Thursday, March 17, 2005

 

Vistaprint, Again: Ignore Them at Your Own Peril

Like the Barrons article I mentioned previously, printers who do not see and learn from what Vistaprint is doing are making a mistake. Not that companies have to be like them, as each company needs to determine what will best serve their target audience, but that Vistaprint is doing things that others failed at (iprint.com, imagex.com in their original incarnations), and that the company is still learning.

Vistaprint's constant testing of concepts is a tradition of direct marketing, even back when it was called direct mail, and fabled copywriter John Caples (1900-1990) wrote the headline "They laughed when I sat down at the piano, but when I started to play..." which sold a home study music course. ( http://www.caples.org/about.html and also http://adage.com/century/people/people021.html and you can see a picture of the original ad at http://historyproject.ucdavis.edu/imageapp.php?Major=AD&Minor=T&SlideNum=32.00)

Vistaprint's market testing is profiled at http://www.marketingsherpa.com/sample.cfm?contentID=2943 Caples was a proponent of testing from early in his career. Testing means that things will go wrong. But unlike many company managements, companies that believe in failure, yes, failure, learn more than others. Vistaprint looks like it's working in that tradition. Samples can be viewed at http://www.marketingsherpa.com/vistaprint/study.html

I was chatting with a fellow baseball aficionado about what a bunch of losers certain pitchers were, Cy Young being the biggest loser in baseball history (315), who also holds the record for most wins (511). Most people forget that Babe Ruth, greatest home run hitter of his era (714), who preferred beer and whiskey and not steroids and would recommend the same today, also held the record for striking out (1,330). Too many executives put their companies on tightropes: where there is no expertimentation, there are no successes, only stagnation. Tom Peters has long been encouraging companies to "fail small." That is, to create situations where new things are tried and then incrementally built upon. A benefit of the Internet is that you can fail quickly and small, and when you have success in an experimental approach, you can implement quickly as well.

Vistaprint is in the news today because it has opened new web sites. No, not new plants, not new sales offices, but new web sites. My, how things have changed. http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20050316005421&newsLang=en

Will Vistaprint succeed in the long run? I don't know. But it's another example of people from outside the printing business who don't know what you're not supposed to do, and then break new ground.

Comments:
Hi Dr Joe, I have been following the VistaPrint story since day 1, and I'm still wondering if this is all a lot of smoke and mirrors. They have been using the catchphrase for volume of " 10,000 order a day received and completed" for a while. Has anyone tried to put pencil and paper together to give a "guesstimate to this dollar volume?? I've seen the press release concerning their acquisition of a new 5 color press, and their opening a second operating plant in Canada, their first being in Europe. I'm coming up short on how they are producing this volume without a huge operation. I know they are utilizing state of the art ordering, and digital downloading, direct to plate or press, etc, etc but shipping 10,000 finished boxes of business cards, letterheads,memo pads, envelopes, or whatever is a major feat that requires a lot more than a press or two- Let's just say a box of business cards is $20.00. Well we're talking $200,000.00 per day, or a million a week!! Want to say their average order is $30? We're talking one and half million a week, or $75 million a year. I'v e been producing these products for 20 years and I don't think these press releases are telling the EXACT story. Remember the Iprint, Liveprint, Collabria, ImageEX Press Releases?? They sounded pretty similar! And they all had impressive industry leaders on their Boards of Directors. I'm interested to hear what others have to say. Time will tell--
 
I have no idea what their financials are like, and I have not looked at their claims of 10,000 orders a day or 4 million customers (1.3% of the U.S. population, but we don't know how much is non-U.S., and we don't know over what period of time those 4 million have been gathered. It claims more than $50 million in revenue http://www.bizjournals.com/boston/stories/2004/11/08/daily24.html which means that if you assume 250 business days, that's 2.5 million orders, for an average order size of $20. If you use 365 days, that's 3.65 million orders, for an order size of $13.70 per order. It's hard to make money on that unless you're on the Internet; they claim to be profitable, and since they're not publicly traded, we don't know for sure or to what extent, nor do we know how much of that is printing. I remember all of the companies you mention, and telling the ones I could that they were overestimating the marketplace and a number of other things they were mistaken about, and sure enough they all came true. Whether or not Vistaprint is a house of cards (no pun intended, but that was kind of funny come to think of it) or a real business will be revealed in time, of course. As far as the 5/C press goes, they're obviously ganging work based on the lead times that they quote, etc. In order to do that effectively, it helps to have a new press with the best makeready characteristics, and whether or not they have CIM implemented I don't know, but I suspect so; you have to be as "people-free" as possible, especially on the order administration and management side. All of these things work better when you have standard sizes and "template-able" products with a huge flow of centralized orders. Being geographically independent, as the Internet allows, is really important to getting all of these factors working in one's favor.
 
Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?

Get legal. Get OpenOffice.org