Save 18% on Signs & Wide Format Pricing Study

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The 2018-2019 Signs & Wide Format Pricing Study is one of NPRC’s most popular pricing studies, and you can now save 18% – BUT you must place your order by Friday, Oct. 30, 2020.  Use Coupon NPRCSIGNS18 to save 18%.

This study has already proven to be a real eye-opener for many firms! Read testimonials below.

Visit our bookstore at  https://printingresearch.org/products-page/ to read details about this popular study. Remember too, that 98% of  all orders are processed and mailed same day as received. Covering dozens of products & services – This new, 110+ page study details real-world pricing practices for dozens of the most common products and services in the signs and wide format industry. Click here or the artwork below to view and download two sample pricing pages.

Click below to view
Table of contents 

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OWNERS PRAISE NEW SIGN
PRICING STUDY PUBLISHED BY NPRC

“After reviewing the latest Sign & Wide Format study I realized I’d been leaving money ‘sitting on the table’ on some products. Literally within minutes of receiving the study, I was able to confidently revise a quote for a customer, knowing the price would still be fair yet competitive. The resulting revenue increase nearly covered the cost of the study—and that’s just one project! Thank you for all of your hard work.”

James Jepsen, General Manager
Local Copies Etc. Santa Maria CA


“The work that John and his team do is so great for our industry and I would hope more companies invest the time in taking part in the survey every year. We all rise up together and this work is a great step for all of us! Our company is only 4 years old so this information is invaluable.”

Zeno Signs & Chesterton Printing Co.
Chesterton, IN


“Hi John. Got the study, printed it, and now using it. Every time we get a survey from you we spend a good deal of time reviewing our pricing. I know we should do this more often but your surveys are the ‘kick in the butt’ that we need to make sure we are getting the best return on our work. I have been doing these surveys for more than 20 years. While I own other businesses, there is nothing in those industries to compare with the surveys you produce. Thanks.”

Jon Robson
Auburn Document Centre, Auburn, NY

This information-packed study offers average and median pricing for dozens of products and services offered in the sign industry, including the following:

  • Laminating Services
  • Substrate Pricing Retail and Discounted)
  • 3′ x 6′ and 4′ x 8′ Banners
  • Vertical Banners & Stands
  • Feather Flags
  • 4MM Coroplast Yard Signs (1-S & 2-S)
  • ACM Panel Pricing (18″ x 24″ and 24′ x 36′)
  • Magnetic Signs
  • Decals – square and contour cut
  • Vehicle Decals
  • Flat Surface Vehicle Wraps
  • Window Perfs
  • Basic Pricing Charges for Vinyl Signs

The study is available in both PDF and Hard-Copy formats.

 

826

Download FREE Digital Pricing Pages & Save 18%

Act now and save 18% on popular 2019-2020 Digital Pricing Study. This study covers pricing for dozens of the most popular digital products and services provided in our industry. Use Coupon: NPRCDIGITAL18. This special offer expires Oct. 30, 2020.

As an example, you’ll find useful pricing info for 4 x 9 rack cards, #10 and 9×12″ Envelopes, 4/4 flyers, catalog sheets, rack cards and postcards just to name a few. Most prices includes cutting and trim charges, but assumes artwork is provided by customer.

Click here to view the Table of Contents. Visit the Bookstore for more info about this study. Reg. Retail Price  (PDF) is $225. With coupon pay on $184.50

 

You can download two sample pricing pages from this popular study by clicking here.

 

742

The Battle to Recover Sales & Profits

Published Oct. 15, 2020

Printers Continue to Face Covid-19 Challenges
As They Battle to Recover Sales & Profits
By John C. Stewart, Executive Director, NPRC

It’s been seven months since Covid-19 first began impacting our industry (as well as the entire U.S. economy) and NPRC has been surveying fellow printers ever since. Some businesses have closed their doors in the past few months, while others struggle to recover lost sales.

All in all, it has clearly been a rough seven months for the printing industry and our latest survey data indicates that while there may be light at the end of the tunnel the tunnel itself extends well into 2021 and possibly into 2022.

We launched our 4th Covid-19 survey on Oct. 6, 2020 and we implemented a strict Deadline of October 12th to allow us time to analyze and report our findings back to survey participants in a timely fashion. If you would like to view July 20-21st Covid-19 Report click here, or copy and paste the following: https://printingresearch.org/resilient-industry-despite-major-sales-declines/

We received 136 responses in our shortened survey time-frame. Below is a very brief profile of the firms that participated:

 

 

Average Median
2020 Projected Sales $1,290,601 $696,500
2020 Projected SPE    $134,149  $114,943
Staffing Jan. 1, 2020       9.27     5.0
Staffing Proj’d Jan 1, 2021       8.11     5.0

 

So Where Do We Stand?  As you can see from the following (Chart #1), the industry indeed suffered a dramatic decline in quarterly sales of almost 30% between the 1st and 2nd Quarters. And while the data shows signs of a modest recover since the end of the 2nd quarter, the recovery has been far from a “full recovery,” with projected 4th quarter average sales still down almost 15%!

Although we often rely on averages as opposed to medians, it is notable that the projected drop in median sales for the 4th quarter 2020 is down 29% – clearly an indication that the road to recovery for our industry is surely a long one.

