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Specialty
Graphic Imaging Association
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Executive Summary
January 2010 |
“Providing” for Your Customers
From Print Provider to Service Provider to Solution Provider
“We don’t see ourselves as printers any longer — we’re solution providers.” Sound familiar? I hear this statement throughout the community. But making the move from printer to solution provider is easier said than done.
The adoption of digital imaging technologies has standardized print quality; a high quality image is expected to compete in today’s marketplace. In most sectors, print quality alone won’t win you many jobs. Today, the competition points are found before or after the print. Creative services, project management and fulfillment are examples of services that help SGIA members win competitive bids.
While some in the community see themselves as solution providers, what they are really doing is bundling services and support around their core product, which, in our case, happens to be producing graphics. Bundling services isn’t a bad thing. It can be a profitable strategy. But it’s important to understand the difference between being a service provider (bundling services) and being a solution provider. The leap from service provider to solution provider is a big one.
Service Provider vs. Solution Provider
A solution results in a desired outcome for a customer. A successful solution addresses a customer need effectively and thoroughly. In the eyes of the customer, a solution provider is more like a business partner than a vendor. They share the customer’s risk, they have skin in the game.
Service providers meet part of a customer need and contribute to a solution. The customer still sees service providers as vendors. Service providers usually have a core product (graphics in our case). They add (or bundle) services and support that relate to this core product. Then, they use these added services and support to enhance the salability of their core product.
Customers evaluate service providers by examining what they received for their money. It’s the standard fee-for-service, competitive bid marketplace. The solution provider’s value is determined in a different way. The value of the solution provider is weighed against the total outcome. They become an essential part of the customer’s business model. If the customer’s business is successful, the solution provider shares in that success. This increases the profitability of each product or service provided by the solution provider.
I only know of a few instances in which graphics producers have achieved solution provider status with their customers. Typically, service providers are too close to their core service to make the jump to solution provider.
Maintaining Profitability as a Service Provider
Many in the SGIA community have made the move from print provider to service provider. They have included value-added services to enhance the salability of printed graphics.
However, there’s a catch. In today’s highly competitive marketplace, the challenge is to maintain the profitability of these value-added services. Many feel pressed to “give away” value-added services in order to sell their core product, and in doing so, they’re losing overall profitability. Once established, this trend can be hard to change.
Others in the community are building valuable services and support that not only compliment their core product, but could stand alone as business units. These companies are improving their profitability through diversification and improving their opportunity to make the jump to solution provider status with some of their customers.
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