Value-Added Services: Technology, Philosophy

There is a relationship between value-added services and diversification, but where the latter is a technology-based approach, the former is a more philosophical approach.

TrendWatch defines value-added services as the following: products and services outside a shop's core product area that (a) bring added value to the total customer relationship, and (b) strengthen the revenue stream for both customer and supplier, thereby encouraging repeat sales and driving purchases of additional products and services. Essentially, it's the difference between being equipment- and manufacturing-centric ("If you buy it, they will come and print on it") versus customer-centric ("Get to know your customers and address their specific needs"). The transition from one approach to the other often results in the addition of technology, but it's not the technology itself that makes the difference—it's how that technology is integrated and focused to solve specific customer needs.

This means knowing customers and their needs more intimately than simply taking orders across a desk. It also means investing in integrated workflows that focus not on individual technologies, but how they can be combined to create workflow solutions to solve specific customer needs.

A sense of the attitude toward value-added services can be gleaned by tracking certain sales opportunities for printers. Some, like "broadening prepress services offered," have been declining as a sales opportunity. Others, like "broadening shipping, mailing, and fulfillment

capabilities" have been on the rise. And still others, like "broadening print products offered," have remained steady. Thus there is some sense that printers see advantages in expanding their range of services, but when looking at planned investments, they've pretty much been investing in the same items (PowerMacs, software, servers, finishing equipment, etc.).

In reality, value-added services comprise both philosophy and investment. Just as it's a mistake to buy equipment without a clear sense of how to integrate it into a customer-centric workflow, it's equally foolhardy to have a sense of how to provide new services for clients but not be willing to invest the money to make it happen. It becomes clearer with each new TrendWatch study that those firms that really "get it" when it comes to new technologies are value-added service companies—understanding the true value-added business philosophy enables them to understand how these other technologies are important.