#2 Employee Staffing Report – In order to help us with various SPE calculations, we asked survey participants to tell us how many total employees (excluding all working owners & partners) were employed at the beginning of each quarter in 2020, as well as what they projected for the 1st quarter in 2021. We used this data to calculate our SPEs for those respective periods.

Chart #3 below illustrates the results of our calculations for the various periods specified. Average reported SPE dropped almost 20% between the 1st quarter and year-end projections. The median decline was almost identical at 18%.

#3 Deployment of work force? We asked employers to tell us the current status of their workforce – who was working at their main plant versus who was still working at home. According to our data, approximately 92% of employees are now back at work, with the remaining 8% still working at home.

#4 Employee Staffing – Today vs. March 1, 2020 – Survey participants reported that their overall average staffing, as compared to March 1, 2020 was down -13.4%. The median decline was down -10%. It is clear from our data that employers, have not reacted as quickly to modifying their staffing as they have to declines in sales. The failure to react to same has resulted in lower SPEs than would otherwise be expected.

Questions #5 – #8 – June/July Sales 2020 vs. 2019 – We queried survey participants to compare their monthly sales for the months of June, July, August and September against their corresponding periods in 2019.

Not a single participating firm indicated they had increased their sales during the respective months. As you can see from the graph below, average and median sales declines of 20-25% were quite common among our survey participants.

Survey Questions #9 – #11 (2020 vs. 2019 Comparative Sales) asked participants to examine various sales periods and indicate how much their sales had increased/decreased for the respective reporting periods. Suffice it to say that while a handful of firms did report sales increases in the 2-6% range, most firms indicated significant declines in sales as indicated below.

Questions #12 – #14 – Covid-19 and Its Impact on Specific Sales – These questions addressed the impact that Covid-19 has had on three categories of sales during the past seven months (March – Sept 2020).

Based upon our data, it appears that digital and offset printing sales have both been heavily impacted by the Corona virus, with digital printing possibly being hit slightly more. Brokered printing has been slightly less impacted but declines of -18% are not easily dismissed.

Note that the questions covered cumulative declines over a 7-month period of time. Just as the sales declines have occurred over an extended period of time, so too will be any recovery. There is no reason or logic that we can see that would suggest that sales of digital, offset and even brokered sales will rebound anytime soon.

“There is no reason or logic that we can
see that would suggest that sales of digital,
offset and even brokered sales will
rebound anytime soon.”

We suspect, although we have no hard evidence to support this statement, that our industry may indeed have to wait until the 3rd or 4th quarter of 2021, if not beyond that time, before we begin to see even a hint that the economy returning to the pre-Covid economy that existed in January or February 2020.

15 – Sales of Covid-19 Related Sales – Some firms indicated early on that they were turning to selling and/or promoting various Covid-19 products (gloves, masks, sanitizers, dispensers, and signs) as a way to possibly make up for sales lost to Covid-19. We asked participants to estimate the volume of sales generated over the preceding 7-months.

As you can see from the graph below, approximately 28% of our respondents indicated they had sold between $5,000 and $25,000 Covid products. An additional 12% of respondents reported sales of $25,000 or greater.

At the other end of the spectrum, approximately 50% of all survey participants indicated they had sold less than $2,500 during that 7-month period.

#16 – Cash Reserves as of Oct. 2020? We asked participants to tell us the status of their current cash reserves. We specified that taking into account steps and expenditures they had taken through Sept. 2020, we asked them to tell us how many additional weeks or months they felt they could operate under the current Covid-19 economy.

The graph below presents a far more positive picture than previous graphs we have posted due to the fact that weaker firms have already dropped by the wayside. As a general observation, firms that continue to operate today, even at a reduced capacity and at lower sales levels, are by their very nature healthier companies.

At least 73% of our participating firms indicate they are well-positioned for 2021 and whatever transpires in regard to the continuing challenges of Covid-19.

#17 – Overall Confidence Level – Question #17 of our survey asked participants to tell us that in light of everything that has transpired during the previous 7 months, how would they rate their confidence that their business will be somewhat “back to normal or better” by July 2021.

The scale we used ranged as follows: -100 (very doubtful) to 0 in the center (chances are 50/50), to +100 (extremely confident).

The collective answer? The average score was 7.2, or just slightly above the “chances are 50-50” that things will be back to normal. The median score was 0. Certainly not optimistic, but most likely as realistic considering what the industry has already gone through in the past seven months.

#18 – Prospects for the Future – We gave participants six choices to describe the impact that Covid-19 has had on their business during the March-September 2020 time frame. Below are their answers:

#19 – Efforts to Recapture Customers – We asked owners to tell us what methods they were implementing and/or employing to recapture the attention of their existing customers as well as to attract new ones. Multiple answers were allowed. We suspect that had this question been asked pre-Covid-19, the percentage of owners indicating they were using “direct mail” would have been significantly lower.

#20 – Vendor/Supplier Costs – Participants were asked to tell us by what percent, if any, had their vendor/supplier costs increased or decreased. Owners told us that they had experienced a modest average increase in pricing of 3.9%, and a median price increase of 1.0%.

#21 – Impact on Selling Prices – The vast majority (98%) of owners indicated that neither increased or decreased their selling prices during this 7-month timeframe.

#22 – Support for the President – We posed the question: “Considering everything that has transpired since Jan. 1, 2020 in regards to the Covid-19 Pandemic, how would you rate your support of President Donald J. Trump and his administration?”

