Whether redemption is possible for offenders in the eyes of those wronged really depends on the question as to whether those wronged truly believe people, or businesses, can change. Print managers must be hoping that, for printers, the answer to that question is yes.
For print management (PM) companies have a reputation problem. You don’t have to go far to find a printer that is turned from mild-mannered diplomat to boiling mass of expletive-ridden rage at the mere mention of the PM profession.
This, from the managing director of a large commercial print operation in northern England, who wishes to remain anonymous, is typical: "They are the scourge of the print industry. They buy as low as they can, squeezing the printer’s margins down as low as they can get, and then they sell high to the end-users. They are essentially taking the profit that printers would have made for themselves. The service they are selling simply does not justify that margin."
It’s pretty damning stuff, but most in the PM sector say this is a reputation born out of the malpractice of a few rogue firms in the past. PM, they say, has changed; it now looks after its printers, maintains fair prices and solidifies print’s place in the communications mix through PM becoming more CM – communications management. If true, then perhaps printers should reassess the role PM plays in their industry, yet it may also cause a few to ponder what a PM firm is doing differently now to what the printer could do themselves.
That there was a problem in the past with PM is widely acknowledged by those currently in the sector. When PM first came about, it was to fulfil the need for a better system of buying print whereby a more joined-up and holistic approach could be taken, enabling one contact point for a variable print spend. There was also a lot of waste to cut from the print buying process. While much good was done for the print industry as a result of the creation of PM, those in the sector now acknowledge that some companies took this brokering role too far and lost sight of the long-term objective in favour of short-term gains.
"I am not surprised there is a negative view of PM and I think that in some cases printers have every right to hold that view," admits Simon Biltcliffe, managing director of Webmart. "There have been PM companies in the past that have behaved appallingly and taken everything they could get from the printer without any care for their long-term well-being. I set Webmart up to be the opposite of that – to show that PM could be different."
"The traditional print management model was negative for everyone as it created false expectation, removed the ability to invest and caused problems for the whole supply chain," adds Angus Campbell, managing director at St Ives PM arm, St Ives Management Services (SIMS).
Joint responsibility
While this realisation of past ills and determination to ensure that they are not repeated is welcomed by the majority of printers, some within print say that putting all the blame on the PM sector for suicidal pricing ignores the role printers themselves played.
"I think that it is difficult to solely blame the PM companies for the falling prices," explains Richard Owers, business development director at Pureprint. "We as an industry have to face the fact that we played a part in driving prices downwards. The print managers don’t come up with the price, the printers do. If the specifications go out to 10 people and some come back low, then it is those printers that have taken that price lower. So I think that perhaps the PM companies rather than creating weaknesses in the industry have in fact just highlighted weaknesses in the industry."
Anthony Thirlby, managing director at ESP Colour, agrees in part. He says there are still PM companies out there that do not pay on time and are still less than reputable. However, he chooses not to work with those people and instead works only with those PM companies he can trust.
While it is easy to opt out from a position of strength, however, not all in print are so lucky. Saying ‘no’ to work is difficult when you are struggling to keep a business running and to ensure staff and suppliers are paid. Biltcliffe appreciates the difficulty in doing as Pureprint and ESP have done in opting out of bad relationships, but says printers do have to be realistic.
"The dynamics of the print industry are that if the presses are running then you are getting marginal cost recovery and that contributes to the overall picture," he admits. "But you have to be realistic; you cannot survive by taking all your work on as marginal cost recovery."
PMs clearly used to take advantage of weakened printers, but fortunately, this scenario of being forced into difficult pricing decisions, and indeed PM pricing in general, is becoming less of an issue, according to Anne McLaughlin, business services director at APS Group. She argues that the price bonanza of the early years is now not possible as prices simply cannot go any lower – whether that is through a realisation from PM companies that they can’t push lower or printers being more willing to say ‘no’ is a matter of opinion.
"In the early days, price was a significant part of the business model, but when you are in the second and third generations of print management contracts, price cannot be the sole driver anymore as the cost savings have already been driven out," says McLaughlin. "So PM firms have to bring more to the party now if they are to be successful."
Indeed, over the past five years, there has been a considerable shift in the way PM companies work. For a start, many of them no longer call themselves PM companies.
"We tend to use the acronym RPM now, not Real Print Management, because while print is our root, we have migrated to other areas and RPM reflects that," explains Mark Gray, sales director at RPM. "For us, print is just one of many communications channels we are involved in."
"We would describe ourselves as being in marketing operations," adds McLaughlin. "We are in different channels of execution and our activity in those non-print channels has accelerated in the past six to twelve months."
Gray says the emphasis shift has been a solution to the fragmentation in the communications market as channels to consumers have multiplied amid the technology revolution, with smartphones and tablets at the forefront. It has also been a symptom of clients cutting costs and outsourcing the marketing buying rather than keeping it in-house.
"We are an extension of our clients marketing departments, not an intermediary now," says Gray. "We sell ourselves on the consultation services we offer to our clients, we are not a broker. There is added value in what we provide."
For the clients, the benefits of the new PM model seem clear: they get a single point of contact to expertly manage a broad range of communications channels demanding an equally broad range of skills. To bring that capacity in-house would be very expensive. Unsurprisingly, McLaughlin reports that the new way of working is proving extremely popular.
"We are taking on more of the marketing roles formerly done in-house as clients realise the benefits we can bring," she says.
