Author Archives: Guy Broadhurst

There are Barcodes and then there are Barcodes!

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When is a bar code not a barcode? When it doesn’t scan, is the answer!

Do you remember the “olden days” when we went from impact printers to laser printers, thinking we’d found some kind of digital paradise, only to face a seemingly unending stream of font issues? Many times I remember hearing, “The font doesn’t look good,” “the spacing is wrong.” Or “the reflectivity of the bar code is different from one press manufacturer to another, so they don’t always read correctly.”
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Injecting new life into newspapers

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Many pundits and experts would have us believe that the demise of the newspaper as we know it is at hand and that newspapers are a weakening market segment for printing in the U.S. There’s no denying that the shuttering of papers like the Rocky Mountain News, Seattle Post-Intelligencer and the daily edition of the Christian Science Monitor posit a profound change in the newspaper industry. But it does not necessarily follow that all newspapers are an endangered species. What it does mean, though, is that the traditional model of newspaper publishing is changing –many would say broken– and that newspaper publishers must create new models for their industry. And digital printing can help.
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FUD Storms and Disruptive Technologies

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Maybe it’s just the uncertainty of the times we’re in or perhaps something more basic is going on, but it really is amazing to me how much FUD is in the air, especially since the economy did an about face on us in 2008. These FUD storms make it increasingly difficult to get accurate information across to prospects, customers, journalists, and analysts alike and for them to keep it all straight. This is especially true when explaining disruptive technologies like inkjet and the ability to incorporate MICR lines on an inkjet printer.

So what is FUD? It’s those seeds of Fear, Uncertainty and Doubt sown by skeptics, technophobes and those whose competing products offer a less compelling mix of technology and benefits. In some cases the FUD comes from those who simply resist the fact that technology is an evolving process and what was considered impossible is now a practical reality. These FUDsters seemingly delight in explaining why something can’t be done or how the promises of a particular technology are all smoke and mirrors. In other cases the FUDsters may be the highly-pressured salesperson at the core of the fight for floor space in a customer’s operation. This type of FUDster needs to move product and in the timeless tradition of sales, is quick to plant any seeds of doubt can help sway a customer one way or another and take advantage of any uncertainty.
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Don’t Let the News Get you Down

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For months now it has been the same old story. You hear it everyday on the news, in the paper and on the web. The financial markets are in the tank (along with my 401K), credit is tight and the entire economy is basking in uncertainty. No matter the hemisphere or market place, it can be just depressing. And then more bad news: postal rates are scheduled to rise an average of 4 percent in May 2009.

Someone said to me a few weeks ago that 2009 would be the opposite of 2008 and there is (hopefully) some wisdom in that message. In 2008 we had three quarters of decent news and then in the last quarter went directly downhill. 2009 looks to continue to be negative for the first three quarters but many of the economic wizards say we could see the start of an upturn in the final quarter. But until then we have to face reality of a significant economic recession. So what do we do? That’s the discussion for today.

Over the past few weeks I’ve been traveling and talking with many customers. As you might expect, while no one is ready to give up there is not a lot of cheer and optimism out there. We are all thinking about the best ways to move forward. Let me share some of what I’ve found.

First, some companies have protected themselves by making sure that they have the print business before adding equipment, which is a good operating policy even in the best of times. They are also taking extra time to better understand customer needs so they can better manage today’s situation while at the same time preparing them for when the economy improves.

The lifeline
Next, the strategy I have mentioned before and want to point out again is that convergence is the lifeline to being prepared for a better economy ahead. The wider the range of jobs and types of applications you are able to run using a relatively narrow range of equipment and software, the better the return on your technology investment and the better you are positioned to survive and even thrive in tough times. For instance, if you make your living printing and mailing bills and statements, adding informative or promotional content to the statement is a natural form of convergence that adds immediate and measurable value to the services you provide. In fact, on March 10 the Money section of USA Today noted that coupons are paying off in this economically stressful time and some marketers are willing to pay to produce coupons that they know are going to reach customers and prospects. Long live onserts and inserts!

