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February 2004 | ||
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 The Kinko’s Killer Part 2 of 4 One of the most painful conclusions I arrived at in my long time study of Kinko’s is that they have a front of mind awareness for copy and print buyers that we (as printers) do not. My local newspaper, the Fargo Forum, has an advertising program called T.O.M.A. It stands for “Top Of Mind Awareness.” The program attempts to create name recognition – or front of mind awareness – for advertisers in the newspaper by selling them a long term contract that places a 2” x 3 column display ad in the newspaper everyday – six days a week. The newspaper believes that given enough time, an advertiser can create front of mind awareness for just about any type of business. In other words, if your prospect thinks of your business first, they’ll more than likely call you first. Well, what is interesting about the program is that a representative from the newspaper came to me and showed me the results of a random telephone survey they did among local business owners that placed Kinko’s as their #1 choice when they were asked to “name a local printer.” They were trying to scare me into buying their T.O.M.A. advertising plan in the newspaper, I thought. I didn’t buy the ad campaign – but they did succeed in scaring me. As painful as it was for me to admit, I think their survey was accurate. Kinko’s probably does have front of mind awareness in the mind of many print-buying business owners. It was at this moment in my life as a printer that I began to seriously think about Kinko’s as a worthy competitor that couldn’t be ignored. It didn’t matter that they seemed to do a lot of things “wrong.” The truth was that they were also doing a lot of things “right,” and I decided I’d better figure out what these right things were because they were appealing to many of my customers. Maybe even more than I realized. The question we have to ask about Kinko’s popularity is “why?” Why is Kinko’s so popular – even though they have so many shortcomings? Why do people flock to their stores in droves? (A Kinko’s store in Boulder, Colorado that I once visited with printer friend Henry Leonard had nineteen different customers in the store on a Tuesday afternoon!) Here is my list of what I call “The Kinko’s Advantage.” It’s the list of characteristics and attributes that Kinko’s possesses that, in my opinion, have made them so popular and such a tough competitor. The Kinko’s Advantage
I believe Kinko’s is beatable. If you think of your copy business in terms of “market share,” I think you can obtain a good market share by running a well-managed copy shop. On a personal note, my goal in Fargo is to obtain a 30% share of what I estimate to be a $2,000,000 a year copy market (Fargo’s population is 98,000). My goal is to see sales at my new copy shop reach $50,000 a month by the end of next year. I think I can have a 14% owners compensation on sales of $50,000 or profit of $7,000 a month. Beating Kinko’s – The Twelve Elements of Success Element #1. An Aggressive Pricing Strategy This will probably be the most controversial and most debated of the “Twelve Elements of Success,” but in my opinion it is almost impossible to compete with Kinko’s unless you’re willing to have an aggressive pricing strategy for your copy department. Here is a copy of the Kinko’s Price List in Fargo  (Click to enlarge in a new window)  (Click to enlarge in a new window) As I studied their printed price list, it’s obvious that Kinko’s no longer publishes the rock bottom prices they once did. In fact, their prices are pretty high – and should provide strong margins. As an example, they sell 100 copies on 20 lb color paper for $11.00; color copies for 99¢; litigation copies for 25¢ each; and machine stapling for .02¢ each. It occurred to me that I could beat those “Kinko’s prices” and still have a good profit margin. As we all know, Kinko’s will deeply discount bids and estimates from their printed price list, but the printed price list presented an opportunity for a competitive advantage. My strategy is to saturate my market with advertising materials that boldly address price up front. We’ll Beat Their Price by 15%…Guaranteed! When we opened my new copy center “The Unsloppy CopyShop” last November 1st, we launched a marketing blitz that focused on a price-based strategy. Our slogan was “We’ll Beat Their Prices by 15%…Guaranteed!” I know at this point some of you are starting to say no–no–no…but may I encourage you to keep an open mind and read on? The truth is, that for the last several years I’ve seen my once big time copy business erode away to almost nothing as I held my prices trying to win the battle on “quality and service” like all the experts at the printing conventions keep telling us to do. The only problem was my competitors aren’t listening to those experts! I thought, “Why not discount in some competitive situations, as long as I could still make money?” After all, I’d have a wider customer base that would more than likely purchase other products and services from my print shop…and not every customer asks for or needs a discount.  Our “We’ll Beat Their Prices by 15%…Guaranteed!” program is working. We have had numerous customers who have told us they will bring us their copy business if we can beat the price Kinko’s charged them last time they ordered copies. (This pricing strategy has accounted for approximately 10% of our sales since November 1st.)Here are two ways we promote our we’ll beat their price guarantee: In-Store Signage This 24” x 36” back lit sign is located on the wall at the end of my front counter. You can’t miss it when you visit The Unsloppy CopyShop. Postcard Mailings Here’s an attention grabbing 6” x 12” postcard mailing we use. It has done a great job creating name-brand awareness for our new copy shop and out-foxing Kinko’s on prices. Kinko’s has a “We’ll match their price” guarantee, but our guarantee trumps theirs. Our guarantee will not cost us anything. It will only result in some jobs being produced at a lower margin than we’d like. But in return, The Unsloppy CopyShop will defeat one of the “Eleven Kinko’s Advantages” I listed early.  (Click to enlarge in a new window)  (Click to enlarge in a new window) Well, that’s it for this week. Apologies for being late with this issue of the Kinko’s Killer – I just got a little busier than expected as a result of a lot of sickness going through our print shop. Watch for the next Kinko’s Killer in about 2 weeks. Happy Printing and Keep Those Presses Rolling! Mike Stevens Express Press 3401 Fiechtner Drive Fargo, North Dakota 58103 701-232-6044 Ext. 132 MikeStevens@ExpressPressUSA.com
 The regular Marketing Idea of the Month will return April 16, 2004, after "The Kinko's Killer" series is complete.
 The regular Management Idea of the Month will return April 16, 2004, after "The Kinko's Killer" series is complete.
 The regular Website Idea of the Month will return April 16, 2004, after "The Kinko's Killer" series is complete.
 The regular Teamwork Idea of the Month will return April 16, 2004, after "The Kinko's Killer" series is complete.
 The regular Interview of the Month will return April 16, 2004, after "The Kinko's Killer" series is complete.
 The regular Quick Quotes of the Month will return April 16, 2004 after "The Kinko's Killer" series is complete.
 The regular Sponsor News will return April 16, 2004 after "The Kinko's Killer" series is complete.
The Underground Printer is written by Mike Stevens and is available via e-mail on a free subscription basis. You can subscribe at any time. |
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