And yet, there are doubts from some on the buying side as to whether the PM companies are actually as expert as they make out. In particular, there is a real concern that the print knowledge in particular is now lacking.
"I have print management companies ringing me every week claiming that they can help me, but they really do lack any real knowledge of print or anything else I require," says one media buyer from the automotive industry who wished to remain anonymous. "They are just chasing price, but I need a real understanding of the products I am rolling out."
"Anecdotally, as I do not deal with PM companies myself, I have heard that many on the PM side have never seen printing kit and that they do not understand the processes, they are just reading from a script," adds a buyer from a multinational communications group.
Unsurprisingly, the PM companies say these examples must be from rogue elements within the sector. McLaughlin explains that many of the print experts that used to work client side are now in PM companies, as are professionals from all elements of the communications spectrum. Biltcliffe adds that at Webmart there are 683 years of collective print experience to call upon. He adds that as recession hits and budgets are cut, it is the PM companies scooping up the knowledge being let go.
"We harvest the people with expertise in a range of different areas and so we can leverage that across the company and be a single source of the expertise people are seeking," he says.
On the print side, this knowledge certainly seems to be there and proving beneficial for some. ESP’s Thirlby notes that, over the past three years, the understanding of his business and his needs has increased considerably in his dealings with PM companies and he says the expertise now within those PM businesses is extremely high.
Owers adds that the broader remit of the PM companies is having a positive effect on print. He says the consultative approach means that the jobs that come through are the best use of print possible, and because that is more likely to have a positive impact, the overall impression of print as a medium is increased.
The new PM approach is not all good news, for printers though, according to Steve Gilbert, managing director, Print North East.
"Sometimes, the PM companies are an interference printers could do without," he says. "We do find occasionally that the PM company will have highlighted potential problems to clients with a job that if we were involved more directly we could explain or work through easily. I think that sometimes they really do not have enough knowledge and are in the way as a result."
APS’s McLaughlin says that this should not be an issue if you are dealing with reputable PM companies. She says that APS clients get put in direct contact with the printer. "Our suppliers have a lot of expertise and we have to maximise that. We do not exclude them from conversations with the customer, we want them to be visible," she says.
Money matters
Price is also still a factor for several printers spoken to, but Biltcliffe says this is, again, an issue that should not be cropping up if you are dealing with a reputable company. He says that PM businesses should now understand a printer needs to make a decent return in order to invest for the future and that this will benefit both PM company and printer. He explains that Webmart does not force any company to accept a job once it is quoted for, and he adds that Webmart actually helps printers price more competitively.
"We have a tool called Dynamic Price, where the printers give us their cost rates and we profile in real time their prices against the market price," he explains. "So the printer can see what the going rate for that work is. If their price is usually £1,000 but the average market price was £1,200, this would mean they can charge more for their work when dealing direct with customers. We give that information for free without even giving them a job."
The new breed of PM seems, then, like it should be a win-win for printers, yet there is a feeling among some that the service the PM companies have actually migrated to is actually a service the printers themselves could provide – cutting out the middle man and adding margin.
"Printers are now more than capable of managing the print themselves. Most now have a customer service team in place to be able to deliver the account management service that the PM companies provide," says Print North East’s Gilbert.
"A number of printers have adapted
their approach and have become more consultative, and in that sense they are replicating the service of the PM companies," agrees Owers.
While many PM companies have some print capacity, the number of printers with fully fledged PM services is not that high. One company that has made the leap is St Ives with its SIMS business. It was set up initially as a way of managing the orders of St Ives clients placing work with more than one St Ives business. Campbell says it developed organically to become an independent print management – or rather management services – operation not tied to supplying St Ives’ manufacturing businesses, but obviously utilising that print kit and that reputation as a printer.
The success of the SIMS business will no doubt give other print operations the confidence to, as Mitchell and Owers described, cross over to a PM role. However, Campbell thinks this is a transition very few print companies will be able to make successfully.
"The key to our success has been the size of the group. We used the benefits of the existing group – so IT infrastructure, head office space, financial status and all other manner of business functions – in order to role this service out," he explains. "Then you have things like payment of suppliers – if you are not credit-worthy, people will not supply you. Our group financial stability really helped us."
PM is now also, as has been described here, not just about print anymore. Very few print businesses would have the expertise in other communications channels necessary – neither would they have the cash to bring those experts in.
And if PM has really changed as much as it says it has, there is really no need for printers to go to the hassle of taking on that PM role. The deal they should be getting from PM firms should be a fair one and the rush of work without the hassle should be gleefully grasped. ESP’s Thirlby certainly believes the PM companies are essential to his business and he is extremely happy with the arrangement as it is. Owers, too, says PM has brought professional print buying to print that is still having a positive impact on the industry.
Biltcliffe perhaps sums up the benefits of the current situation most succinctly: "From a printer’s perspective, we de-risk the client side, as we pay on time and they don’t have to find out all about how we work. Effectively, we could be 200 customers through one point. So the cost saving to the printers is massive."
The fact we are taking about cost-saving for printers perhaps shows just how far PM has come. While there are still inevitably rogue elements within the sector pushing printers to the limit, the majority seem genuinely to have realised that they are only as good as their suppliers and so the deal for printers is, for the most part, fairer.
While some larger print companies may well be able to cut the PMs out to take on that role themselves, the majority will still require PM clients, and so for the future good of print, essential going forwards as the economy continues to struggle, will be ensuring that change is a permanent one.