And don’t forget, convergence isn’t just about the print engine. Some print providers who have printed transactional documents for years have not merely added some type of transpromo messaging, but are handling an increasing share of their customers’ data processing. This not only makes them a bigger asset to their customer, but deepens relationships beyond print and mail so it’s harder for a customer to leave.

Books
My travels have also taken me to several book manufacturers and while they all say business is down, they still have core segments that are moving ahead, such as religious and legal titles. It’s easy to be skeptical and say these are niche markets, but in a country of 313 million people niche markets can be very lucrative. Anyone who devotes some of their press time to books should be looking for narrow markets where they can fill a need.

Newspapers
Every week or so it seems like another newspaper is closing down, going to an all electronic format or changing from a daily to weekly print publication. Yet while some times are bad for one market, they can be good for another. We are receiving multiple requests to print newspapers digitally and are doing so in different countries worldwide, with more to come. Niches can play a part here, too. Take a any large city with a segment of its population from, say, Romania. Could a printer with the appropriate technology produce the daily paper from Bucharest for local distribution? Chances are the answer is yes, and it’s new business that fills a market need.

I’m sure we all think that its best to hold on to our money reserves (if we have any) or not go any further into debt, but this is also a good time to look for lower lease costs on a new building or to invest in new software to support the ever-changing world of PDLs. There is no magic bullet and none of us have all the answers, but as I travel I’m seeing some rays of sunshine out there, so don’t let it get you down. Look for jobs that are outside of your traditional business and hire some of the talent that could help you look into and prepare for the future.

Thoughts for Years Old and New

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If you look back at the past few months it’s all too clear that change is afoot in virtually all markets around the globe. Graph Expo, which is normally about products and services was more about how many attendees went to the show and whether it be possible for those that did attend to buy the technology they had their eye on. Our industry is not alone.

The Big 3 U.S. automakers get a lot of  press, but consider that Toyota has posted it’s first loss in 70 years. Nissan Motors is pulling out of the Los Angeles Auto Show and almost every new car and truck can be had for a fraction of it’s normal sticker price. Closer to our industry, Apple has announced that the Macworld coming up in January will be its last and Adobe, the company that virtually invented desktop publishing on the Mac, will not even be at Macworld. Trade shows all come out of marketing budgets and companies are cutting every corner they can to conserve cash, the better to survive what looks to be a longer than normal downturn. Marketing budgets are usually among the first places to cut, even though it is proven that companies that continue marketing in a downturn come out stronger than those that do not. The same is true for print providers: It pays to keep listening to and talking with your customers. In our conversations with all types of print shops we’ve noticed the theme, “We still need to increase our competitiveness.  We still need color and most importantly, we need to move forward with this job.”

Survival of the Fittest
While every printer is worried about the economy and whether they can manage with the equipment they have today, it has finally started to sink in that color is becoming the standard and they need to react. For many, it’s becoming obvious they can no longer make do with the older monochrome machines (unless they change some of their applications) but instead they have to invest. But is it a good time? I think the short answer is yes, not because I work for a vendor but because it’s about survival of the fittest.

Just as companies that keep marketing through a downturn come out stronger, so do those that make carefully calculated investments in turbulent times. The more business you can pull in now the better off you are when business begins to improve, especially if you can offer a wider range of services  and print capabilities to accommodate customer needs. I know it is a tough time to go to the well for money but if you can be poised to strike while the economy is down you can be much better positioned for the future.

Beyond Money to MICR
Beyond the questions about money and the economy we have been fielding a lot of questions about our MICR ink jet announcement on the Océ JetStream. Over and over I’ve heard the customers say how  other vendors claim it could not be done, insisting that MICR had to use dry toner. I’m sorry to disappoint them, but we have done it and it does work. So well, in fact that we will issue our MICR guarantee of quality on all checks printed using JetStream MICR technology ensuring a reject rate of less than 1%! Direct Group, a leading direct marketing and fulfillment company with three locations in New Jersey that already uses the standard JetStream system, will be the first company in North America  to take advantage of JetStream MICR printing, when its  installation is completed in the first quarter of this year.

