In late 2006, US research body The Industry Measure published a survey of print buyers who were looking at non-print services offered by printers; it was no surprise to discover that fulfilment and inventory management were voted by 35% of all respondents to be the top-ranked ‘extra’ service
they required.
If a client is looking for print, there’ll often be a raft of attendant needs to be fulfilled as well. Taking the time to learn more about the customer’s business model is the precursor to identifying what those are, and how best to meet them.
The results can be dynamic, not least in a niche sector. Taking a direct interest in supporting the effectiveness of point-of-sale (POS) material led the £20m turnover SMP Group to establish in March its The Last 4 Feet operation. The firm (which takes its name from the marketing aphorism that many consumers are persuaded by POS displays in the ‘last four feet’) has already secured new group business, says business unit director Neil Johnson.
Better returns
“The best way to describe The Last 4 Feet is as the Group’s below-the-line specialist agency, with a brief to increase ROI for brands and retailers by understanding what works and what doesn’t work in a store environment,” Johnson says. “Obviously you have to deliver quality and service at an attractive price.
Ultimately, though, it’s the extra stuff that helps the client move its business forwards with print.”
Success for the SMP Group on the back of The Last 4 Feet proposition has been dramatic: it has already gone from zero turnover to trading on a pro rata basis of £2.6m via helping to win a contract for the Royal Bank of Scotland – a sole supply deal for all in-branch POS and outdoor advertising work. “It’s totally new business won off the back of the print proposition,” says Johnson. Last 4 Feet aims to contribute between £10m-15m to SMP’s top-line revenue by 2010, by which time group turnover is expected to hit £40m.
Service focused
Johnson adds: “We’re working on two live tenders right now: one for a major entertainment brand and the other for a leading DIY chain. Those two added together would be worth about £6m.”
While plenty of firms are talking to printers about such added-value services, Johnson believes the print industry has been found to be “a little bit lacking.”
“A lot of printers talk about innovation in terms of substrates or machinery,” he says, “but the real way forward is in client service. Total in-store marketing in the UK is probably worth around £1.2bn per year, of which maybe 50% is wasted through poor compliance and poor implementation. Helping clients understand how not to waste that £600m is key.”
Bestriding the retail sector is the £102m turnover Bezier Group – coincidentally, Johnson’s old stamping ground – half of whose 11 UK sites are now dedicated to supporting a burgeoning fulfilment operation, says chief executive Mark Shaw.
“If you talk about fulfilment in its own right, you’ve got to offer the best service you possibly can to compete with a dedicated fulfilment house. Likewise a better pricing structure, because you are providing an end-to-end solution and can make the margin throughout the process,” he says. “You look at services at both ends of the spectrum; you look at what you’re providing and then try to move either side of that: selling upwards with creative solutions, and downwards with fulfilment and implementation. That does attract new business, certainly in terms of a partnership relationship with customers.”
Allocating 33,500sqm to fulfilment was less of a risk for Bezier because, Shaw says, the firm has always had the backing of its clients. “But if you’re a £3m-£5m commercial printer operating as one of a client’s roster of 20 or 30, then you’re not really a partner but a commodity supplier. It’s very difficult to get out of that and to move up to a partnership level.”
Other revenue streams
Not necessarily so, if privately-owned Newcastle-based Potts Printers is anything to go by. Potts’ service-orientated management style has lifted turnover from £500,000 to £8m in just eight years. While a proportion of its growth has been driven by a steadily maintained plant and kit re-investment programme, Potts has built a valuable revenue stream out of a chance request from existing customer Akzo Nobel to manage its stock, says sales manager Dan Tobin.
“We’ve taken that model and sold it to other customers,” Tobin says, “anything from a storage-picking-and-packing operation to the fulfilment of a campaign. We now print in six-month batches and have extended our warehouse to 1,900sqm so that we’re able to take over control of that stock for them.
According to Tobin, while two-thirds of Potts’ customer base has traditionally been local, over 80% of new business is coming from outside of the region, including a notable success with Newhaven-based Parker Pens. “When we first started printing for Parker four years ago, it had over 30 suppliers. Now it’s just three. You don’t to stay on that tight a roster unless you’re coming up with new ideas,” Tobin says.
PUTTING ON A GOOD SHOW
POS installation
However well-produced the print might be, the bottom line is how fit it is for purpose – no more so than in the POS sector, where according to Mori an average of 46% of shoppers change their minds as a direct result of in-store display material.
Eye-catching display units produced by the SMP Group in support of DVDs of the recent BBC TV series Primeval, benefited through The Last 4 Feet input on in-store placement and installation.
Typically, The Last 4 Feet undertakes preliminary research into how to best place the POS material, including identifying hot and cold spots in the store by filming shoppers and by general observation; influences design accordingly; carries out the installation; conducts a store audit to ensure that displays are in place, properly stocked and in good condition, and measures the results.
“The client, 2Entertain, exceeded its sales target by £155,000 over an initial outlay of £40,000: great business by any standard,” Johnson says. “What The Last 4 Feet adds to the SMP Group’s core product is that it makes it work better.”
