Trends and Opportunities in Print/Document Fulfillment



Like many industries, the printing and forms industry is undergoing a sea change in the area of print and document fulfillment. Digital printing, Print on Demand (POD), on-line electronic delivery of client communications and Portable Document Formats (PDF), web-based client servers, variable binding, and other technologies have created new opportunities for every one in the supply chain.

This chapter discusses:
• Trends Shaping Print and Document Fulfillment
• Collateral and Product Fulfillment Market
• Product Fulfillment Center Technologies
• Opportunities For Distributors and Printers
• Product Fulfillment Center Technologies
• The Letter Shop/Mail Shop of Tomorrow

Six Trends Shaping Print and Document Fulfillment

Trend #1: Companies Provide Both Electronic and Physical Fulfillment

Technology and the World Wide Web has created an entirely new playing field for meeting client print and document needs. The fully armed competitor of today and in the future will be able to provide both electronic fulfillment and warehousing (physical) fulfillment of document and printed materials.

A large portion of the printed materials distributed by industry, are now provided through electronic fulfillment. Electronic fulfillment has lowered the cost per unit, eliminated printed material obsolescence, created flexibility to tailor materials, improved turn around times, etc.

There is a right place for both electronic materials and fulfillment, and printed materials and physical document fulfillment. Is your company embracing and providing both to your clients?

Trend #2: Web Will Continue Innovation in Information

Here are three more things that the World Wide Web has brought to industry: easy access to information; speed of delivery; the customer is in control. During the 1990s, the dot.coms were going to destroy the printed paper catalog industry. That didn’t happen. Today the average catalog often does 20% of its direct sales over the web and there is great synergy between the electronic “catalog” and the printed. The pure dot.coms have all but gone away. Even Amazon produces catalogs. Some of our business-to-business clients derive more than 50% of sales from the Web. The value of the World Wide Web is in the information it provides worldwide.

The electronic revolution was heralded to bring us into the paperless information age. That hasn’t happened either. We still print off reams and reams of paper, distribute it to our coworkers and clients. The Web has given us on-line World Wide access to information. But we still rely on printed materials sometimes in a different form. The next generation of print fulfillment companies will harness technology even more.

Trend #3: Ability to Handle Product Fulfillment

As part of a total marketing program, large companies have over the years used “product” in their marketing efforts. There are a wide range of ways that companies use product. It may be emblematic product or it may offer a lifestyle product offering exclusive to their brand. Companies that have lead their clients in this transformation have often provided printed materials, collateral, promotional product and fulfillment to serve the total marketing needs. Many companies are moving into product fulfillment as the collateral fulfillment space becomes more competitive.

Trend #4: Value Added Services

Many aspects of service industries have become “commodities” and when that happens price becomes a key factor. It’s no longer enough to provide printed materials. We have to combine it with other marketing services and add value.

Take for example lead generation. You may print and fulfill collateral for your client. But can you add call center services which better qualify the leads? Tie dealers, factories and headquarters together into the lead generation system? Host a web site or integrate the site back into the lead fulfillment system?

On the Internet ( there is an excellent Case Study of one such lead generation system that Maritz Rewards created for Toyota and Lexus marketing campaigns. According to Maritz Rewards’ web site: “The results, Average fulfillment turnaround of 24 hours. Average fulfillment of 1,650 letters per day - 7,000 on peak days. Average of 300 Hot Leads per day and 700 Leads sent to Lead Delivery daily.”

While I’m sure there was a large scale investment to set up the Toyota and Lexus lead management system. Clearly, the marketing challenges cited in the Case Study make it clear that printing and mailing collateral was no longer good enough for the client.

In our experience, when we add marketing value to the client’s work we create longer term, profitable relationships which are much harder for competitors to take away.

The Maritz example also drives home that print and document fulfillment is in a broader sense a piece of the total marketing. Integration of marketing media – it isn’t all print or direct mail. It’s a combination of ways to reach the clients involving Web, print, direct mail, e-mail marketing, in-bound and outbound calls and other media where applicable.

