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Market smarts

March 31, 2011

Paul Strack enjoys change, a characteristic that has helped him successfully lead his family's print business through very competitive times. After five years as a certified public accountant, learning about business through auditing work, he joined his parents' company in 1990 as a print sales and business development manager. “One of the conditions when I came to work for my folks was that I didn't want to do any more accounting,” he jokes. “From an accountant's perspective, I do a monthly financial review.” He keeps an eye on their management information system (MIS) data and conducts ongoing financial planning. Strack's mother, Mary Lee, handles the books while his father, Ira, does some of the estimating and consults with him on the business plan.

“We're always looking ahead, seeing what's out there and keeping up with the trade journals, like AMERICAN PRINTER, to see what's happening in our industry,” says Strack. “One of the reasons our success has continued is that my folks — my father especially — have never turned away from new technology.” A self-described “borderline technology geek,” he took up his parents' philosophy and steered the company toward digital color. He did some research and made recommendations to Ira and Mary Lee, who embraced the concept that to continue to thrive, they needed to advance the company's capabilities. Yet they've been cautious and methodical about purchasing technology, waiting until a product was proven and had a lower price point to avoid taking on a lot of debt. “We didn't just throw everything into it,” Strack explains. “It's been a gradual process.”

That savvy strategy, along with the skill to take on emerging opportunities like web-to-print and variable-data printing, has paid off. CustomXM's tagline is “market smarter,” emphasizing its latest evolution into a full-fledged marketing services provider with Paul at the helm as president.

Learning to fly

The Stracks started the North Little Rock, AR, business in 1966 running small-format offset Multiliths and AB Dicks, adding presses and occupying more of the building as their business grew. When Paul joined the company in 1990, it was strictly an offset shop. Their first digital machine was a low-volume Canon office copier, followed by a Xerox MajestiK and a Xerox DocuColor 12. On the black-and-white side, they ran a Xerox 9900 copier as well as a 5100. Most of the company's work was business-to-business, with a small portion coming from walk-up customers.

In 2000, they installed a Xerox DocuColor 5252. “That was our first big jump into the digital production color world,” says Strack. At that time, most of the company's color work was done on a 2-color, 14 × 20-inch Heidelberg GTO offset press, with long-run color jobs outsourced to a local trade printer.

Strack's early rebranding efforts underscored the company's offset base, with a 1994 logo depicting a press operator and another in 2001 that emphasized “Custom” and included a photo of an ink can. Offset still held sway, with digital print gradually making inroads as run lengths trended downward. By 2005, about 25% of the company's sales volume was digital print, a figure that was growing rapidly.

“In 2005, we added the phrase ‘Dynamic and Digital’ because, at that point, we were seeing the shift to where digital was going and that it was going to catch on,” says Strack. Along the way, they'd invested in web-to-print technology, creating a digital storefront, CustomClick, with PagePath Technologies' MyOrderDesk. “We felt, even when we first got the color digital box, that whatever we could do to make ordering the printed piece more easy and convenient for our clients would benefit us,” he says. For variable-data campaigns, they invested in Objectif Lune's PrintShop Mail. Its low point of entry was a good match with their philosophy to grow into new technology. They bought the limited license and renewed it several times before upgrading to the fully licensed version.

Strack became interested in PURLs and what it meant to have an integrated campaign, tracking response rates and building more value into the printed product. “I knew that it had to be more than just print,” he says. “I wrote a business plan: ‘We want to provide creative, affordable, 1:1 marketing solutions involving a variety of digital media platforms.’”

Just one year after the update to “Custom Printing — Dynamic and Digital,” the company's digital print business was solid enough to stand on its own as “CustomXM Cross-Media Communications — A Division of Custom Printing Company, Inc.”

Collaboration builds momentum

Strack developed a consultative relationship with customers, educating them on his company's digital capabilities as well as new and creative marketing options. “We didn't take the approach, ‘If we build it they will come,’” he says. A few clients already were interested in applications such as variable-data printing. He notes, “That helped fuel the growth and the volume.”

