Author Archives: Andrew Paparozzi

About Andrew Paparozzi

Andrew D. Paparozzi is Senior Vice President and Chief Economist of Epicomm, a not-for-profit business management association representing progressive companies in the graphic communications industry. Under his direction, for more than 20 years the Epicomm Research Department has provided timely, accurate analysis of the commercial printing industry’s performance and prospects. Among the industry’s most respected speakers and writers on economic trends, Andy has developed Epicomm’s unique 300+ member State of the Industry Panel, whose members provide regular survey feedback on economic performance and industry issues. A defining characteristic of Epicomm research is that it gets behind the numbers to provide insight and context and to anticipate the economic, technological, or social trends that will define the industry’s future. NAPL researchers build relationships with those surveyed, nearly all of whom have been Panel members for at least four years, and many for 10 or more. Their trust in Epicomm encourages the candid discussion of business issues, strategies, successes, and failures, and results in Panel members sharing insights and information they will not share with anyone. Each year, Andy is a featured speaker at major industry events, gives dozens of presentations to industry groups and companies, and is widely quoted in the graphic arts trade press. He is the principal author of such major Epicomm studies as The State of the Industry Report, Capital Investment Study, Digital Services Study, Printing Industry Profile, and Printing Business Conditions. Prior to joining Epicomm, Andy was employed by The New School for Social Research in New York City, where he analyzed the U.S. Department of Agriculture’s Food Stamp Program and the New York Metropolitan Transportation Authority, for which he developed a reduced-fare program for low-income riders of New York City’s public transportation system. He is a Phi Beta Kappa, Summa cum Laude graduate of Boston College, where he received a Bachelor’s Degree in Economics, and holds a Master’s Degree in Economics, with a concentration in econometrics, from Columbia University. He has taught mathematics, statistics, and economics at various colleges.

WHAT DO WE WANT TO BE?

By

My EPICOMM colleagues and I devote a lot of time to studying our industry’s most successful companies. We’ve learned that some have diversified broadly, while others have stayed focused on printing—including lithographic printing; some provide commodities, while others provide highly customized services; and some serve a broad range of markets, while others specialize in a few.

These companies prove that there is no single path to success in our industry—i.e., we don’t have to be this or that. We do, however, have to select our value proposition carefully and understand exactly what’s necessary to excel with that proposition.

For example, if we want to be the low-cost producer in a commodity market we must be prepared to compete with companies we’ve never had to compete with before because the Internet and digitization are letting everyone into everyone else’s business. If we want to be a one-stop shop we have to integrate—not simply add—services into programs that our clients value or we end up looking like everyone else who adds but doesn’t integrate. And if we want to be a marketing service provider we have to cultivate news skills in sales, marketing, business development, database management, IT, and other critical areas because the services we’ll be taking on are very different from our core printing services.

So what do we want to be? We have more options than ever.  The key is to base our selection on a careful evaluation of our resources, circumstances, and goals—not on what’s hot or what the competition is doing. That’s one point on which all the leaders we study would agree.

THE STATE OF OUR INDUSTRY: IMPROVED BUT FAR FROM TAKEOFF SPEED

By

In a few weeks we will publish our annual State of the Industry Report. The report describes our industry’s performance as improved but still far from “takeoff speed,” or those consistently healthy gains that lift prices and margins. Among the key results:

  • Sales have now increased three consecutive quarters, by an average of 2.4% per quarter, our strongest growth since 2007.
  • At $79.4 billion sales are up 3.3%, from $76.8 billion, in 2011 but down 19.0%, from $97.9 billion, prior to the Great Recession.
  • Prices are still at or below year-earlier levels for 60.7% of the companies we survey and pre-tax profitability is still at or below year-earlier levels for 53.7%. Where profitability is up, it’s most often because of something a company has done to increase revenue and decrease cost rather than moderated competition.
  • Growth is expected to continue at current pace through 2015. Despite recent gains and record consolidation—over 5,000 establishments lost since 2007 and over 9,300 lost since 2000—demand for what we do is still running too far behind supply for growth to be much stronger.

Our report also includes the products and processes believed to have the most growth potential over the next three years, keys to print’s future, and keys to winning that future. Its “Ideas for Action” help answer a question every one of us should be asking: Since the industry isn’t going to get us to takeoff speed what are we doing to get ourselves there?

Hearing the Voice of Our Best Customers

By

In his blog “How to Protect Market Share,” burnsattitude.wordpress.com, Kevin Burns writes the following: “A recent survey of senior executives showed 80% believed that their organizations offered a superior customer experience. When surveyed, only 8% of their customers actually agreed.”

Maybe those executives are in industries that are growing rapidly, have work to spare, and only limited competition, so they can get away with being so out of touch. We aren’t. Every one of us is in a pitched battle for market share. We don’t win by assuming we know what clients think of us or what they value most. We win by verifying—by hearing clearly and regularly the voice of our best clients.

