Is Your Operation Recession Ready? Here Are Nine Approaches That Could Help
By Sander Sondaal, Director Commercial Print Sales, Ricoh Graphic Communications, Ricoh Europe
In my last blog I spoke about how tough an operational environment 2023 was shaping up to be for Print Service Providers (PSPs) globally. I looked at key pain points and highlighted how identifying opportunities could help operations weather the challenging times ahead.
PSPs can also help get their operations recession ready with these following nine approaches:
1 Identify leading indicators, trigger values, and take fast action
It all starts with robust information on how the economy will be affected and moving quickly based on what that information tells us:
- Monitor reliable leading indicators even more closely than usual. What are they? Who will monitor them? Who must evaluate them?
- Set trigger values for each indicator. Hitting the triggers will require action.
- Create an action plan for trigger values. What steps should be taken? What happens now?
But monitoring is not enough. PSPs should determine the trigger values and the actions to be implemented if these values are reached.
2 Market for the times
Client priorities and behaviours will change during recession and as recovery begins. Marketing should address those changes by:
- Reviewing how much is being spent on SEO and SEA (Search Engine Advertising) and the effectiveness of keywords to ensure the best use of marketing expenditure.
- Staying active and creating engaging content applicable to the communications channels that your clients consume that promotes your value – don’t waste money on keywords which burn up your marketing budget.
- Reviewing paid search strategy, placing adverts targeted to the individuals who you know have a need for your services. Profile and place ads based on the needs of your selected clients.
3 Strengthen existing client relationships and build new ones
Market intelligence can be used by PSPs to monitor changing client priorities and behaviours to help maintain existing clients and win new ones. They can profile clients according to their sensitivity to the business cycle: how deeply are they affected by recession? How quickly will they recover? With this information targeted offers can be created to retain clients with the highest risk of leaving and capture clients likely to depart competitors. These tailored offers can expand share of spend from clients who are most likely to stay and those that present a small risk of departure, too.
4 Embrace the data age: It’s all about the data.
By becoming a data driven company PSPs can:
- Create efficient processes to turn data into action and actions back into data. Having an effective CRM is a must these days;
- Reduce risk by developing rigorous decision making processes and fostering evidence-based cultures;
- And treat data as a business asset, recognising its value in identifying how and why client preferences, needs, and behaviours are changing; whether a new production process is meeting expectations; which marketing campaign shows the most promise; and how employees are responding to an HR initiative.
5 Create operational efficiencies/the power of incremental improvement
This is particularly important during a downturn that is likely to feature continuing cost inflation and resistance to price increases. The power of incremental improvement can deliver consistent, company-wide small improvements and create substantial gains over time.
Once a process is chosen, such as production workflow, and everyone is familiar with the process these questions should be answered: is this process still necessary? If it is, how can we make it more efficient by squeezing out superfluous steps and touches? This can be repeated for other processes.
6 Rigorously assess opportunity
Recessions bring the chance to grab market share by adding capabilities, embracing new technologies, etc. The right choices contribute to a sustainable competitive advantage. The wrong choices deplete resources, fragment operations, and undermine core capabilities.
PSPs should evaluate their choices on what best fits their company’s specific resources, capabilities, and circumstances. They should consider questions such as:
- Does this technology/product/service address an essential client need or is it nice but not necessary?
- How big is the opportunity?
- What’s our differentiator?
- Why now?
- How will we measure success?
- What factors – internal and external – are critical to success?
7 Build your employer brand
Quality employees will become available as the recession deepens. PSPs should aim to become more attractive by developing a compelling employer brand built on reputation and differentiation in the talent market. Your best investment is in the next generation who will lead the industry forward – Generation Z for Print. These will then become your brand ambassadors.
8 Stress test your company
Recessions have unpredictable outcomes and PSPs should be prepared for all eventualities including the most painful. Stress tests are important to securing credit during a downturn because banks will be analysing any ability to withstand adverse conditions for every loan application. For each major client, imagine if they reduce spending by 20% or went away. Then estimate the damage that would cause, and create plans to minimise it.
9 Harness Digital Print Enhancement
Digital Print Enhancement – its time has come. Its ability to generate very attractive margins is well documented but, in these challenging economic times, when clients need solutions that are high impact but flexible, Digital Print Enhancement becomes an even more relevant sales and loyalty tool for resourceful printers. Under the EDGE business development consultancy service, Ricoh is running workshops in which we help PSPs understand how the incredible effects that are possible create a wonderful platform for talking about applications rather than price.
To help PSPs review their operations with approaches like the above and to offer practical advice and guidance Ricoh has developed its EDGE business development consultancy service. Discover how it can enable you to implement change and be better prepared for the challenges 2023 looks set to bring.
For further information, please visit www.ricoh-europe.com
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