The division experienced so much growth, in fact, that the Stracks decided to fully embrace digital as the future of their business in 2007. The light went on for Strack when a client, the president of a local company, invited him to a meeting where his staff was brainstorming about marketing and how to build customer loyalty.

Strack explains: “He asked, ‘Wouldn't it be great if our clients could give us an order, we could send it to a magic box, and out of this magic box would come customized customer loyalty coupons with their branding and their logo on them?’” The volume opportunity and potential for further development were clear. Strack responded, “I've got that magic box. We can do that. That's called one-to-one marketing with variable-data printing.” The client developed a marketing department, and CustomXM became its fulfillment center for custom, 1:1 print products.

“Once they saw the benefits of relevant personalized marketing, their volumes took off,” Strack says. “It increased our pipeline and our production capabilities, from variable-data printing and 1:1 marketing campaigns to PURLs in the summer of 2007, with the addition of a NexPress.” The firm's modular Kodak NexPress S2500 was soon upgraded to the S3000, and Strack went to work on revamping his business plan once more.

A new era

“We struggled, like everybody struggles, with the transition from being a printing company for 40 years or so to a marketing services provider,” says Strack. “Some of our clients would think, ‘Oh, that's Paul Strack or that's Ira Strack — that's Custom Printing Co.’” He needed to both define the company's new mission more clearly and develop tools to help reinforce the message with customers.

Strack contacted Trekk Cross-Media, an agency he knew from its work with other printers that had begun to offer 1:1 marketing solutions.

“We went through a SWOT [strengths, weaknesses, opportunities and threats] analysis, which gave us a better focus,” he explains. After examining the business, the Stracks formulated their plan for the company's product offerings going forward. They visually mapped out exactly what CustomXM does, and that “message map” now guides everything from sales and customer service dialogue to information on their collateral materials and website.

The company's new vision statement is, “At CustomXM, we help our clients market smarter by creating and delivering personalized messages across print, e-mail, web and interactive media.” The Stracks have broken their products out into four categories: targeted marketing, print on demand, web to print and personalized cross-media. The message map provides talking points on exactly what those four products are, their purpose and the benefits they provide.

The advent of social media also has opened doors. “It's exposed CustomXM to a whole new audience that has never heard of Custom Printing Co.,” he says.

In the Little Rock area, Strack notes that a lot of the Twitter users are tech-savvy people. “They're comprised of professional communicators and ad agencies, for the most part. So I've used Twitter as a resource to help with our branding,” he says.

One of Strack's favorite social media memories is from the spring of 2009. “When I jumped on the Twitter bandwagon and started having some success from going to these networking groups, my staff was giving me a hard time: ‘Oh, what's a tweetup? What's this Twitter?’ you know.” But Ira understood it. “My father knew that it was networking,” he says. “It is a different type of networking than the chamber of commerce or the civic club that he belonged to, but he recognized [the value]. So even though my parents are 78 years old, they're forward thinking, and that has contributed to their success.”

Digital takes over

CustomXM's digital sales volume overtook offset in late 2008 and has continued to grow. The firm's revenue peaked at $2.5 million in 2008. The Stracks added a Xanté Illumina digital press in 2009, which prints short runs of full-color, variable-data envelopes. On the offset side, they run two AB Dick pressses, one Heidelberg QuickMaster and the GTO. While the recession has been challenging, the company has remained profitable, showing a 12% growth rate over the past three years combined.

The 6,000-sph, toner-based Kodak NexPress S3000 prints on coated or uncoated paper, textured stocks, labels, synthetics and transparencies (maximum sheet size: 14 × 20.47 in.). It images at 600 dpi and employs a variety of screening technologies including Kodak Staccato DX. The press also prints two sides at half the rated speed. A fifth imaging unit enables CustomXM to offer dimensional, tactile effects using clear dry ink. “When I give customers the option to add dimensional, they typically do,” says Strack. He recently added the Intelligent Calibration System (ICS) to the press, which helps ensure the uniformity of printed output.