The scale we used ranged from “Totally Opposed” (0) to “Fully Support” (100). The results? The average score was 55.7. The median score was 75. The distribution of answers from 0 to 100 was startling in their extremes, with 23% of owners grading the President with a “0” and 33.7% awarding the President a “100.”

It was clear from our data that our survey revealed a case of extremes. Participants either “loved the President” or they “hate” him.

 

Please note that this report is Copyrighted and initial distribution has been limited to those firms who participated in any one or all of the three Covid-19 Surveys conducted by NPRC. This limited distribution is being done in recognition of and out of respect for the firms who took the time and effort to complete one or more of our surveys. However, in recognition that we serve the entire industry as well, we will publicly distribute this report within the next 15 days. For right now, however, we ask that you refrain from forwarding this report on to others. Thank you for your support. Send comments or questions to membership@printingresearch.org, 2110 Dairy Road, #102, Melbourne, FL 32904

 

1333

NPRC Shares July-Sept. Covid-19 Findings

Although the primary purpose of our recent “Survey of Surveys” was to determine where to concentrate our efforts in the next six months, we couldn’t help but ask a few questions regarding Covid-19 and its impact on the printing industry.

Based upon survey data we have gathered since early March 2020, it is clear that Covid-19 has had a major impact quarterly and annual sales for 2020 and into 2021. In contrast with what President Trump often says, the effects and impact of Covid-19 on the printing industry are not going to suddenly disappear.

“In contrast with what President Trump often says, the effects and impact of Covid-19 on the printing industry are not going to suddenly disappear.”

In fact, the data NPRC has collected so far strongly suggests many printers are forecasting significant declines in sales through 2021.

Projected sales for 2020 and 2021

Whether we are looking at raw $$$ or percentages, our survey participants, whether we are talking “averages” or “medians,” are forecasting troubled times at least for the next 18-24 months.

Significant Declines in Annual Sales

Relying upon financial data we have collected for more than 38 years, 2020 and possibly 2021 will be the first two years on record where sales (at least forecast sales) will actually be lower than the preceding year. Based upon our most recent data, printers are predicting their 2020 sales will be down -14.5% (Average) compared to 2019. Note the median data is only slightly better, reporting sales for year-end 2020 will be down -11.5%.

Significant declines in sales forecast for 2021

When it comes to key ratios in our industry, we will be the first to admit we have rarely if ever had to prepare and present charts and graphs dealing with “negative” numbers. Nonetheless, it is what is, with significant declines in sales projected through year-end 2021.

What about 2021 Sales? As you can see from the chart above, printers who responded to our most recent survey are predicting that year-end sales for 2021 will still be -6.4% below 2019 sales.

Typically we always calculate “averages” because we need that number to calculate “margin of error.” However, in many cases, this one being one of them, we feel the “median” is probably more reflective of what is happening in the industry. The median, unlike averages, is not distorted by large outliers. And while the latter are often valid, they can easily distort an otherwise realistic “average.”

As you can see from the chart above, many printers are predicting an even greater decline in annual sales for 2021 than they are forecasting for 2020. Part of the reason for this is that sales for January, February, and a portion of March 2020 were generally healthy and unaffected by Convid-19. Thus, it is not surprising to see that the negative median sales projection for 2021 is greater than the median for 2020, since the latter included 2.5 months (Jan-March) of relatively healthy sales.

Covid-19’s Impact on SPE

We continue to rely upon “Sales Per Employee” (SPE) calculations as a reliable method for tracking productivity in the industry. The data we’ve collected since early spring is extremely encouraging. It appears that printers, mailers and sign company owners are clearly reacting to the impact that Covid-19 has had by making significant adjustments in staffing.

Following what turned out to be major reductions in staffing earlier in the year, many employers appear more than willing to make some of those preliminary adjustments in staffing permanent. Employers appear willing to make “permanent” furloughed decisions made earlier in the year, even at the risk of losing some long-term employees. Many owners have reluctantly made significant adjustments in staffing and payroll, believing that is what it is going to take to survive the financial challenges brought about by the current pandemic.

Despite forecast for many problems ahead, sales per employee appears to be holding its own.

We are pleased to note that printers appear to have reacted quickly to Covid-19 and have made significant adjustments in staffing to maintain healthy SPE ratios.

Popularity of NPRC Surveys

Popularity of NPRC Studies

NPRC typically publishes 2-3 industry surveys a year. Companies that participate and complete a survey are automatically entitled to a FREE PDF of the final report. The graph below illustrates the relative participation levels in various surveys based upon our “Survey of Surveys.”

Participation levels in various surveys

This graph illustrates the relative degree of participation in various NPRC surveys.

Perceived Value of Studies – For planning purposes, we asked survey participants (125) to score a list of seven studies we have published in the past five years and rate the studies on a scale of 0-100 in terms of “Perceived Value.” The chart below illustrates the results.

Perceived value of various NPRC research studies.

We asked survey participants to rate or grade the overall perceived value of eight different studies we’ve published in the past five years.

Our Next Study – Based in large part on the feedback we received, NPRC has decided to launch a new industry 2020-21 Wage & Benefits Survey within the next two weeks. Not only does this study typically attract a healthy level of participation, it presents data that is critically important, especially in a time when employers are cutting costs, but also carefully monitoring labor costs.

