Recently I had the opportunity to speak at the Franchise Services (FSI) yearly convention, and I was asked to provide advice to franchisees about growing the business. What I did was summarize some of the key success factors I’ve observed throughout the years by watching some of our faster growing customers. It’s what I call the 30/40/50 rule—essentially they’re three simple metrics that franchisees can plug into their business scorecards.
At least 30% of the business should be online
The Internet is changing all industries, and printing is no exception. Our bigger and faster customers are all web-to-print service providers. And it’s as simple as this: those companies that did not even exist 7 or 8 years ago, but have built their business model around e-commerce, are now scaling their businesses globally. If you are a print shop, you probably have a web page. But this does not mean you’re doing business online. So if you want to grow, and you’re not playing in the e-commerce realm, this should be a #1 priority in your business plan.
Innovate: Drive at least 40% of your business with new products
The next success factor to grow any business is innovation. One way to measure your company’s innovativeness is to look at how much revenue you’re getting from products that have been on the market for less than two years. My recommendation would be to target at least 40% of your revenue from new products. Why? Because products mature very quickly, become commodities, then prices decrease rapidly. If you don’t renew your portfolio, you are not going to have sustainable growth. Try to develop five or ten new applications every year. And even if only one or two are successful, those will drive your future growth. So this is a good second metric to add to your business score card.
Acquire 50% of new customers every year
This one may be controversial. But if you are in the large-format market, I would strongly suggest to push it hard. Large-format products are often related to one-off events, campaigns, restorations, or presents. So if you want double digit growth, you cannot count on recurring business from existing customers only. But if you try to acquire 50% of new customers every year, the growth is warranted. And finally, try to find customers that help smooth your seasonality, and that have different purchase drivers or behaviors.
The 30/40/50 rule in action
A final word on this rule: as you focus on these three metrics, they reinforce each other. If you go online, you will find new customers. If you get more customers, they will ask you for new products. If you develop new products, you will get into new segments that you can reach online. Bottom line: you enter into a cycle where the three initiatives work together to boost your company’s growth.
I hope you found this post useful. As always, thank you for reading until the end.