Article

Dodging Darwin

How AlphaGraphics Staved Off Extinction to Thrive in a New Industry

Brad Plothow

August 1, 2012

Just a few years ago, AlphaGraphics was staring down the double barrels of a brutal economy and an industry in flux. The “quick print” industry that AlphaGraphics had dominated for 40 years was fully exposed to the recession’s impact, dropping from a high of 45,000 total small commercial print locations in the market segment to a low of 15,000. It was an adapt-or-die scenario.

“The industry was being commoditized,” says Jeff Spires, vice president of network support at AlphaGraphics. “We needed to change, to evolve, in order to compete.”

In 2010, after years of research and soul-searching, AlphaGraphics unveiled to its roughly 300 franchises a corporate memorandum, titled “Netvision 4,” detailing the company’s vulnerable position and a prescribed solution. The document announced a bold move to diversify beyond small-scale printing and into the broader marketing and communications realm.

AlphaGraphics’ evolution is testament to the company’s resilience and the power of process. The company’s primary constituent, its network of franchises, went all in on the new direction in spite of high stakes and the prospect of a grueling rebranding process. And once existing customers saw AlphaGraphics reinvent its own brand, they were more confident in the firm’s ability to offer them similar help with their marketing and communication needs.

“It was a very therapeutic process,” Spires says.

AlphaGraphics learned a lot about itself and even more about its new industry during its period of accelerated change. It also learned a few lessons that may be useful for other companies coping with the forces of a Darwinian marketplace.

Stay Close to Center
In its introspection and self-analysis, AlphaGraphics realized it needed to avoid reaching too far in its search for change. Printers had historically been key vendors for marketing firms, and AlphaGraphics saw some room for synergy by incorporating the web into its portfolio.

“We wanted to bring technology into our early changes,” Spires says. “Print is a good medium for attracting attention, but it’s limited in how much information you can convey. The web allows for more information but isn’t as good at attracting attention on its own. We wanted to merge these two mediums.”

That approach led to a decision to restructure the company’s resources and personnel around six key marketing services: branding, publications, direct mail, mobile marketing, online marketing and email marketing.

AlphaGraphics’ focus on small businesses allowed it to win converts in a sub-segment typically ignored by larger marketing firms. The company also found success in convincing its loyal print customers to take a chance on a new, broader mix of services. Still, AlphaGraphics felt it was important not to depart too far from its core business, which still accounts for about 90 percent of revenues.

“We can’t ignore what pays the bills, but you also have to invest in where you’re going,” says Art Coley, president of AlphaGraphics.

Do What is Required
When faced with adversity, self-delusion is the path of least resistance. In AlphaGraphics’ case, it would have been much easier to ignore the brutal fact that its industry was probably changing forever. Coley didn’t want anyone to dote on the emperor’s spiffy new clothes with so much at stake.

“We didn’t do what we thought we needed or wanted to do. We did what was required,” Coley says.

Truthfully, the quick-print industry was showing signs of a fundamental shift six or seven years before the Great Recession took hold. Everyone in the industry was talking about it. Problem was, nobody was doing anything, Coley says. He chalks it up to psychological inertia. Change is easy to visualize, but the first steps into the void can be intimidating. Plus, there’s typically an emotional attachment to doing things the same old way.

Moving from printing into marketing promised a series of scary new prospects. The sales process was completely different, for starters. The trust implied between a printer and a client—who’s giving the vendor permission to print sensitive materials in some cases—isn’t there during a marketing consultation. The sales cycle is longer for marketing services, too, and transactions are fewer and much larger compared to print deals.

“It’s almost a whole new business within what we had been used to,” Coley says. “It was hard to break old habits and approach the whole thing as a brand-new business.”

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