“…end up receiving a “two week” notice from a long-term employee who you possibly failed to acknowledge or reward in a timely or adequate manner.”

It is one thing to discover that you might be paying an above average wage to a key yet “average” employee, but it is another thing entirely to end up receiving a “two week” notice from a long-term employee who you possibly failed to acknowledge or reward in a timely or adequate manner.

For additional information about NPRC and its various services and products, we invite you to visit our website at: www.printingresearch.org.

 

 

 

 

 

 

 

 

1854

Save 18% on Popular NPRC Mailing Study

Use Coupon to Save 18%
On Association’s Newest Study
One of NPRC’s most popular pricing studies!

Now, for the first time, you can save 16% on NPRC’s recently released pricing study – The 2020-2021 Mailing Services Pricing Study. First published in February 2020 and offered at a retail price of $175 (PDF Only), you can now purchase this study for only $147, but you must act quickly since this limited-time offer expires Oct. 30, 2020. Use the following coupon code to save 18%: NPRCMAILING18

NPRC’s newest study has been praised by printers from across the country. The 2020-2021 Mailing Services Pricing Study is 110+ pages in length, and covers dozens of mailing services and products, including average and median pricing for products and services such as:

  • Full-Service IMb Charges
  • De-duping Fees
  • NCOA Processing
  • Markup Rates for Brokered Lists
  • Laser letter Merging Fees
  • Inkjet Addressing Fees
  • Insertion Charges #10, 6×9″ & 9×12″
  • Metering Charges
  • Hand & Machine Application of stamps
  • Self-Mailer Processing Fees
    Plus many, many other services & products

To order your copy or to read more about this study, visit the NPRC Bookstore.

“As always, NPRC has produced a top-notch publication. “Going rates” for mailing services are hard to track from company to company and town to town, so it’s very helpful to have a baseline to compare with. While the numbers alone are worth the cost of the book, the commentary and analyses that come along with these studies are a huge bonus, especially true because they are unbiased and accurate.”

James Jepsen, Gen. Manager
Local Copies Etc.
Santa Maria, CA

 

“I have been in the printing business almost 30 years. A big part of my success is because of John Stewart’s industry studies. The latest study, the 2020-21 Mailing Services Pricing Study has helped me determine that I was undercharging on some of my mailing services. We all are busy running our companies and often times simply forget how long it’s been since we last raised our prices to reflect the increased costs of operation. This study is the perfect tool to remind you to analyze your prices to ensure you stay profitable.”

Armand Girard
Curry Printing & Marketing
Auburn, ME

 

“NPRC has hit the mark again! We are very appreciative of the association’s tireless efforts to get these studies right and on time. We’ve been in the print and mail business for 15 years and have always relied on client feedback and market knowledge to help us set prices. It’s nice to see these corroborated by other businesses similar to ours on a regional and even national basis. Thanks again NPRC.”

Bob Heid
We Are Kymera
Orlando, FL

 

“The mailing survey is one of the best surveys to come out from NPRC in a long time. All of the association’s surveys are of immense help. This one hit a sweet spot for our company. It validated our pricing positions and gave us some items to add, services we should be breaking up into different price categories and not be “all-inclusive in pricing”. We have grown our commercial printing firm to be in the top ten in the San Francisco north bay. Surveys like the Mailing Services Pricing Study keep us growing.”

David Adams
QPS Printing
Petaluma, CA 94952

To order your copy or to read more about this study, visit the NPRC Bookstore.

2609

Calculating Break-even Sales in the Covid Era

Update & revised with corrections as of 8-28-2020 11:00 AM

The good news is that calculating break-even sales for a company is actually quite simple. The bad news is that many companies in our industry are having a difficult time meeting that break-even figure, thanks in large part to Covid-19 and the devastating impact it has had on the printing industry.

Basically, “break-even” sales is the dollar amount of sales that must be achieved that will cover all of the fixed and variable expenses of the business, and produce a profit of zero. While we would all love to produce a profit of $XXX dollars or a percent of 23% or more, the break-even calculation tells you the very minimum of sales you must achieve each month in order to survive, pay all your bills (including your own salary) and not report a loss!

So Exactly What Do You Need

Exactly what do you need to calculate break-even? First, you will need a current profit & loss statement, preferably at least a 6-month statement.

Second, you will need to separate and total all your fixed expenses from your most current statement. Fixed expenses are typically, but not always, those expenses listed under general overhead expenses. Generally speaking, fixed expenses like rent, utilities, insurance and leases are those expenses that remain pretty much the same each month regardless of sales.

Real fixed expenses are those that cannot simply be reduced or eliminated just because your sales are down! They are, as the term implies, FIXED! What about depreciation? Depreciation is generally considered a fixed expense as well, but for the purposes of calculating a “real world” break-even we will not include this figure in our calculation.

What about payroll? Payroll tends to be far more of a fixed expense than a variable! You will need to total $$$ figure required to cover your total payroll expenses, both direct and indirect. That figure would include FICA expenses, workman’s comp, health insurance, payroll processing costs and all other benefits paid on behalf of all employees.

Do You Include Owner’s Salary?

What about a salary or wage for the owner or spouse? Yes, you would include that figure as well. The same would be true for an owner. Include his or her salary and benefits as well. To exclude this figure, would be to assume that the owner, in terms of calculating his or her break-even sales, is willing to forego his or her salary in order to arrive at the lowest calculated amount of sales that must be achieved in order to pay all expenses of the business, both fixed and variable.

