Now that there are more competitors in the business of producing photographic images, the key strategy for commercial labs continues to be in distinguishing themselves from the rest of the competition. To achieve this, companies must find a niche in what they do better than competitors in the area and provide customers with a full menu of digital services.
"There's been ongoing competition in the digital business for the last 10 to 15 years, " notes Doug Hart, Hart and Associates Management Consultants. "That competition may have been accelerated in recent years but it's always been there, and the good companies are surviving."
As president of the Toronto based market research/consulting firm to the imaging industry, Hart enjoys a broader view than most of the trends shaping prospects for lab owners. In September, the company will embark on an industry-wide customer satisfaction research program. The goal, says Hart, is to establish performance benchmarks for digital labs. Through interviews with present and potential customers in local markets, the project will try to identify the competitive positioning of digital labs and other digital service providers. The data should allow company clients to compare their technical capabilities, marketing and image performance with labs on a national basis.
Since its creation, his company has regularly surveyed labs and their customers to gain the insights, which can assist client companies in developing the strategies to help them grow their business. "The industry got its legs kicked out after 9/11," Hart notes. "Business has come back but it has been slow. Growth today is harder to come by."
For traditional photo labs today, growth is usually driven by success with digital services. With labs now competing with printers, service bureaus, sign shops and reprographic houses for some of the same customers, how labs sell their digital capabilities is just as important as what they can deliver.
"Marketing (of digital services) is the hard part," says Hart. "It takes some innovative thinking. The lab owner needs to stand back and think strategically: 'What things am I already doing well for customers, and what else can I do well?'"
He says rather than try and be all things digital to all people, a thorough self-assessment should help the lab owner identify real opportunities. "Don't try and do all for everyone, you have to provide a service you know you can make money at," he cautions. "You have to be selective about what you do, and do it well."
Ideally, that internal assessment should be followed up with a survey of the marketplace, for insights on how the lab is perceived against competitors."Marketing (of digital services) is the hard part," says Hart. "It takes some innovative thinking. The lab owner needs to stand back and think strategically: 'What things am I already doing well for customers, and what else can I do well?'"
As a professional researcher, Hart believes this is best handled by an outside firm. "We know how to do it, and who is the right person to reach," he explains.
When respondents understand they are speaking with an independent party, they're usually not shy about sharing opinions. "We're more likely to get candid responses than if someone from the lab called themselves," he relates. "People can be quite up front in telling us what they think about a lab, who they use for different services, even the problems they've had with the lab or other suppliers."
Insights gained from the internal and external evaluations can guide the lab in developing an effective strategy for building new business. Its typically a two part process: identifying ways to increase sales to existing business customers; then taking your message to potential customers with an existing need for the same services.
"I always advise clients to focus on new services for existing customers first, because you already have a relationship with them." There's still work involved. " "A lot of homework has to be done before you make the call," says Hart. "You have to look at what you do, what you do well, what the customers needs are and why they should turn to you."
With larger companies, the next challenge may be determining who should get the sales pitch. "You have to take time, account by account, to identify who your salespeople should be talking to," continues Hart. "Sometimes it can be as simple as asking their existing contact 'Who should I call in your office in San Francisco?' and they will make the introduction. With other companies, it may take a lot of digging before you figure out who exactly that person is."
With new customers, or when trying to launch new services, the sales effort needs to be complemented with an aggressive, thorough marketing campaign to make potential customers aware of all your capabilities. Use whatever makes sense, says Hart: direct mail, print, email, work samples, invitations to your facilities so clients get a better understanding of what you can do.