The best-kept secret for growing incremental revenue for Print Service Providers:
As a print service provider (PSP) staying profitable in an increasingly competitive market is a significant challenge. For PSP owners and operators, the path to profitability lies in expanding service offerings and embracing automation technology. To drive new revenue streams, PSPs should consider diversifying services expanding their portfolio to include high-value mail services. Offering transactional mail services for key verticals can help you gain incremental revenue streams by:
• Driving brand new revenue streams with existing customers
• Acquiring new customers
• Increase mailing profit margin
Transactional mail is one of the biggest opportunities we see in the industry, but only 3 percent of PSPs are taking advantage of work that is 5X more profitable than traditional print jobs like direct mail.
What do you mean by high-value transactional mail?
In this case, high-value mail encompasses business-to-consumer mail such as statements, and notifications that contain sensitive non-public information like protected health information (PHI), personal identifiers, and financial statements. Five key verticals for high-value mail include healthcare, finance, insurance, publicly traded companies, and law firms. These sectors require stringent compliance with state and federal regulations, making them willing to pay premium prices for secure and reliable mail services.
What are the benefits of High-Value Mail:
You can capture these additional revenue streams without hiring additional operators. We can help your current staff oversee high-security, high-volume customer communications using our best-in-class automation.
Higher profit margins: Transactional mail normally nets higher profit margins compared to traditional promotional mail. While promotional mail yields thin margins of 1-7 cents per piece, high-value mail can generate a minimum profit of 30 cents per envelope. Why? Because these mailers are willing to pay a premium for the mailing chain of custody service, as there are stiff penalties for privacy breaches.
Recurring Revenue: High-value mail typically involves long-term contracts (1-5 years) with guaranteed minimums, providing predictable and consistent revenue streams.
Business Valuation: By incorporating high-value mail services, PSPs can enhance their business valuation, an essential factor for future growth.
Many of these verticals care to outsource these mailings to print service providers classified as an automation document factory. An ADF is a print service provider who has not only the technology to provide that chain of custody, but also the credentials, the certifications, things like high tech, high Trust, SOC two, iso those type of certifications. That said it is estimated that approximately 3% of print service providers in the United States fall into this category.
Overcoming Entry Barriers
1. Technology:
Revenue growth alone is insufficient if operating costs escalate proportionally. Investing in automation technology is a strategic move to lower variable operating costs and enhance profitability. Up your game. Many PSPs struggle with legacy equipment that fails to keep pace with increasing volumes, leading to higher payroll costs and reduced profit margins.
Software with the reporting structure to prove the chain of custody. Legacy inserter machines suffer from inefficiencies due to time-consuming setup processes and limited capacity. So you can provide thorough, closed-loop verification and reporting.
2. Sales Training:
Quadient provides comprehensive sales training to help PSPs target the right clients and effectively pitch high-value mail services. This training covers cost justification, proposal preparation, and the nuances of selling to regulated industries.
3. Credentials:
Quadient has a purpose-built offering to support PSPs in entering the high-value mail market. This package includes affordable software and hardware technology, enabling rapid return on investment. PSPs can also leverage Quadient's credentials for high-value data processing, covering HIPAA, HITRUST, ISO certifications, and more.
By diversifying into high-value mail and investing in advanced systems like Quadient’s, PSPs can achieve higher profit margins, secure recurring revenue, and scale for future growth. Karim Manassa, Business Development Manager for Quadient, shares invaluable insights in his recent presentation.
This presentation and others are available for a limited time on demand. To learn more about how you can rejuvenate your business processes visit Quadient Connects platform. Choose from over 60+ complimentary sessions, demonstrations, and insights from more than 40 digital transformation experts. With topics from mailing solutions to customer communications management, document and finance automation there is no limit to what else you can learn and achieve.
