New Direction Partners, Jim Russell and Peter Schaefer, have won awards, served countless printing companies and have combined for several decades of experience within the print industry. They are fantastic dealmakers that have closed hundreds of transactions in virtually every segment of the printing and packaging industries.
Both men are considered experts in the field of acquisitions, but it is their wisdom that goes well beyond the the intricacies of a deal. We sat down with them as they begin preparing for America’s Print Show in August to discuss what they believe makes for a successful organization.
What has been the biggest change you have seen with the last couple years of awfulness?
Russell: At a big picture level, the industry has become an industry of the “Haves” and the “Have Nots.” Specifically, the “Haves” are the companies that are doing things that make their companies sticky. They’re offering a wide variety of services like digital storefronts, fulfillment and kitting, and they make it very challenging for the customer to move the book of business.
“The ‘Haves’ are the companies that are doing things that make their companies sticky.”
– Jim Russell
I don’t sense that the best organizations are just selling print jobs. And those are the companies that really have a strong future and will demand the most when they go to sell their business.
Schaefer: The “Have Nots” are doing the opposite. They have older equipment, are not investing in technology, and are not endeavoring to do the things that make a business sticky.
We see some clients flourishing right now because they are differentiating themselves. So differentiation is the key to get that customer stickiness and loyalty.
What is the difference between the “Haves” and the “Have Nots”?
Schaefer: The “Haves” are the companies that have decided they’re not in the print business anymore. They’re in the community building business and they need to provide all the services that you need to be an effective communications company.
When you go omni-channel, use data analytics and you track the ROI on campaigns, you are able to go deeper with the customer and it makes you “sticky.”
The other thing that the really successful companies are doing is solution selling. They’re meeting with C level people and not just the print buyers. They are finding out the pain points of the customer and developing solutions just for that customer.
Russell: A few years ago offset print was maybe less than 50% of their revenue. Today, it feels like 30% or less of their revenue is offset. It drives home Peter’s point that they’re not really printers anymore. Print may be the root of the business, but they’ve become marketing companies that provide so much more.
What new revenue streams are ripe for print businesses?
Schaefer: Some of the most successful companies are targeting industry verticals. And it is not targeting high growth industries like healthcare. A lot of good work is being done targeting lower growth segments like the airline or hotel industry. Regardless, once you get a customer within a vertical and can demonstrate success, it’s very easy to bring on other customers within that community.
Russell: From a product standpoint, the best companies are really focused. They promote products that are not discretionary spend. And so when the economy dips as it did with COVID, the companies that did really well produced the stuff that still had to get done like labels, packaging and transactional print.
Do you see a difference in leadership between the successful and the marginal companies in our industry?
Russell: I think the “Haves” are innovators. They think outside the box and are committed to solution selling. It is that innovative mindset that they use to develop their management teams. They don’t rely on just one person leading the company and they create a very supportive culture. In turn, they invest in technology and they are very disciplined financially. That all comes from the top.
Schaefer: I called a CEO recently that was somewhat surprised that I had heard of his company. He told me that they lived under the radar intentionally. And what I learned about him was that he didn’t even know who his competition was nor was he focused on equipment. He and his company are maniacally focused on their customers and have developed an incredible solution-selling organization. That culture, however, all starts with him.
Do you feel like there is an age requirement to be a “Have” versus a “Have Not”?
Russell: I would say that when you look at the “Have Nots” that are selling their businesses, predominantly it’s going to be owners that are in the stage of life that they are thinking of transitioning to retirement. They realize that making the proper investments is going to take a long time to pay off. I give them a lot of credit because they realize that selling is the right thing to do when they cannot be the best steward for the business.
On the other hand, I know a company with 70-year-old owners who simply love the business. They love going to work. And they’re investing back in the business year after year. So, age has nothing to do with success.
Schaefer: I would echo that. While the people that sell solution concepts tend to be younger, there is not an age separator. However, it is hard to train a 40-year-old veteran to go out and sell solutions. The legacy salesperson is still selling the same stuff and may retire without changing.
“The ‘Haves’ are the companies that have decided they’re not in the print business anymore.”
– Peter Schaefer
What would be the biggest piece of advice that you would give an owner?
Schaefer: Don’t be afraid to reinvest back in your business. There are companies in our industry that are flourishing and it’s because they have not been afraid to reinvest back in the business. I’m not trying to oversimplify it. However, there are plenty of printers who are still troubled because of COVID and other dynamics that have happened in the industry. There are tremendous successes in our industry where they have demonstrated the courage to reinvest back in the business.
Russell: I certainly agree with that. And I think that you need to look at where the industry is going with regard to the kind of products that have more track life and more barriers to entry. The bottom line is that you cannot go off in six or eight different directions. You need do some analysis and pick one that had has the best chance of success over time.
