital printer, while stressing that short run and quick turnarounds are still central to its offering. He takes a marketing-led approach to the company’s business proposition; promoting it heavily and appropriately has always been central to the strategy.

Marketing has been key to our success, he says. Even though word of mouth is the most common source of referrals, he believes advertising helps keep the firm’s name in clients’ minds. Most people in print recognise the name; we’ve got fantastic brand recognition. As well as on-the-page advertising, the firm invests in Google Adwords and has a slick website, which incorporates a virtual tour of the headquarters. The site contains lots of advice about 1st Byte, including prices and services, tips for design and artwork submission and downloadable templates for folders to ensure clients’ designs work with its range of die-cutting dies.

One lesson Dalton learned early on was the importance of post-press. The firm has invested heavily and devotes an entire floor to finishing. Print might be the clever stuff, but what gives clients confidence is the finishing kit. Most of ours is duplicated. We’ve always invested in machines, mostly litho finishing machines. Following a £250,000 investment in post-press equipment, 1st Byte had to pack up and move east from its Soho site to the current location in Bakers Yard, Clerkenwell.

The company is also in the process of getting ISO 14001 and FSC Chain of Custody certification. FSC is its customers’ priority, so – as befits a marketing-led firm – the certification has become its focus.

When it comes to sustainability, Dalton is full of praise for the business’s MIS; he calls Tharstern the most important machine in the building. The firm asked Tharstern to develop a dashboard so that anyone in the business could view the status of any job. The dashboard is colour-coded to help staff prioritise urgent work.

Sales have always been core to the growth strategy, but acquisition was also on the radar. One came along serendipitously at the end of 2006 in the form of Gary Swift’s Docklands-based digital print business, Raging Thunder. Dalton explains: He came to me and said ‘I’ve either got to invest to compete with the likes of you, which means putting my house on the line again, or I can sell up’.

They struck a deal for £600,000, with Swift remaining at the business for 18 months. One of the attractions of Raging Thunder was its e-commerce system, says Dalton. The firm has now absorbed the Press4Print platform into its own website. It also brought on board some high-profile and valuable customers with long-term contracts for business cards and stationery, including Shell and Office Depot. Now, 1st Byte is looking to win over contract customers to the web-to-print stationery offering, which is run separately to the rest of the business. 

New horizons
While 1st Byte was built around Indigo presses – and Dalton is still convinced they offer an edge in quality that is important for the majority of the firm’s work – it has long-realised the need to deliver work such as wallets, six-page A4, landscape A4 books and A2 posters that were too big to fit on an SRA3 sheet. It runs a 50cm-wide web-fed Xeikon 5000 digital press to meet that need. The device has its own limitations: the 11m of paper waste from changing the web limits to orders worth a minimum of £100, and there are other flexibility and quality drawbacks that restrict its volumes. The printer is also dipping a toe in the water with large-format to meet the need for posters bigger than the A2 possible on the Xeikon. It has an HP Designjet machine, which is likely to be joined by a second machine and dedicated finishing kit.

In addition to the stationery work, 1st Byte has another contract customer, neighbouring firm Moo, which offers personalised cards online on a global basis. It has proved to be a lucrative partnership, and 1st Byte now dedicates two slots on its presses per day to fulfilling Moo’s orders. It even had to upgrade its RIPs to be able to handle the huge number of personalised images in the job.

One facet of digital 1st Byte doesn’t exploit – for now – is personalisation. Dalton has good reasons not to and a strategy up his sleeve for the next phase of the firm’s growth. We couldn’t do it from here. We don’t have the space, we’re not a fulfilment house, and we never take on what we can’t complete ourselves,

he says. We’re talking with potential clients about setting up a site outside central London to do it.

If the need for post-press for short-run work could push it east from Soho to Clerkenwell, there seems no reason personalisation couldn’t inspire another move. The opportunity for growth and a taste of further success should be incentive enough.

Company 1st Byte
Turnover £4m
Sector Digital print
Staff 47
Issue Sales had stalled
at £2.5m
Solution Reassessed strategy and acquired a rival to bring web-to-print and contract work

INSPECTION LESSONS: SHORT-RUN SUCCESS
• When considering kit, don’t just look at headline speed. Ask about uptime, productivity and overall equipment effectiveness
• Be aware of the pressures on your pricing from new entrants to your sector and knock-on pressure from other sectors
• Marketing and advertising are powerful tools for brand recognition and growth, even for word-of-mouth recommendation
• MIS is central to a successful business, and in digital, a live view of production is essential as it’s impossible to schedule
• Finishing power is just as (if not more) important to the success of a fast-turnaround business as digital presses