Don't Be Duped By This "Single Market"

A fast-growing exporter shares its best lessons on dealing with the surprising variety within the European Union

Written by John Lorinc

In the office productivity industry, the niche known as “managed print services” is growing at a pace that suggests the vision of the paperless office remains just that. According to one 2010 assessment, companies that help large corporations manage their internal printing costs have stumbled upon a global market that’s expanding by more than 30% annually.

None of this comes as a surprise to PrintFleet, a Kingston, Ont.-based firm that has built a suite of software systems that allow companies to track the performance of hundreds, or even thousands, of printing and copying stations, thus streamlining the drudge work of individually monitoring toner levels, tracking equipment energy consumption, and managing repairs. The firm’s software, which is available directly to corporate users or as part of a maintenance package on leased equipment, allows businesses to slash the operating costs of managing this corner of their information technology systems.

Unlike many SMEs that are tentatively testing the export waters, PrintFleet’s challenge is figuring out how to ride a furious wave of growth without capsizing.

Business is booming

In the past few years, the 34-person firm (ranked 397th on the PROFIT 500) has seen its international customer base explode, both south of the border and in Europe (the U.S. and Europe each account for about a third of overall revenues). “Our business is fundamentally an export business,” says PrintFleet’s chief commercial officer David Morrow. Indeed, about 90% of the company’s $5.3 million revenues (2012 figures) came from 120 different countries, but its primary customers are a handful of huge multinational printing equipment producers, like Cannon and Samsung, as well as some large distributors and dealers of printers in both the U.S. and Europe.

Given the number of places where it does business, PrintFleet’s main challenge has been growth management: how to expand the business into new and unfamiliar markets without over-extending itself. “Any SME,” observes Morrow, “has to be very, very clear on its own capacity and ability to develop any market and resist the seduction to fight in too many places at once.”

Moreover, PrintFleet’s executives have also learned that seemingly uniform regional markets have, in fact, nuances and variations that require additional investments of time and resources.

Regional variations are key

That, certainly, has been the company’s experience in Europe. Since entering the German market in 2008, Morrow says, the company has had to confront the reality that businesses in Germany approach their printing operations quite differently from businesses in, for example, Italy. “[The European market] is not uniform at all.” For example:

  • Pace of market development: The U.K. is about a year behind the U.S. in terms of technology adaptation, and the rest of Europe is about a year behind the U.K. Morrow says it was crucial for PrintFleet’s sales team to recognize those time lags as a means of grounding expectations.
  • Proving demand: In non-English speaking European markets, PrintFleet has invested in translating support materials and other documents. The company doesn’t enter a new country before gathering clear evidence that there’s sufficient demand for its managed print services. “We’re very focused on potential profitability before we enter a new market,” says Morrow.
  • Europe isn’t one market, despite what the EU says: As Morrow explains, PrintFleet’s primary clients are a handful of very large Asian equipment manufacturers, including Cannon, Konica-Minolta and Samsung. But it turns out that their country-level subsidiaries enjoy a lot of autonomy. Moreover, they transact business independently from the U.S. divisions, which are also PrintFleet clients. Bottom line: A successful relationship on one side of the Atlantic doesn’t automatically translate into a successful relationship on the other. Morrow says they have to work for each new market.
  • Don’t assume there are customers with market clout that extends right across Europe: Some of PrintFleet’s customers are value-added resellers of in-house software systems. Morrow notes that the firm has one such client with very strong market share in Germany and the Netherlands, but virtually no profile in the U.K. “They’re the number one player in half of Europe and a distant fourth in the rest.”

With its European presence now established, Morrow says the company will begin looking at Asia, India and South America in its next planning cycle. But, as with Europe, PrintFleet’s executives will be careful about not biting off more than the company can chew. Even in a thoroughly globalized company, one has to be careful about not being in too many places at once.

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