The above scenario, speculates that the owner is saying to himself (herself), “I need to calculate the bare bones break-even for my company, and I am willing to forego my salary for a couple of months in order to calculate exactly the minimum sales I need to achieve in order to pay all my bills as well as cover my current payroll. What do those sales need to be?”

Checking out Variable Expenses

Variable Expenses are next! While the fixed expense calculations noted above are looking for dollar ($$$) totals, for variable expenses we are looking at ratios or percentages in terms of sales. Most variable expenses are expressed as a percent of sales. Most of those variable expenses appear on your profit & loss statements under “cost of goods.” These are expenses that generally vary directly with sales. In theory, if you have $0 sales you have 0% of cost of goods. Sometimes, however, variable expenses appear elsewhere on your profit and loss statements so you will need to check carefully.

Examples of variable expenses on a typical P&L would be paper costs, digital copier clicks, outside services, outside purchases, repairs & maintenance, shipping costs and other materials. If you have minimum service costs that are paid in addition to meter clicks, these costs would be included under fixed expenses, not variable. Once again, we are looking for a ratio or percent representing the total percent of all variable expenses required to operate the business.

Some Real World Calculations

After gathering the above, we should end up with two entries:

• Total Fixed Expenses in dollars ($$$)
• Total Variable Expenses expressed as a percent (%) of sales

Break-even Formula – The formula used to calculate break-even is as follows:

Break-even sales = Fixed Expenses in $$/inverse of variable expenses*
*(If total variable expenses is 45%, the inverse would be 55%)

Using actual sales and ratios from two sample breakout from the NPRC 2019-2020 Financial Benchmarking Study, and the formula noted above, we will calculate the break-even sales (annual) for two different firms, one a low profit firm and the other being a high profit firm.

Low Profit Firm: Reported sales $1,448,004 and Owner’s Comp of 5.4%
Fixed expenses: $927,557 (64% of sales)
Variable expenses: 30.6%
BE Sales formula = $927,557/.694
BE = $1,336,537

High Profit Firm: Reported sales $1,037,417 and Owner’s Comp of 19.4%
Fixed expenses $469,525 (45.2% of sales)
Variable expenses: 29.0%
BE Sales formula = $469,525/.71
BE = $661,302
(Note that in both examples cited above, payroll expenses were treated as fixed expenses. You can re-calculate by treating payroll costs as variable expense instead and your BE figure will be different. However, as noted previously, payroll tends to be far more of a fixed expense than a variable expense.)

General Conclusions & Comments

General observations – Note that the above are actual quartile ratios and expenses from our Benchmarking Study. Note that the low profit firms don’t have a lot of wiggle room when it comes to reaching a break-even in sales. If they lose approximately $111,000 in sales they will already be at break-even, meaning 0% profit.

On the other hand, the high profit firms, because their fixed expenses in terms of raw dollars as well as a percent of sales are so much lower, their break-even is much, much lower. With their current fixed and variable expenses as stated, they could weather an economic crisis such as Covid-19 so much better. They could lose approximately $376,000 in sales before dropping below 0% in terms of profits or break-even.

Remember when making calculations to account for the period you are using. If you are using quarterly figures, then your formula would reveal the break-even for that quarter, not a month. You can and should calculate break-even sales and convert to a monthly sales figure. It is also worth noting that your financial statements ought to conform or follow what is suggested per NPRC’s suggested chart of accounts, thus making it easy to extract fixed and variable expenses.

One last comment – If your financial statements do not automatically include ratios (expense as a percent of sales) for each entry on your P&Ls then you ought to fire the bookkeeper or accountant who is preparing them. This not a topic of debate but rather a statement of fact. If you’re not being provided with the proper information, find someone who can.

495

Firms Report Healthy Ratios Despite Covid-19!

Despite the fact that our recent “Survey of Surveys” was geared toward determining future industry surveys, we were able to gleam some “up-to-the-minute” data on industry sales and the impact of Covid-19.

We asked participants a variety of questions regarding not only year-end sales for 2019 but projected year-end sales for 2020 as well as 2021. We also explored interim sales for 2020 as well as questions related to number of employees employed at different periods in 2020.

Below is some of the preliminary data we received. The data below is based upon approximately the first 50 responses. Our experience, however, is that the average and medians reported below are unlikely to change, even as we surpass 100 or more response.

Note that we excluded data for firms reporting 2019 sales of less than $300,000 or greater than $5,000,000. Despite these exclusions, the data pertaining percentage increases in sales and current or projected Sales Per Employee (SPE) would have changed very little.                                                                

Key Ratios Average Median
Annual Sales 2019 $1,877,087 $1,117,989
Projected Sales 2020 $1,625,506 $877,500
Projected Sales 2021 $1,814,238 $756,942
% +/- Sales 2020 vs. 2019 -13.4% -21.5%
Projected SPE 2020 $142,576 $121,071
% +/- in SPE 2019 vs. 2020 -3.1%  -12.6%

The data above is similar, but not the same as we have reported in recent Covid-19 Survey Reports. Each of our surveys tend to attract similarly active, somewhat larger and involved industry members, but not all participate to the same degree as others.

Nonetheless, our recent industry surveys have tended to attract not only larger firms, but what appears to be healthy firms as well, based upon their reported healthy SPEs. These firms appear to be surviving quite well, considering Covid-19 and the challenges it has wrought.

