Making a Profit While Differentiating Your Products
The issue of providing value-added services for customers offers a paradox for the printing ink industry. These services, which generally fall under the heading of value-added services, typically include anything from offering systems for vendor managed inventories (VMI) to providing in-plants.
There are countless new opportunities to establish services, ranging from offering environmental and R&D advice and developing color-matching software to showing customers how to cut their costs of production.
There can be no debate that these services offer value to printers. The paradox is that the ink industry has had an unfortunate habit of giving these costly programs away for relatively little return in price.
As competition becomes fiercer, margins are growing tighter, and it is more difficult to write the cost of these services off. The state of the economy appears to have led more ink companies to focus on the need to be paid fairly for their products. In some cases, ink companies are even cutting back their services. This opens the door for other suppliers to attempt to get business by differentiating their services.
In Sean Milmo’s article, “Services Help Ink Companies Make Gains,” beginning on page 21, a number of European ink manufacturers discuss the opportunities they have to differentiate their products by offering specialized services at a price. The belief is that if a customer wants a service enough, they will pay for it. Conversely, if the customer is interested in price alone, that, too, can be provided.
There is plenty of opportunity for companies to make their mark by providing services for their customers. Ink manufacturers create value for their customers, but they need to be rewarded for their efforts. An excellent ink, combined with exceptional services, can make a tremendous difference on press, and will save money for printers in the long run. It is imperative that ink companies get this message across.
The key to all of this is that ink companies have to be disciplined enough to just say no to providing extra services without being compensated for them, and have to realize that it is just not worth losing money on a job. Ultimately, providing these extra services has to make sense financially.