“We're now in the process of integrating [Datatech SmartSoft's] PressWise into our workflow, so we're excited about that, as well,” says Strack. Currently, Strack estimates that 85% or more of the company's work is received electronically, whether via the shop's website or some clients' own Internet-based purchasing systems. Proofing is integrated through My Order Desk, and with the addition of PressWise, Strack will be able to incorporate not only the web-to-print storefront but the company's EFI PrintSmith MIS workflow. “We won't have the dual entry of orders,” he says. “It's all integrated, so we're going to see cost savings immediately from that.”

CustomXM has 12 full-time employees in its 10,000-sq.-ft. facility, including some who have been with the company for many years. “We're lucky in that respect — a lot of talented folks,” says Strack. Since the company has headed in a new direction, he has done a lot of internal training to ensure his staff is up to speed on integrated marketing campaigns. “Because for 40 years, we were a print manufacturer,” he explains. “I guarantee I've got the best staff in the world, but it is a different talent set that embraces it.” He hired a digital production specialist with a college degree in interactive marketing, who runs the NexPress and handles the microsites and database work. “I have outsourced some of our marketing efforts, especially when it comes to assistance on the social media side,” he adds. “I am pretty proficient on Twitter, but although I use Facebook and LinkedIn, I don't have the time to use all of these extensively.”

Clients have asked Strack about social media support from CustomXM, and it's something he is looking into. For now, it still seems best to leave direct social media interaction to his clients' internal staff. “We encourage it, and we give recommendations or share experiences on how we've benefited from using the social media channels,” he says. For clients running integrated campaigns, Strack will urge them to include their Twitter feed in the landing page, or to use their Facebook page.

Targeted marketing ramps up

For a brief period, an outside firm provided personalized URLs (PURLs) for CustomXM's more complex marketing campaigns. As the application succeeded and CustomXM continued to grow, Strack says, “I felt more comfortable and wanted a little bit more control over the end product, so we purchased a MindFire license.” The company now uses MindFire for all of its PURL campaigns. He's added Kodak Darwin for jobs requiring more image personalization than the variable-data jobs they prepare using PrintShop Mail.

“We have a running joke internally: Our answer to every client's question or suggestion can't be PURLs,” says Strack. “That's not the answer to everything.” The company's answer generally is an integrated, multichannel, cross-media campaign, but it might not involve PURLs. “It might not even involve much printing,” he says.

“Now all the rage is QR Codes,” says Strack. “We're tracking those — they're so important.” He partnered with InterlinkONE, which provides the QReate & Track product, and he uses MindFire internally for QR Code applications. “I like the open-source aspect of QR Codes, and we're fortunate in that we have a couple of options, in case a project is better suited to one or the other,” he says. “It's just another tool to make the printed piece a more relevant experience.”

In addition to a burgeoning direct mail business, CustomXM has trademarked a marketing product, “GetNtheGame.com,” which Strack developed for use at sporting events. As people leave the stadium, each is handed a card designed to fit in a shirt pocket. Each card has a unique URL and, in some cases, a unique QR Code the recipient can scan on a mobile phone to get to the website directly. He explains, “The idea is, ‘Give us a little bit of information about yourself, and you'll win a prize.’ The prize might be a coupon or a free hot dog, and there might be a grand prize. What we've found is that if people are given a little bit of incentive, they're more than happy to provide you with some very critical information.” The landing pages collect names and contact information, then ask a short series of questions for the marketing client's database, such as, “Was this your first time to attend a football game?” and “What was your favorite halftime activity?”

