provided by: 
If you think you are losing money in prepress now, just wait until you add VDP and Web-to-print services. Even after all these years, quick printers are still undercharging for prepress and design services. What has become the most pivotal department in the shop's workflow continues to be perceived as a production bottleneck. Printers charge low prices and hope that the prepress staff can produce the work for the quoted price. If the prepress part of the job goes over budget, it is the prepress staff's fault for not working fast enough.
For many shops, the VDP and Web-to-print functions will be relegated to the prepress department. The extra work usually doesn't mean an additional person. The work has to be wedged in among the other prepress functions. The prepress staff is under more stress to produce work, knowing it probably won't be profitable.
Successful printers charge a profitable price for the work they do. Good pricing techniques include having set prices for correctly constructed customer files and penalties for customer files that don't follow industry standards. For design and typesetting work, successful printers use a value price that should provide the department with a profit for most work. It doesn't matter how long it takes to produce a job. The job is priced on its perceived value. The production manager reviews the price of every job before it gets into production to assure that it is profitable or the job doesn't go to production.
Unsuccessful printers still use an imaginary hourly rate system. The rate sounds good, but no one ever uses it. The job is priced based on how long it is in prepress; yet no one measures the time spent on the work. Even minimum prices are set so low that the selling price doesn't cover the time spent entering the order into prepress.
Wake Up Call
If a printer doesn't have realistic pricing set for the typical prepress work, then the new tasks required for VDP and Web-to-print services will also be under priced. Printers "train" their customers to expect low or free prepress charges. Those customers will expect the new services to have little value and low cost.
VDP and Web-to-print services have a high value. Most services are tied to marketing efforts that have a higher perceived value. Printers need to be pricing this work at a higher level rather than trying to commoditize the pricing.
A recent study pointed out that printers who are new to VDP services typically break out prices rather than giving a bundled price. Experts think that printers are afraid that the higher value prices will scare the customers since they are use to paying low prices. Printers who have more experience selling VDP services will usually bundle the price.
Most success stories discussing high profits from VDP jobs don't come from the printing industry. The people who are making the money are in advertising agencies, marketing departments, or are print brokers. Printers are just low cost producers who see their work sold at doubled, tripled, or even higher prices.
Can a printer be profitable in prepress? Are you profitable?
- Honestly review your sales for the prepress department. Is it making money? Is it coving the cost of the prepress staff? Can you afford new equipment and software when necessary? If you aren't making money in the prepress department, raise your prices or close it down. Sometimes it is more profitable to buy prepress from an outside service.
- Raise prices. When was the last time you raised prepress prices? If you really are using an hourly rate to price, when was the last time it was adjusted? If you don't adjust your rates properly, you might be getting a lower price when you improve your productivity with new equipment, software, and employee training.
- Have the production manager review prepress pricing before the job is entered into production. A production manager makes sure all jobs are reviewed to assure they are profitable and can be produced on time. If it is priced incorrectly or can't be produced in the time required, it is sent back to the salesperson.
- Let your prepress department question pricing. The prepress staff know when they are losing money and most of them hate it. Let the prepress staff question prices and help train the rest of the staff to estimate work properly.
- Have standards for how a file is constructed and charge more when a file has to be corrected in prepress. Customers must be educated to the digital standards so additional prices can be justified.
If you aren't making money in prepress now, then adding additional services such as VDP and Web-to-print is only going to put the department deeper in debt. The new technology requires investments in equipment and software. It requires training. The results of using the new technology can be lucrative if the shop owners price the work properly. If they don't, they'll just be digging a deeper "black hole." Get your current prepress department in shape and profitable and then you can afford to test the new VDP and Web-to-print markets.
PURLs Perk Printers
PURLs are one of the hottest technology topics. A PURL is a personal URL that is used by a company to either collect information from customers or push information to them. One definition of a PURL is that it gives a seller the opportunity to continue a dialog with a customer. Basically, a PURL is a tool used to support a direct mail campaign that helps generate and qualify leads.
You probably have received a mailing from a company that asks you to go to a specific website. The website would include the customer's name. A PURL would look like this: www.quickprinting.com/johngiles. When the customer visits the site, he will find information tailored to his needs and interests. Once at the site, the customer may be asked to perform certain functions or review specific Web pages. How the customer interacts with the website helps determine if the customer is a good sales lead. It supplements the direct mail program.
Marketing and advertising companies have been using PURLs for several years. Now printers are attempting to go directly to a customer with the service. Previously, the only thing the printer did was to print and mail the material that got the PURL addresses into the hands of the customer.
Sadly, many printers are not adding PURLs because they add value to the printing sale, but because they think they can cut out the middleman and sell the service cheaper to the end user. What printers are missing is that the marketing and advertising firms were selling more than just PURLs. They were selling a project that included assistance with creating the offer to get the person to go to the PURL, help with the information placed on the PURLs, and measurement systems to show the success of the project. Marketers understand return on investment (ROI) and how PURLs can be part of a strategic marketing plan.
To successfully sell PURLs, printers will have to either become marketing experts or partner with marketing and advertising companies that understand the other functions associated with PURLs. Most printers have the production equipment to produce the printed pieces needed for a PURL project. They just need the marketing know how to make a PURL project successful for the customer.
There are a number of companies focusing on the printing industry that can help you. Even the major Web-to-print companies such as Printable and Pageflex are getting into PURLs. Companies such as Mindfire offer PURLs directly to the printer. A Google search of personal URLs will find a number of PURL specializing companies.
Since most printers can produce the variable data pieces that are to be mailed, smaller printers should start looking for partners to sell the service. Local marketing and advertising agencies are just learning about PURLs. Together a small printing company and a small ad agency could provide sophisticated marketing support for local businesses at a profit margin that would make both partners happy.
You will want to keep an eye on PURL technology. Just don't leave money on the table. PURLs can provide the end user with a high return on investment and make money for everyone.
More Digital News
Free Quark Update
Quark has released QuarkXPress 7.2, which includes improvements in Job Jackets, Flattening, and in XPress' Color Management Module. A 30-day evaluation version is available at www.quark.com.
Mac FlightCheck Updated
Markzware has released FlightCheck v6 for Macintosh that includes QuarkXPress 7 and Adobe InDesign CS3 support. It is now compatible with Native Apple Macintosh Intel machines and allows users to preflight QuarkXPress 7 and Adobe InDesign 5 from a single application. It also adds support for popular third party font management tools. For more information, visit www.markzware.com.
Free Microsoft Publisher 2007 For Printers
Microsoft has notified printers who are members of the Microsoft Publisher Service Provider Program (PSPP) that they can now download a free copy of Publisher 2007. For more information, visit www.microsoft.com/publisher.
Contributing editor John Giles is the owner of The Giles Group, a training and consulting firm specializing in digital file issues. He conducts digital audits for quick printers around the country to assure the companies can accept digital files easily. Giles also conducts training seminars for printing customers on how to prepare files properly for a commercial printer. He is the author of several books and "The DTP Pricelist on Disk." Giles also serves as technology advisor for CPrint. Contact him by voice or fax at 304/552-5363, by e-mail at john@johngiles.com, or visit his website at www.johngiles.com.
author: by John Giles