239

Marketing’s Famous “Rule of 27”

RULE OF 27 – Why So Many Direct Mail & Email Campaigns Fail!

By John C. Stewart, Executive Director, NPRC

I first heard of this rule many, many years ago, and I have tried my very best to use it to help me promote various products and services I sell. It is a fairly straight rule to explain, but a huge challenge to implement with any consistency.

The Rule of 27 actually consists of two parts or theorems. In simplest of terms, Part #1 says that it takes a lot individual mailing pieces sent to a specific prospect to bring them around from having no knowledge or interest in your product or services to possibly, after many attempts, convincing them to possibly give you a try. Part #2 suggests that the odds are only one in three that a specific mailing piece will ever make it to the recipient’s desk and actually be seen.

RULE #1 – It take approximately 9 mailers or mailing pieces to bring about a change in the recipient… There are very similar rules or anecdotes as it relates to outside sales calls. Many readers have probably heard the stories that studies have shown it takes XX sales calls either by phone or in person before a prospect will even entertain a quote from you. These same studies often note that the typical outside sales rep typically gives up calling on the prospect at 2-3 calls less than is represented by XX.

Below is a sample progression of what typically transpires as one mailing piece after another is sent to a prospect.

Progression of Acceptance
1. He/she has little or no recognition of your business… considers you probably a flash in the pan.
2. Prospect considers you nothing more than just another start-up trying to make inroads.
3. After receiving 3 or more mailers, the prospect at least acknowledges that you don’t give up easy; nonetheless, he/she has no interest or need for your services.
4. By the 4th or 5th email (or call) you’ve possibly established some credibility and name recognition as a possible supplier
5. By the 5th email or call it appears you have established yourself as an established supplier, but nonetheless there is still no need for your service.
6. By this time, you have possibly started to pique their interest in your business or services, and they may begin to pay a bit more attention.
7. Chances are good that the recipient’s mindset has changed a bit, and is far more open-minded to your offers as well as accepting calls or inquiries from you.
8. Given the right circumstances, the recipient will now actively consider you as potential supplier, especially if during the interim he has had some questionable experiences with his/her current vendors.
9. By now, assuming the stars are properly aligned, the recipient’s willingness to try someone new as the result of possibly one or more bad experiences has become a reality.
If you’re looking for a quick fix, something that can bring about positive responses with little effort on your part then you need to try something else. The above progression and steps required to convert a prospect into a possible customer is often long and grueling.

NOW ON TO PART #2 OF THE “RULE OF 27″…

Getting recipients to even open, let alone read a well-designed marketing piece is a constant challenge. Open rates of 18% or more are quite rare.

RULE #2 – Recalling only one out of three mailers… A corollary to rule #1 is that the average or typical direct mail recipient, when put to a recall test, can often only recall having received and/or opened one out of three mailers sent to him by a specific vendor.

The reasons recipients fail to recall ever seeing your mailing pieces are multiple and varied, but here are a few reasons given…

  • Recipient was in the office that day but was tied up in meetings and never seriously perused his mail.
  • Absent from the business the day it arrived… Owner is out of office on business or for pleasure on the day the mailing piece arrives, and general office practices are to either read or discard 3rd/bulk rate mail daily.
  • Recipient’s business day turns out to be overly chaotic with one crisis or another and he/she never gets an opportunity to examine mail.
  • Major news event occurs and totally distracts from the message you have sent. The recipient ends up concentrating solely on the major news event, to the detriment of the well-design mailing piece. Two of the most extreme events that caused billions of well-intentioned and well- designed mailing pieces to end up being thrown in the trash are when JFK was assassinated and when 9-11 occurred. However, it doesn’t take anything of that magnitude to distract prospects.
  • Poor timing as to when a mailing piece is scheduled to arrive often has a significant impact on if and when a mailing pieces is opened and/or read.
  • Poor headlines and/or subject lines (whether direct mail or email campaigns) can have a major impact on whether a mailer is ever opened let alone read!

BIRTH OF THE “RULE OF 27”

So, if your goal is to place an effective advertising message in front of a prospect, and turn him into a customer, it may indeed require putting at least 27 mailing pieces (Combining Rules #1 and #2)…

KNOWING that it will easily take nine mailing pieces (or more) to establish your credibility (Rule #1) and knowing that the average recipient may only recall seeing one out of every three pieces you send him (Rule #2),  you may indeed have to send at least 27 marketing/mailing pieces for the numbers to work out! Formula: 9 x 3 = 27 That’s the Rule of 27!

First, you plan on mailing 27 pieces accepting the fact that you are in this for the long haul. You must be prepared for the deadly silence that often occurs after launching a direct mail campaign.

“You must be prepared for the deadly silence that often occurs after launching a direct mail campaign.

Second, even assuming you are successful in getting nine marketing pieces on your recipient’s desk, your marketing efforts and writing skills will certainly be put to the test while you get him to budge and possibly consider using your services.

Be prepared for some depressing facts as you first launch you your direct mail campaign. You will be extremely lucky if after trashing your first three mailing pieces, that your prospect will consider looking at you next four to six mailers for eight seconds or less.

Finally, if you are extremely lucky, and the stars are aligned in your favor, the prospect or recipient may finally come around, possibly find some interest in your products or services, and finally, finally, after you have sent him/her 27 ore more pieces over the course of 6 months to a year, they may finally pick up the phone and give you a call.