Trend #5: Use of Third Party Fulfillment (3 PF) Gains Acceptance

Outsourcing has become an accepted business model because companies have grown to recognize that fulfillment and logistics is not their core competency. Third party fulfillment (3 PF) often provides a lower cost per order or per piece distributed and faster turn around than what can be achieved internally by companies for which fulfillment is not a core competency. Additionally, the 3 PF client does not have to invest capital in the required technology, facilities and organization. 3 PF also allows clients to expand customer service, accommodate peak periods and call center over flow and gain high capacity.

Trend #6: Benchmarking, Best Practice and Certification

Few print shops bother to benchmark their costs and service levels. An axiom from the field of industrial engineering has it that you cannot improve what you haven’t measured. Best example, is order turnaround. A decade ago, order turn around of up to 10 was acceptable to a collateral client. But today’s systems and processes - as the Maritz Rewards’ Case Study showed - must be geared toward 24-hour order turnaround times.

Another aspect to benchmarking should lead you to understand the cost of all transactions and services. It may lead you to examine whether you getting a fair price for your efforts. Or are you giving away services for free, when you could be charging for them. These free services may include “pay as you go” programs, becoming a “partner” in purchasing incentive products, not charging for account management fees, etc. Your competitor made be charging for these services. Every dollar saved goes right to your bottom line.

There are two general types of benchmarking - internal and external benchmarks. Internal benchmarking creates standards for key metrics and then reports these back to management. The most important benchmarks are those that you report internally and see improvement from season to season and year to year. External benchmarking takes place on a cooperative basis usually within an association, trade group or among similar companies in different parts of the country to protect confidentiality. Benchmarking combined with best practice implementation can increase your service levels, lower your costs, and boost your turnaround times.

Another key element learned from benchmarking is that in many business processes, 50% of cost is direct labor. Benchmarking should help us learn how to manage and control our largest component of cost.

In the last few years, we are seeing companies looking to use various certification programs to both differentiate themselves from the competition and raise their customer service levels. In general to achieve certification, you need to implement internal procedures and processes which raise your company’s performance to a higher standard. In 3PF, we have seen companies such as Moulton Logistics Management, Budco, and CPI Business Groups become ISO certified (International Standards Organization). Or in Call Centers operations COPC certified (Customer Operations Performance standards). Depending on the industry that you serve – such as manufacturing - ISO standardization may be more common place.

Collateral and Product Fulfillment Market

Marketing data about the size of the collateral and product fulfillment is very limited. Third party fulfillment companies (3 PF) are small, a highly fragmented industry and regional in nature. There are literally hundreds to thousands of companies that offer fulfillment of collateral materials and products. This means there’s a tremendous opportunity to grab future market share by 3PF service providers as it is difficult for any one company to dominate the market.

In one private survey that was conducted in 2002 of approximately 600 providers of fulfillment and mailing service companies, 75% of the respondents had client billings of $2 million or less and most are regional companies. Thirty (30) firms had sales between $20 and $50 million and 15 had sales over $50 million. Only 6% of these companies are involved in product fulfillment.

As we look at 3PF of product, we believe company sizes will also hold true – the majority will be companies with sales under $5 million annually.

What this says to us is that 3 PFs providing collateral fulfillment have the ability to compete in this marketplace from a size perspective. Secondly, product fulfillment is clearly where you should also look to the future to round out your clients’ marketing offering.

Opportunities For Distributors and Printers

Your watchword should be carpe diem - “seize the day”. With change of this magnitude, new opportunities always present themselves. The technology and benefits to the customer will not go away. Find the right ways to harness it to provide new services to your clients.

Distributors have long survived because they took a consultative approach to solving client problems. Clients still want to deal with companies and individuals that bring them solutions. These new technologies and electronic fulfillment are ripe with solutions awaiting client problems.

As we discussed in benchmarking, use its principles to fully understand your cost, service levels and processes and how to improve them.

If you’re not in collateral and product fulfillment, spend priority time to explore what it will take for your organization to provide these services to your prospect and client base.

Then, there’s customer service. One advantage to being small is that you can afford to give your clients the feeling that they are the “big fish in the small pond”. While all the technology may sounds impressive, the reality is that many larger fulfillment companies have failed to stay technologically up to date. If you can’t make the total capital investment, bring together alliances of service companies.

Product Fulfillment Center Technologies

There are several technologies which are essential to growth as you transition into product fulfillment.