We recently asked the heads of some of our industry’s most successful companies how they hear the voice of their best clients. Here’s some of what they told us:

• Meet frequently on an owner-to-owner/executive-to-executive basis—“meeting and meeting, listening and listening,” is how one owner puts it—to hear the client’s voice directly and unfiltered by anyone—including sales reps.

• Team selling, subject matter expert selling, and consultative selling to keep the sales process focused on what’s most important to the client, not the sales rep.

• Hang out physically where clients hang out. Attend their trade shows and industry events, read their business and trade press, joint their associations, etc.

  •  Hang out physically where clients hang out. Attend their trade shows and industry events, read their business and trade press, joint their associations, etc.

• Hang out virtually where clients hang out. Know where in the social media world clients hang out—Facebook, Twitter, LinkedIn, a forum or list serve—and hang out there, too.

• Use the NAPL eKG Competitive Edge Profile™ (http://napl.org/ekg/ekg-competitive-profile-more-info/) to measure how they rate compared to the competition in the areas most important to their customers, to identify competitive strengths and weaknesses, and to aggressively build on the former and correct the latter.

Leaders agree that there is no single best approach to hearing the voice of the client. To the contrary, different clients will be responsive to different approaches. The one thing they agree we can’t do: Sit back and assume we have it all figured out.

What are you doing to hear the voice of your best clients ?

The Future of Print

By

Everyone has an opinion about it. But we’re most interested in what the people closest to the action—owners and managers of companies that print—have to say. So last month we launched the Future of Print Survey. Early results are in. Among the key numbers:

• 53.9% expect the total demand for print (all products, all processes) to stay around current levels over the next three years. In comparison, 26.9% expect demand to decrease, 15.4% expect demand to increase, and 3.8% aren’t sure what to expect.

• 73.9% expect print’s share of their company revenue to decrease between now and 2017, 8.7% expect print’s share to increase, and 17.4% expect it to stay around current levels. Among all companies surveyed, print is expected to decline, on average, from 73.9% to 64.6% of revenue.

• 57.7% believe direct mail has the most growth potential of any printed product, followed by promotion (other than direct mail), wraps and banners, and packaging, each cited by 38.5%.

Many we’ve surveyed emphasize that the future of print will ultimately be determined by its ability to deliver value. The comparisons they draw between what print was and what it is show that ability is hardly static:

• Generic direct mail compared with highly personalized direct mail carrying “QR codes or pURLS that allow you immediate feedback on the success/failure of the piece.”

• Mass-market catalogs compared with “on-demand, evergreen catalogs with variable-data processing tailored to individual needs and delivered very quickly.”

• Traditional business cards compared with cards with “QR codes on the back to scan contact information directly into the phone without error.”

Of course the innovation will continue, with print incorporating new ways to create value over the next three years, just as it has over the past three years. But understanding only the technology side of the innovation, the “bells and whistles,” isn’t going to be enough. The opportunity for every company in our industry is to understand how our clients and prospects can benefit from the innovation—how it can help them get noticed, whether in the mail box or the retail aisle, attract and retain business, better understand their target markets, increase revenue, decrease costs and waste, etc.—and then to communicate those benefits to them, never assuming they just get it.

Hearing the Voice of Our Best Customers

By

In his blog “How to Protect Market Share,” burnsattitude.wordpress.com, Kevin Burns writes the following: “A recent survey of senior executives showed 80% believed that their organizations offered a superior customer experience. When surveyed, only 8% of their customers actually agreed.”

Maybe those executives are in industries that are growing rapidly, have work to spare, and only limited competition, so they can get away with being so out of touch. We aren’t. Every one of us is in a pitched battle for market share. We don’t win by assuming we know what clients think of us or what they value most. We win by verifying—by hearing clearly and regularly the voice of our best clients.

We recently asked the heads of some of our industry’s most successful companies how they hear the voice of their best clients. Here’s some of what they told us:

• Meet frequently on an owner-to-owner/executive-to-executive basis—“meeting and meeting, listening and listening,” is how one owner puts it—to hear the client’s voice directly and unfiltered by anyone—including sales reps.

• Team selling, subject matter expert selling, and consultative selling to keep the sales process focused on what’s most important to the client, not the sales rep.

• Hang out physically where clients hang out. Attend their trade shows and industry events, read their business and trade press, joint their associations, etc.

  •  Hang out physically where clients hang out. Attend their trade shows and industry events, read their business and trade press, joint their associations, etc.

• Hang out virtually where clients hang out. Know where in the social media world clients hang out—Facebook, Twitter, LinkedIn, a forum or list serve—and hang out there, too.

• Use the NAPL eKG Competitive Edge Profile™ (http://napl.org/ekg/ekg-competitive-profile-more-info/) to measure how they rate compared to the competition in the areas most important to their customers, to identify competitive strengths and weaknesses, and to aggressively build on the former and correct the latter.

Leaders agree that there is no single best approach to hearing the voice of the client. To the contrary, different clients will be responsive to different approaches. The one thing they agree we can’t do: Sit back and assume we have it all figured out.

What are you doing to hear the voice of your best clients?