From left, Printerworks' Dan Koven, Warren Silvester and Stefano Walker
THE CHALLENGE
Dan Koven and Warren Silvester founded PrinterWorks in 2000 as an office printer repair and service centre. After seeing an expanding range of services being provided in the printer market, they soon set their sights on adding other printing-related business that was going elsewhere.
"Our clients would go to one company for servicing, another for their toner, another for purchasing their hardware, then go to other companies for consulting on how to make it all work together," says Stefano Walker, who joined PrinterWorks as the company's third owner in 2004.
With the desire to expand their revenue streams, they began to sell printers and associated products and offer system expertise to make everything run smoothly.
However, their clients were still going to other suppliers to take care of different aspects of their printing needs.
The PrinterWorks team needed a strategy that would make clients see the advantage of using them as a one-stop shop.
THE BACKGROUND
Mr. Koven started what would become PrinterWorks as a small print, copy and fax service, and repair business in Vancouver in 1987. The company grew based on his fast and reliable service, and, in 2000, Mr. Silvester joined him to build the business and establish the PrinterWorks brand.
They observed that the costs of printers, copiers and faxes were decreasing, but their clients' total printing costs were growing at a steep rate. Demand for printing within organizations was growing quickly and companies were using a disparate range of suppliers, lease agreements and service providers to keep up.
As a result, the PrinterWorks team noticed that clients found it difficult to calculate the exact costs of their total printing services. Too many products, too many buyers within organizations, and not enough co-ordination among decision makers were leaving clients in a state of confusion. They were often oversold with machines that were underused.
Not only did this fragmented approach to printer and copier service drain client budgets, but it was making it hard for PrinterWorks to maintain a stable revenue stream.
"Quite frankly, we would have gone out of business going the old route of offering one-off service to a range of clients," Mr. Walker says. "We were forced to change the dynamics of our business model to incorporate other streams of revenue and to make the whole thing work together."
THE SOLUTION
PrinterWorks made the client problem its own, asking itself if there was a way to develop a transparent, fully integrated print and copy management system, which merged all of the costs into a simple billing solution for clients.
Fortunately, the owners' combined 50 years of experience yielded reams of data they could use to break down every conceivable cost to their customers and translate it to a simple pay-per-page system, which PrinterWorks calls the "managed print services" model.
"We basically started from scratch," Mr. Walker says. "We started from a single cell on a spreadsheet to create a model 30 pages deep of how the entire copy business interrelates. We analyzed every little cost that can be associated with print, and brought it back to an easier pay-per-page way of billing for complete service."
The pay-per-page strategy isn't new – copier vendors had been doing it for years – but by applying the best practices of the copier industry to the printer industry, PrinterWorks developed a transparent print services plan for its customers.
THE RESULT
PrinterWorks launched its first managed pay-per-page print system in 2007. "We could see the stress level of our customers drop almost immediately," Mr. Koven says. "They finally understood what their total printing costs were and appreciated the savings that grew over time through efficiencies that were found in the overall system."
Since the introduction of its new model in 2007, Mr. Walker says the company has more than quadrupled its revenues, increased its gross margin by 20 per cent and delivered more than 200 million pages of printing to clients.
It has also been able to win contracts with organizations that had large printer and copier fleets, such as the 2,500 printing devices at British Columbia's Provincial Health Services Authority.
Special to The Globe and Mail
Jeff Kroeker is a lecturer in the accounting division at the Sauder School of Business at the University of British Columbia.
This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.
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