“We've also had great success with this in the restaurant industry,” says Strack. In those applications, often the response card's PURL takes the patron to a survey regarding the quality of service. “If it's their first time there, [the restaurant] can follow up immediately with an incentive to come back. And if a person indicates he or she had poor service, what better way to immediately contact them and say, ‘I apologize. Let me make it right.’ So it starts with the printed card, takes it to the digital world via the micro landing sites, and then we capture that information.” Going forward, the hope is that the database will be used for further marketing efforts using CustomXM's print-on-demand and targeted marketing campaign tools.

Onward and upward

“I have a few big accounts that have really embraced the digital world, digital technology and print on demand,” Strack says. “They understand how things change and they use the tools we have.” His smaller clients are taking an interest in integrated campaigns, as well. “With the rebranding over the past few years, we're more in touch with the marketing folks, which is where I want to go,” he says. “It's a slower sales process, but I love the consultative approach we're taking.”

When the recession reduced marketing budgets, Strack used it as an opportunity to engage clients and talk about how his firm's newer capabilities could benefit their business.

Strack explains that when he started selling print, in 1990, the company's products were viewed as a simple business expense. With the integrated marketing tools CustomXM now has in place, he can offer services that actually make money for his clients. “We are a partner, rather than just a print provider,” he says.

CustomXM's digital sales represented 36% of total revenue, last year, with offset at 28% and the remainder consisting of bindery and mailing services. The consulting service Strack provides for clients' marketing campaigns is handled as a line item on the digital side of the business. “Now we are selling things that I don't shrink wrap, put in a van and deliver. So that's part of this transition, figuring out how to bill for it,” he says. “It's a new area. But we are seeing more of these projects where our intellectual service is more involved and earns a higher price than just the printed components. It's not all about print.”

With his successful marketing efforts and added exposure from the Internet and social media, Strack is exploring new opportunities that extend beyond his customer base in central Arkansas.

“Did I see the writing on the wall, of all this going digital? No, but I knew there was a shift taking place,” says Strack. CustomXM has made the transition from a commodity print provider to a consultative client partner. “That's what we do,” he says. “Rather than fulfilling an expense item, we have the tools available to help our clients market smarter.”

Custom's evolution

In the early 1960s, Ira Strack was a full-time print worker with a yen for his own business. His journey began like many U.S. printers of that era, as a part-time, garage-based venture with a small-format offset press. In a few years, he bought more equipment and moved the operation to a North Little Rock, AR, facility. He and his wife, Mary Lee, founded Custom Printing Co. in 1966.

Since then, the company — now CustomXM (XM stands for “cross media”) — has undergone five expansions. Its claims to fame include being the first commercial printer in its area to embrace computer-to-plate technology in the early 1970s, and one of the first in the area to install high-speed copiers. Digital color, web to print and variable data all have contributed to its growth. In 2009, the company won two “Benny” awards as well as an award from its local PIA affiliate, in recognition of its newest custom printing capabilities.

“It has always been one of our firm beliefs to be on the leading edge but not the bleeding edge,” says president Paul Strack, son of the founders. Ira and Mary Lee, both age 78, still are involved in the business. Paul says their foresight laid the foundation for the company's ongoing success. “We live in a customized world,” he says. “Everything we do is customized; specified by our clients.”

The firm has been able to evolve without losing its identity as run lengths have decreased and new applications such as variable-data marketing have become popular. “The newer technology, along with becoming a marketing services provider, has given us a lot of opportunity,” says Strack.

See www.customxm.com.

Sharing the wealth

Paul Strack frequently presents at industry events such as PODi's (www.podi.org) recent AppForum in Las Vegas, quarterly “Lunch ‘n’ Learn” seminars at the local chamber of commerce, and association events. He credits social media with unlocking these opportunities to share his company's story and insight on applications such as QR Codes. Check out his social media activities at: http://blog.customxm.com, www.twitter.com/pstrack, www.twitter.com/customxm and www.facebook.com/CustomXM.

Denise Kapel is managing editor, AMERICAN PRINTER. Contact her at denise.kapel@penton.com.

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