Of course, everyone wanted to see the big machine at Graph Expo, but the set-up and tear down time available didn’t allow us to have the printer there. Many people asked about both color and MICR print quality and we showed many samples of each. As we did, I couldn’t but notice the recurrent question, “Can you really do this with this machine?” The answer is, yes we can, and with a TCO that’s more than competitive.

To make your own assessment, the best place to see the JetStream in action is at the new Customer Experience Center in Boca Raton, Florida. The Center is designed to show the full breadth and depth of Océ products so visitors can see first-hand how JetStream and all our other equipment and software can deliver uncompromising value to their businesses.

It really is a difficult time for everyone, and the secret to everyone’s survival –not growth, but survival– is to make sure that they are well-entrenched and well positioned  for the difficult year ahead. We will do whatever we can to help our prospects and customers alike and we all have to work together to be successful in 2009 and invest in our people and services. We cannot stop: it’s simply not in our nature. And neither should you. Keep selling, keep marketing, and where you can, invest in capabilities that make you stronger.

USPS Losses Raise Postal Rate Concerns

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The USPS has just announced the loss of some $2.8 billion over the fiscal year that ended on September 30. This loss occurred despite a decline in mail volume of some 9.5 billion pieces and substantial efforts to trim costs and operate more efficiently. To be sure, the spike in fuel costs had an impact, but somehow I don’t think that was the tipping point that led to the loss. What this all but ensures is a possibly significant postage rate increase in 2009.

Depending on its size, this increase could have a profound effect on many mailers –and their customers. A bank mailing out a million statements every month is spending over $350,000 a month on postage, so any CFO worth his country club membership is going to be looking at that as place of potential cost reductions. In fact, many if not most, banks, utilities and credit card companies are already encouraging customers to shift to electronic statements. Some banks are making electronic statements the default choice for new accounts and charging a fee if the new customer wants to get theirs in the mail. While it would be a marketing and public relations disaster to force all customers to shift to electronic delivery, I think institutions are likely to begin charging people who prefer receiving hard copies, especially given the state of banking these days. That’s one approach.

The other is to make a statement more useful as a customer touch-point and increase its relevancy to the customer beyond being merely a bill. The knee-jerk reaction is TransPromo, the idea of putting marketing offers on bills. This seems, at least for now, to work best in relatively limited ways, but give it time. The real estate on a statement, though, is every bit as effective for informing and educating customers about products and services, providing advice and information, announce changes in policies, and generally building relationships. Every organization that sends out bills and statements has plenty of other information to communicate and that monthly envelope that’s sure to be opened is one of the cheapest and most effective ways of reaching every customer. The cost of printing and sending out the statement is still there, but when it does more than just being a transactional document it can be money well spent.

There are a lot of layers to this and there is very definitely no one-size-fits-all solution. How do you see postage costs affecting the transactional market? How do you think statements can be used to be more than just a revenue collection medium? Mailers are all looking for answers, and more than a few of them read this blog. Let’s talk!

There’s Something About a Book

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Hot on the heels of its $125 million dollar settlement with book publishers over the company’s plan to scan out-of-print books and add them to its online search capability, Google now wants to be the place people go to read. The book-scanning project is being expanded to include in-print books with the links to buy them. Google expects it to go live sometime in 2009. The catch is that the books can only be read on a computer. This puts them into competition with Amazon which also envisions people curling up with their laptop to read the latest from a favored author.

I suppose there are those who will think this is marvelous, and who will enjoy the instant gratification of buying a book online and being able to enjoy it immediately, but I think it really changes the experience of reading and overcomplicates what is really a simple process. Books are totally portable, can be read anywhere there is a reasonable light source, and don’t depend on batteries (unless you read by flashlight). Books can be passed along to friends and family, and when placed in a bookcase are a monument to the curiosity and interests of the reader. Then there is the tactility of a book, the turning of the pages, and yes, the lack of technology required to simply read. Many of us already spend more time than we’d like staring at a computer screen and I question how many will want to do their personal reading –which is often a time of escape from the day-to-day– just a click away from the distractions of emails and the internet.