Here are some other useful links that discuss this rule as well…

AMEX –  The Most Important Rule in Marketing

Once A Day MarketingMarketing the Rule of 27

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SPE – A Critical Ratio in Covid-19 Era!

The biggest challenge confronting the printing industry today is how quickly individual firms are reacting to sudden as well as prolonged declines in sales. The declines are no longer looked at at temporary, but rather something that may be with many of us for many, many months to come.

With dramatic declines in reported sales for the past five months, many printers are now closely reexamining what were once deemed to be minimum staffing levels – All of this as a result of Covid-19!

Declines in Sales Projected to Continue

Sales Per Employee (SPE) has long been considered a primary productivity ratio in the printing industry, and it has now moved to the forefront of discussions as to how best firms should deal with the current economic upheaval facing our industry.

Put in the simplest of terms, SPE essentially answers the question as to how many employees should it take to produce XXX in sales. According to our survey data, sales already took a dramatic hit in the March – July time frame and most printers are projecting those decline to continue well into 2021.

Approximately 80% of our industry claim Covid-19 has had a significant to catastrophic impact on their business.

In light of these projected declines, owners need to be countering these projected declines with equally robust reductions in employee staffing as well.

“In light of these projected declines, owners need to be countering these projected declines with equally robust reductions in employee staffing as well.

SPE is always based upon annual sales, actual or project. It is calculated by dividing annual sales (excluding postage income if applicable) by the total number of of FT equivalent employees, including all working owners.

Whether or not an employee takes out a salary (such as spouse or other family member) is not factored into this calculation. If the individual contributes in any way towards the production of the “product” or “service” they are counted. This would include all regular employees, spouses, partners, in-house bookkeepers or outside sales reps.

If a firm reports $1,200,000 in annual sales and utilizes or requires an equivalent of eight (8) employees (including the owner and his/her spouse) their SPE would be  $150,000. Contrast that with another firm doing almost exactly the same sales volume (very similar sales breakdown) but requires 10 employees to produce those sales their SPE would be $120,000!

If you currently employ eight employees, including yourself and a sales rep, you should expect, assuming proper pricing and the right equipment, to produce produce $1,500,000 in sales!

An SPE number can also tell you how much in sales can you expect to produce with a specific number of employees. If you currently employ eight employees, including yourself and a sales rep, you should expect, assuming proper pricing and the right equipment, to produce produce $1,500,000 in sales! This is based upon data taken from the SPE quartile analysis chart below.

SPE Quartile Analysis based upon 2019-20 Digital Color Pricing Study.

Don’t Smile Yet!

Before you start patting yourself on the back or giving your manager or spouse a “high five,” it is important to note that SPEs can vary dramatically within a single study or report. NPRC not only calculates individual SPEs in order to obtain averages and medians, it also ranks the SPEs from low to high (after excluding outliers) and then divides the list into four quartiles.

So while you may be eager to pat yourself on the back for achieving an SPE of $136,000 you should be aware of the fact that the average for the top quartile in that study was $184,939.

Remember too, that the SPE reported for each quartile is just that – an average of that breakout, meaning that the actual SPE range within a quartile (See  Top Qrtl. below) was probably in the $160,000 to $215,000 or possibly more.

Note the close similarity in SPEs reported in a variety of NPRC industry surveys.

Turning a Blind Eye to Sales Declines

When sales suddenly decline precipitously, it is only human nature to initially excuse to ignore the event as a one-time drop. Many printers will simply view a sudden drop as an “outlier.” The natural reaction by many is to assume that sales will recover quickly. Historically speaking, sales have indeed recovered quickly – that is, of course, until Covid-19 came along.

“Historically speaking, sales have indeed recovered quickly – that is, of course, until Covid-19 came along.

Not only did sales plummet in March, but the dramatic decline in sales continued throughout the 2nd quartile (April – June). Average 3rd quarter sales, according to our most recent survey, are projected to be even worse at $174,597. Median sales are predicted to be even worse at $156,681.

Based upon input from survey participants, industry sales are are not expected to recover anytime soon!

What about the 4th quarter? Yes, while survey participants projected a slight improvement in 4th quarter sales, that projection of $307,025 for the 4th quarter is still 26% below what was reported for the 1st quarter.

Future of the Industry?

The facts are pretty clear. Robust sales are not going to return anytime soon. There is a great deal of pessimism in the industry, and while many tell us they are in it for the long haul and have sufficient cash reserves, most also candidly tell us they think the odds are about 50-50 that we will see any improvements before July 2021.

Knowing that sales are not going to recover anytime soon, it is probably long-past the time for owners to take a close look at staffing, including where they can make reductions.

Knowing that sales are not going to recover anytime soon, it is probably long-past the time for owners to take a close look at staffing, including where they can make reductions. Hopefully, the easy staff reductions have already occurred. Terminating “bad apples” as well as “excess” employees has already occurred.

Unfortunately, as we continue to muddle through the 3rd quarter and prepare for the 4th quarter, owners will now have to make some of the hardest decisions in their careers – terminating good productive employees with good attitudes.  Some owners will be shocked by that statement, but having to terminate good, productive employees is simply a harsh reality – one that at least needs to be seriously considered.

“… owners will now have to make some of the hardest decisions in their careers – terminating good productive employees with good attitudes.

