Would you call yourself a service provider or a manufacturer? What’s the difference? Why should commercial printers care whether they’re a manufacturer or a service provider? Well, I’m glad you asked.
Going back on my previous blog post, we went over defining who your ‘yes’ client is in order to figure out who you can say ‘no’ to and ultimately providing the most value you can to your customers. Part of understanding this relies on identifying yourself as either a manufacturer or a service provider. The faster you figure out which one you are, the quicker you can start to design your ideal client.
So which one are you? Let’s start by defining what a manufacturer is versus a service provider.
Manufacturers are the traditional printers that possess the equipment and tradesmen to run a print business. When a job comes through the door, it’s accepted, goes through production, the end product comes out and gets delivered to the client. Multiply this process tenfold and you have a print business that is damn good at printing just about everything under the sun for everybody under the sun.
Sounds pretty straightforward, and it is. This is the traditional role of the commercial print industry. Printers manufacture customer requests and ship it with no questions asked. Need a business card? Need a poster? Need a large format banner? Need a coaster? Find a printer and have them manufacture it for you.
Now let’s say you’ve gotten so good at manufacturing that you want to figure out how to improve your business and increase cash flow. You have top notch tradesmen who are running top notch machinery and can do it pretty damn well. What do you do? How do you scale? You’ve established yourself as a reputable printer and clients love coming to you because you can get their jobs done in a quality and timely manner, so why not just fit in more jobs?
The problem with this is that all the other printers are thinking the same exact thing. They, too, are damn good at what they do, so they also figure “why not produce more for less and increase volume?” The result is an all-out competition of who can produce the fastest and your only competitive advantage is your price. But if this is the only way you can stand out against the others, what happens when you can’t go any lower on the prices? You cut and cut and cut, but eventually you’ll end up bleeding out from trying to be lower priced than the others. Doesn’t sound like a solid or fun plan.
The alternative is to find new ways to create value for your client. A service provider steps outside the realm of manufacturing and starts to dig into the problem-solving side of business. Your role evolves into solving other issues your clients have. You’re not just a printer anymore. You’re providing services your clients need beyond printing.
Just how do you transition into this new identity? It’s going to take work and quite a bit of time. There are a lot of variables involved with this transition that you need to understand before you can decide whether or not you should be running this same change with your business.
The first requirement is asking your clients what more you can do for them. Again, this falls in line with defining your ‘yes’ client, which you should get familiar with in my previous post. Find out what other problems they need help solving beyond print manufacturing. Once you have an idea, create a vision around it. How are you going to start providing new services and build your business into something bigger? What problems do you want to start solving for your clients and how do you see this benefiting both you and them in the long run? Define your vision by answering these questions. Keep it simple and make it clear. Don’t over-complicate it or else you’ll get too caught up in details and tactics before you even get started.
Before you start going to town on making changes, make sure that the services you’re getting into actually work. Instead of investing capital in building an internal team to handle a brand new service, don’t be afraid to outsource it. There’s nothing wrong with testing the waters first to see if the service you’re looking to provide has any merit to it. That way if doesn’t work out, you’re minimizing your losses that could have been far worse building your own team and seeing it crash and burn because the need wasn’t really there.
When you’ve worked this out, it’s time to start laying the foundation upon which to grow your new services. Ironically, in order to do that you need to approach it from a top-down perspective. You need to make sure your vision is clearly communicated down the line so that each department understands their roles in making this vision a reality. Start with your leadership team and ensure everyone on it knows their part in it. Make sure sales, marketing, product development, production, finance, and whoever else have a clear cut responsibility in fulfilling these new services. Figure out if you need to make additions to your team, or even if you need to make cuts. Not everyone might feel the same about the new direction you’re going, in which case it’s better to part ways now and save the headaches down the road.
This process will take a while. My team spent the first two years getting this worked out. It’s not just a simple one-and-done meeting. You have to actively adjust as your business transitions into this new role. More importantly, you need to be vulnerable enough to let your team challenge you with their questions. The goal here is to seek alignment and get everybody who is on board on the same page.
As you’re doing this, you will need to put systems in place to handle any breakdowns that will inevitably occur along the way. Your business is undergoing a significant change. It can be very easy to fall back to old habits and get stuck in a rut. The best way to prevent this is a regular evaluation of yourself and each department to make sure everyone remains on the same page. Have processes for dealing with breakdowns so that you can move through them quicker and get back on track. You can find out more about managing breakdowns in my other blog post here. Maintain these systems and you’ll see the results in the growth of your business.
Now you’re a service provider with a competitive edge over other printers because you’ve stepped outside of your comfort zone and embraced the opportunity to solve actual business problems. This does not mean you are no longer in manufacturing–this is still your core business–but you are expanding your business into non-commodity like products and services.
Just don’t lose your identity as you transition into this new realm of opportunity. Don’t brand yourself a “marketing service provider” when that’s not the main focus of your business. When clients come to you seeking marketing services only to find out “we only do so much in terms of marketing,” you will create a negative market force. Confusing a client is a surefire way of killing any opportunity. If you’re going to be a service provider, understand the reality of how much value you actually bring to the table and then adjust your marketing strategies around it. That way you can establish a level of trust with your clients and start to build on your relationships from there.
Let me clear the air here and state that if you’re making a killing remaining a manufacturer, by all means stick with it, but if you’re stuck in the downward spiral of constantly cutting your prices, you need to change your approach. Once you make this decision, you can begin designing your ideal clients. You can find out more about this process in my previous blog here.
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