Some years back Frank Romano famously pointed out that printed books will survive because of the Three Bs: Bedroom, Bathroom and Beach. He wasn’t wrong then and his insight holds true today.

It’s Hurricane Season. . . in Many Ways!

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Here in Florida hurricane season runs from June 1st to December 1st. While it is a predictable event there’s a limit to what one can do to prepare for it. But no matter what storms cross this big peninsular state, none compare to the current turmoil in the financial sector.

There’s little doubt the situation in the financial and insurance markets will affect our industry at many levels, from day-to-day operations, to expansion opportunities to offering new products and services. Finding and maintaining the appropriate balance is difficult, but one way to manage through this storm brings to mind a term I’ve mentioned before. Today, it can provide a way of seizing opportunity from the jaws of economic fear and financial uncertainty.

It’s convergence. I’ve talked about it many times. It is the idea that different types of documents can be produced on the same type of digital press, but it also that there are ways of making educational, marketing, transactional and other customer-facing information more relevant, valuable and compelling to the recipient.

Thinking Convergently
Finding ways of embracing convergence can enable quicker and simpler approaches to leveraging the technologies you have today and to doing more with less. What I mean by that is adopting existing printing and IT systems not only for more types of documents but also bringing more value to the documents being printed.

Consider corporate printers, by which I mean in-plants and data centers, for which the average utilization rate is about 25%. To augment the overhead associated with this low utilization, some banks, for instance, have gone beyond encouraging customers to accept electronic statements in lieu of hardcopy, and are now looking for ways to charge their customers for the printed version. I have trouble understanding this because the cost of monthly statements is so minimal compared to everything else a bank has on its plate that it is akin to some airlines’ practice of charging for Cokes and bags of peanuts. What it does point to, however, is the opportunity to change the game by looking differently at the entire statement production process –and doing a little convergence.

For example, the majority of bank statements produced in data-centers and in-plants have other information enclosed. These are usually offers for and information about new services, customized savings programs, credit cards, lines of credit, loan programs, all kinds of things. All are generic and if your household is like most, they are ignored and thrown away, which costs the bank money. But suppose the extra pages were part of a TransPromo solution, targeted to individual customers and printed by the in-house print shop or data center. TransPromo is really just a form of convergence, and in this case it means increased press utilization and reduced outside print costs. That sounds like win-win to me. Here’s why.

A recent study of 536 consumers by Print Industries Market Information and Research Organization (PRIMIR) explored 30 types of bills and statements across finance, utility, insurance and medical industries. It found that on average, 92 percent of statements and bills are opened and read, and 22 percent are read more than once. Another study, this one by INTERQUEST, indicates consumers spend an average of 5.6 minutes looking at bank and credit card statements they receive through the mail. With that kind of attention paid to these documents, they seem like a pretty good place to put some relevant information.

Of course some managers or executives will still object, saying doing this is too complicated. So two points come to mind. First is that one of the ideals of TransPromo is to incorporate marketing or informational messages into the actual statement. The difficulty, though, is that this frequently requires redesigning the statement, a costly and time-consuming process. Instead, having targeted, relevant TransPromo messages that “ride along” with the statement pages avoids the redesign process yet lets the targeted messages reach valued customers. You already have the customer’s name and account number on each page of the statement. Adding it to a page with marketing or other information –basic personalization– should not be a show-stopper.

Second, there is a lot of talk these days about how TransPromo documents must be full color. I agree that full color adds impact, but relevant information and effective offers can be delivered using the same monochrome or highlight color devices you’ve been using for the past few years. Don’t let lack of a full-color print engine be a limitation. Use the technology you have at hand to its fullest advantage. This will not only increase your present effectiveness, but prepare you for making a transition to more complex TransPromo documents, perhaps using full-color, in the future.

For any corporate print operations, additional opportunities to increase utilization include marketing materials, training documents, internal reports, and countless other documents that could be printed in-house instead of by an outside supplier. In many cases it is a matter of gaining an understanding of all a company’s printing requirements and looking for the potential points of convergence between documents and available equipment. Or, it may be that shifting enough work in-house can justify the investment in a more capable press, perhaps one that can print full-color documents.