You either have enough sales to support these employees at pre-Covid-19 levels of productivity or you don’t. What kind of decline in SPEs and owner compensation are you truly willing to absorb before you will act? That is indeed a question only you can answer.

 

 

 

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NPRC Report Projects Sales Decline of 25%

Melbourne, FL, July 23-2020 – The National Printing Research Council (NPRC) has just published its latest report that explores the impact of Convid-19 on the printing industry. The report is based on a survey conducted between July 10-16, 2020. The 24-question survey attracted more than 190 participants.

Distribution of the initial 9-page report was and is being limited to participants only. Survey participants were provided confidential download instructions between July 22-23.

The complete report, however, will be made available to all printers, regardless of participation status, on Aug. 10, 2020. “We are slowly learning our lessons. Having now conducted three Covid-19 Surveys, we couldn’t help but notice a subtle decline in participation levels,” notes John Stewart, Executive Director of NPRC. “We believe many firms chose not to complete additional surveys because they assumed they would be able to read the results anyway,” adds Stewart.

“Free distribution of survey results will not longer be the case,” notes Stewart. “Henceforth, we will make it clear in our survey promotions that results of our surveys will only be provided to survey participants. Additional distribution to non-participants will be at our discretion.” adds Stewart.

Sharing of Some Results…

Based upon the results of our survey, it is easy to conclude on the one hand that the printing industry appears quite resilient. On the other hand, it is also quite clear that the vast majority of printers will be facing major challenges in the months and possibly years ahead. While it is no surprise that 2nd quarter sales would be down significantly, projections for the 3rd quarter of 2020 appear even worse, according to our data.

Looking forward to the 4th quarter, we find that printers are projecting a 26% decline in sales ($415,295 down to $307,025). Examining median figures we find that the projected drop in sales is even worse at almost 32%.

Dramatic Decline in SPE

With the dramatic decline in sales beginning in early March 2020, it is also no surprise that sales per employee (SPE) took an even greater dramatic hit due to the delayed reaction by most printers as to how they would handle payroll and staffing issues.

The chart below illustrates the dramatic decline in sales per employee as first calculated for Jan-Mar. 2020 and then for subsequent periods. Notice the dramatic 44% decline in average SPE between the 1st quarter and the 2nd quarter.

While the 1st quarter SPEs might be considered somewhat “optimistic” in terms of national averages reported in the past, the SPEs reported for the remaining three time-frames are signs of a troubled industry, especially if this trend continues into 2021.

Generally speaking, SPEs are indicative of relative degrees of productivity and there is little doubt that Covid-19 has directly and indirectly impacted productivity of the average printing firm. We suspect it will be at least 12-18 months before we see a return to healthier SPEs.

A special note as to our SPE calculations. The data below is most useful and informative when examined within its own context, as opposed to comparing to historical SPEs reported in other studies.  Nonetheless, the periodic changes are reliable in terms of the time frames noted.

Impact of Convid-19 on Your Business

Our survey asked printers to what degree has Covid-19 impacted their business during the January-June time-frame. As you can see from the graph below, approximately 78% of all participants said Covid-19 has had a significant if not catastrophic negative impact on their business. The results are certainly not surprising. Some printers will clearly learn to roll with the punches, but many others will keep absorbing them until they can’t take it anymore.

Clearly, learning to closely monitor, control and reduce total labor costs will continue to be the single greatest challenge facing printers in the next 6-12 months. Printers who fail to grasp the critical significance of payroll costs as a percent of sales and who fail to react quickly to these “red flags” may find themselves facing even greater changes in the 2nd half of this year than they faced in the first half.

Reacting quickly to sharp declines in sales with equivalent adjustments in labor costs is a skill that needs to be sharpened in this era of Covid-19.

Cash Reserves

Despite an abundance of discouraging “negative data” collected in our most recent survey, we were surprised and encouraged to find that almost 24% of our participants told us the they have enough cash reserves to last at least six months, while an additional 50% say the can last one year or more.

Confidence Level

One of our key survey questions posed the following: “Taking into account all that has transpired in the past four months (March – June), how would you rate your confidence level that your business will be somewhat ‘back to normal’ or better by July 2021?” The scale we used went from “-100” on the left, “0”0 at the center point to “100” on the right.

We intended and interpreted that firms selecting the center point were indicating a 50-50 confidence level that things would return to normal. Or, another interpretation might be that 28% of participants were sort of “neutral” in their predictions, selecting neither a positive or negative view of what might happen between now and July 2021.

Participation in Future Surveys?

As noted earlier, we intend to supply the entire 9-page Covid-19 #3 Summer report no later than August 10, 2020. We strongly encourage you to participate in future surveys. We are the only association serving the printing industry that brings you up-to-the-minute surveys and reports. We are proud of the caliber and quality of the reports we publish, whether they be various pricing reports, mailing and signs studies, or statistical studies reporting on the latest financial benchmarks in our industry.

We encourage you to visit our Blog (See tab at top of HOME page) or our Bookstore. When visiting the Bookstore, you can click on any of the dozen or more studies depicted to obtain additional information. In most cases, we offer a free preview of the Table of Contents for each study. Oftentimes, we also provide for free down loads of sample pages as well. Best yet, all of our studies are offered on a 100% money-back guaranteed basis.

Revision date: 7-23-20, 4:45 p.m.

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