Commoditization is defined as the process by which goods that have economic value and are distinguishable in terms of attributes (uniqueness or brand) end up becoming simple commodities in the eyes of the market or consumers.
Over the last 4 years we have had the pleasure of assisting approximately 400 clients with a broad range commercial printing needs. During that time we’ve been involved in countless situations where a customer was looking for nothing more than the lowest bid for their print project. Unfortunately, that is often the reality of commercial printing today.
Understanding that offering only commercial printing left us exposed to this commoditization, we expanded our staff and our offering to include a wide range of marketing services including inbound Marketing, graphic design, social media management, website design, and more. However, when we started in 2009, at the height of the economic downturn, we only offered commercial printing. Since then, a number of long standing commercial printers in Des Moines have closed their doors. Why did this happen and how did Blue Frog not only start a print business in this highly competitive environment in an extremely challenging business climate, but also successfully grow it at a fairly rapid pace?
We have found that providing our customers a high quality product with exceptional customer service as efficiently and cost effectively as possible has been a winning formula.
If you think about it, that is a winning formula for most businesses. The piece that is probably the hardest to attain and thus most often lacking is the “efficiency” part of the equation. Since the economy collapsed businesses of all types across the country have had to do more with less to survive. Bloated, inefficient companies simply cannot make it anymore. Without efficiency, providing “cost effective” solutions means at the very least, sacrificing reasonable margins and at worst, losing money. Over the past 4 years we have emphasized efficiency in everything we do giving us the ability to be price competitive in this market while maintaining profitability.
We have come to realize there are really two different types of commercial printing customers. Customer #1 will almost always seek the lowest price. You still have to make a timely delivery with decent quality, but price will most likely be the determining factor. We certainly understand and appreciate this customers desire to keep costs low, but we also understand this type of customer can be potentially dangerous. You can’t “win at all costs” in this, or any business. Even when cost is the primary determining factor, you must still be able to maintain margins while being price competitive. You may lose a bid here and there, but the vendor that sacrifices reasonable margins is jeopardizing the stability and longevity of their business.
Customer #2 desires more from their vendor. They respect the effort involved in turning jobs in a quick manner or bumping other jobs to make sure theirs get out on time. They want someone who they feel is part of their team, invested in each project as if it were their own. They involve us in the process from planning to delivery and treat us as an extension of their business. Most importantly, because they value the service provided by their vendor, they want them to remain viable. Customer #2 understands constantly squeezing their partners margins is bad for not only the vendor, but for them as well.
We all love working with customer #2. Who doesn’t want to feel valued and appreciated for their efforts? However, the reality is, most customers will fall into the customer #1 category. So, to be successful you have to build a business that can accommodate them. At Blue Frog we’ve been able to do this by keeping our costs down, avoiding debt, and making quality, mutually beneficial vendor partnerships. All of these factors have contributed to our ability to effectively compete for customer #1’s business.
While our operational efficiencies help us keep our costs down, our outstanding staff is what allows us to build and maintain long term relationships. The end product may be looked at as a commodity, but our people are not.
As a group we have made the decision to be exceptional in our careers. We simply don’t hire people who are complacent doing “just enough.” Our employees are empowered to make decisions to get things done for our customers allowing us to be proactive rather than reactive. We treat our customers projects as if they were our own and take pride in what we do. We understand that mistakes destroy our margins and cause delays and work hard to do things right the first time and make timely deliveries of high quality products for our clients.
While we have grown beyond commercial printing, it is still a very big part of what we do. We have accepted the reality of the commoditization of the industry and understand that creating efficiencies allowing us to maintain adequate margins is paramount to our survival as a business. We also understand the importance of having a qualified, exceptional staff to service our customers at a level that exceeds that of our competition. Surviving in a world where commoditization has squeezed margins is difficult, but not impossible. You just have to have the right formula.
The winners in this industry will be the ones who can diversify their offering to create differentiation between themselves and their competition while maintaining a level of competency, thus effectively fighting off total commoditization of their product offering. They will be the companies who can maintain profitability by executing an efficient operational plan to provide cost competitive solutions without sacrificing quality or customer service. This is the plan we have put in place and what we strive to achieve every day.