Direct to Customer Systems

If you are going to provide collateral and product fulfillment, then direct to customer systems will be required to provide call center, marketing, merchandising, inventory forecasting and shipping/manifesting support. These systems are considerable different from information systems employed in print and letter shop operations.

One of the critical differences is that many types of product fulfillment require payment with an order from bank and charge cards and check with order.

Another difference is in the inventory control functions. Because product has a much higher dollar value and is often not a give away, the service provider must now have an accurate inventory management system to the SKU (color-size level). In the printing industry, a quantity tolerance of plus or minus 10% is acceptable. However, the costs are much higher in product fulfillment than paper costs. Customers expect—and contractually get—stated inventory overages and shrinkages that are less than 1%.

In more complex, larger warehouse environments, the inventory systems are integrated with Radio Frequency (RF) for scanning and tracking inventory from receiving, stock putaway, through picking, packing, shipping and manifesting. This dramatically improves the accuracy of client inventory by inventory location. RF scanning systems reduces labor involved in picking, managing inventory, stock cycle counting, shipping/manifesting. In turn, scanning the outbound package as it leaves the warehouse allows the shipping data to be updated back into the customer service system and to create the invoice data from the scanned transaction. This gives you the ability to track the client packages through expedited carrier systems and also to answer questions about when you shipped the order.

Customer Contact or Call Center Operations Technologies

Most collateral fulfillment companies do not offer call center consulting services. Forward thinking companies will jump on this trend because it allows users of collateral to do business with a single entity. Adding technology may cost you in the near term, but you’ll reap the rewards of providing value-added services to your clients.

Inbound call programs
Progressive users of call centers are moving from looking at inbound representatives as order takers to being sales-oriented and making sales. Thanks to effective cross selling and upselling of services the average order increases significantly (typically 2% to 4%) without the corresponding cost increase.

Outbound call programs
While the Federal Trade Commission (FTC) guidelines for this have changed in 2003, companies can still make outbound calls with consumers and businesses that they have a prior relationship with. While this needs to be tastefully, professionally and legally done, this is still a major opportunity for increasing sales and generating leads for which you have an established relationship (lead inquiry or sale).

Servicing the Web customer
A significant portion of Web customers abort the transaction because of confusion about the site or they do not wish to enter a credit card number over the Web. An essential function of the call center is to service this rapidly growing segment of business. Other functions today’s call centers provide are web chat and e-mail inquiry resolution to customer questions.

Interactive Voice Response (IVR) Capability
IVR capability is the cheapest way in terms of cost per transaction to service a customer for a simple transaction such as placing a simple order, inquiring on a back order, etc. There is still reluctance by management to fully utilize technology. But look at the self serve nature of the Web or bank ATMs. Who would have thought 10 years ago that a high percentage of transactions would be of customer self serve in nature.

Automatic Call Distributor (ACD)
Automatic Call Distributors (ACDs) are telephone switches used in call centers to manage call center operations, identify and respond to call volume and fluctuations in your business. Call center staffing software reads information from real-time or batch data will improve coverage and your agent’s productivity. The ability to monitoring calls for quality assurance and have 24/7 capability are essential to your success.

The Letter Shop/Mail Shop of Tomorrow

No one has a crystal ball but here is what we see happening based on current market forces and company strategies. Most lettershops/mail shops compete on a regional basis. As the competition increases and price becomes more of an issue, we see lettershops slowly moving to expand their services. Electronic and physical fulfillment are such offerings.

As the clients needs grow, lettershops will move into product fulfillment of premiums and incentives to round out client marketing requirements.

Additionally, we see industry leaders in product fulfillment performing double duty in the collateral fulfillment. This puts lettershops into competition with thousands of other firms already in fulfillment of promotional products and consumer products offerings.

As the lettershop/mail shop changes its marketing to include fulfillment, the lettershops will compete on a national scale which, in turn, increases the capital requirements needed to build the infrastructure for warehousing, customer contact center, systems and organizational perspectives.

Most lettershops are already involved in the marketing and mailing strategies of its clients. As the requirements change from getting the lead to making the sale, your marketing efforts will segue to highly sophisticated database marketing technologies and customer contact center technologies.