In unsettled times, corporate printers must truly understand all their firm’s document production needs and be poised to seize opportunities, look for ways to implement new ideas and do the most you can with the resources you have at hand. The storms we are seeing will pass and by leveraging technology and thinking convergently, you can survive and even thrive.

The drupa Caveat

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Every time a “drupa year” rolls around there’s excitement and anticipation about what’s to come and what all the new machinery and technology means for different types of print providers. But, with drupa taking place so late this year, decisions are being delayed and equipment vendors and print providers alike are effectively waiting for the next bottle of toner to drop.

On one hand, business owners are concerned about spending their limited dollars on the right solution for their company to expand revenue growth. On the other hand, the operations managers and their teams who spend their days in the trenches may be anxious to replace aging fleets so they can leverage new features, streamline operations, increase throughput, and reduce costs –now rather than later. And vendors need to help provide the right product to the right customers at the right price points.

The drupa caveat

No matter what is going to be shown at drupa, virtually all the big vendors have already shown their new innovations to their most important customers, and will finally roll them out to everyone else in Dusseldorf. Some machines, however, will not be available for a year or longer. And because at least a few customers will have already committed to buying the latest device as soon as it is available and others are already being primed to pull the trigger, some vendors may not be able to meet demand for up to a year beyond the announced delivery dates. This means that some products rolled out at drupa may not be readily available for two years! This potential lag between announcement and availability is hardly ideal in a rapidly changing market. In fact, it makes it increasingly harder for print providers to determine which product or printing system is best for a given set of applications.

One approach is taking smaller steps, closer together rather than bigger ones with longer separated time periods. For instance I look at the growing demand for cut-sheet full-color printers today and see several 60 to 70 PPM machines selling for well into six-figures while others, like Océ’s CS650 Pro, provide much of the same functionality but with a much lower entry fee. This provides printers a lower cost of entry by taking a smaller step into the market for digital color printing. Then, as that part of their business expands, they can add more machines and still have a more productive and more cost-effective solution.

This approach also works for print providers who recognize the potential of full-color TransPromo documents but may not have convinced enough customers to make the leap. Here, an approach and a product solution, such as the Océ VarioStream 9240 that can deliver job appropriate color –from black-only to full-color– can handle a wide range of jobs while customers get ready to move ahead.

It’s not about the product

Still, balancing today’s economic concerns while deferring equipment purchase decisions may ultimately impact whether print providers can rely on technology investments to remain competitive. Some could effectively go backwards while waiting for new technology to become available. The remedy is not letting the product drive the decision process. Begin by identifying the applications you need to produce and what you think is required to produce them profitably. Next, rather than focusing on the products with the greatest visibility or most hype built up around them and trying to fit them to your requirements, look at the companies behind the machines and their approach to the marketplace and to doing business. It’s very important to look for the vendors that invest continuously in their product lines and build products intended to support real (rather than imagined) market needs, and that can provide the support your applications require. As I noted last time, pick the company first. Then work with the company to identify which product will meet the needs you have today and that can be upgraded to meet your needs tomorrow. Which leads me back to drupa.

drupa

The very size of the show absolutely requires that you must know what you want to see before you go. But go with an open mind and an “application focus.” Arrive in Duesseldorf seeking the most effective ways of addressing each of your key apps. Compile a list of the companies you want to consider before you go and prepare to spend time with them in multiple ways. You may wind up starting with a sales representative, but take advantage of the show to meet with product managers, technical people and executives. Meeting with the headquarters staff is the best way to cement the next steps for a future meeting and for testing of real world application files. Also make a point of meeting with a company’s senior executives such as the president or CEO. Everyone you meet should be willing to dig into your applications and business needs to begin developing a plan to help you with your latest challenges.

There is a wide range of equipment and software becoming available that has the potential to transform your business. Basing your choice on the company that best understands your business and the applications you need to run will help you find the best products for your needs today and be able to adapt to those you encounter in the future. Good shopping!

Guy Broadhurst is Vice President of Product Marketing in Océ North America’s Commercial Printing Division. He can be reached at guy.broadhurst@oce.com.