VistaPrint Ups the Ante - Enters Marketing Services Business

By Cary Sherburne, Senior WTT Editor

June 20, 2007 -- VistaPrint, one of the most efficient printing operations in North America—if not the most efficient—announced it has entered the marketing services business with two new offerings: Mailing Services and Creative Services.  VistaPrint styles itself as the leading online supplier of high-quality graphic design services and customized printed products to small businesses and consumers.  As a print service provider, if you haven’t taken the opportunity to order something from VistaPrint, you should.  It always pays to know your competition, and with this latest move, VistaPrint is becoming even more of a force to be reckoned with. WhatTheyThink spoke with Trynka Shineman, Senior Vice President of North American Marketing, to get the skinny.

WTT:  Trynka, this is quite an exciting announcement from VistaPrint.  Can you give me a little background on the services and why you chose these specific ones?

TS:  Yes, we are very excited about these services. The big move for us that they represent is moving from providing a product to entering the services business.  These two services, mailing services and creative services, were the two of the top services requested most by our SOHO customer base.  They will help us deepen our relationship with our SOHO customers by transforming us from a small business printer to a small business marketing service.  We want to make it easy and affordable for our customers to do good marketing.

WTT:  So how do your mailing services work?

TS:  Customers can come on the site, design postcard, purchase and/or upload a list, and we will print, personalize and mail the postcard in as few as four days.  It is a remarkable service, very easy for customers to do.  Many orders can be completed in as little as 20 minutes.  And the quantities they can order and still take advantage of bulk mail rates are very low. You can get bulk mail rates with as little as 50 postcards versus the 300 pieces the Post Office requires, and that makes the service very accessible and affordable to the customer.  It is less than $100 to do a 50-card campaign.  Our list capabilities are very advanced yet very easy to use.  You can upload a list from Excel, purchase a list on our site, or use a combination and we merge and de-dupe the lists.  We also standardize the list to ensure the pieces will go through the postal system and meet postal discount requirements. 

WTT:  And creative services?

TS:  We act as an internal agency for small businesses.  The process starts with a 20 to 30 minute telephone interview. Then we write the copy, design the postcard, letterhead, presentation folder, brochure, datasheet or flyer, and can ship the completed product within four days.  It is also very affordable, only $29.99 for full postcard copy and design, including our standard two rounds of edits.  In many small businesses, people can pick a design off the site or customize a design, but writing effective copy is harder for our small business clients.  This service saves them time and often we can produce a better quality product.  VistaPrint is very excited about this combination of services marking our entrance into the marketing services business.

WTT:  What was the driver for adding these services?

TS:  As I indicated, in customer surveys and other customer communications, they were the two of the top services our customers wanted us to add.  For us, it gave us an opportunity to expand the breadth of our offerings into the services side of the business.

WTT:  How long have these services been in the works?

TS:  The mailing services project kicked off about eight months ago, in terms of deciding how we would go to market, how we would provide the lists, etc.  There is a lot of complexity around making a complicated process very simple for the user, and it is complex to aggregate the orders to gain access to postal discounts for lower quantities.  We have been looking at creative services on a smaller scale for a while, but this program has been in development for about four months. 

WTT:  Have you been testing the service?  Any idea what the volumes are likely to be? 

TS:  We know from survey data what type of demand we will see, and they are two of the most requested services.  We have done testing of the user interface with on-site and online focus groups, having users try different scenarios to make sure it was easy to understand and use. 

WTT:  Does the service include the ability to store mail databases for future use? 

TS:  We do store the lists, and you can reuse them or merge them with new lists.  It is not a database where you select specific addresses; we think it is simpler for our customers to have unique lists that can be merged and purged to create new lists from lists you upload or purchase.

WTT:  Any plans to add any XMPie-like cross media services with generation of personalized URLs, email campaigns, etc.?

TS:  We are definitely looking at different services as we talk to our customers about what they need from VistaPrint.  But we can’t disclose any specifics at this time.

WTT:  Can you give us an update on VistaPrint overall?  With 18 localized web sites, how many production facilities do you have?

TS:  Our North American production site is in Windsor, Ontario - Canada, and we have a facility in Venlo, the Netherlands for European production. 

WTT:  How much of your business is international versus North America?

TS:  For our fourth fiscal quarter of 2006, revenue from non-U.S. websites was 29% of the total, up from 26% in the same quarter of the prior year.

WTT:  Any plans to open any additional international plants or partner with offshore printers?

TS:  Nothing at this time, no.

WTT:  At one point, I remember reading that VistaPrint was processing 10,000 unique orders per day, and that from order entry through shipping, the average human intervention on any given order is 60 seconds.  Does that still hold true?

TS:  Yes, in terms of the 60 seconds.  We are processing about 18,000 orders per day now.

WTT:  You have a pretty sophisticated cross-sell/up-sell mechanism built into your web site.  By what percent does that usually increase the order revenue, on average?

TS:  We can’t disclose that, but our average order value is about $30. Let me just say that the cross-selling has been effective.

WTT:  So what kind of financial results has VistaPrint been reporting?

TS:  We have stayed consistently at about the 60% growth mark year over year, with 27 consecutive quarters of organic growth.  In our most recent financial quarter, we secured 800,000 new customers, and 63% of bookings came from repeat customers.

WTT:  What are some of the recent partnerships and alliances you have entered into?

TS:  We announced a marketing agreement with Website Pros Inc to offer Web design and online marketing services in October of 2006. We are always looking for appropriate opportunities.

WTT:  How many people on your staff actually have a background in the printing industry? And how many total employees do you have now?

TS:  We have 900 employees now. I can tell you that the many of the people that run the production plant have a printing background.  However, the way we do production is very different from a traditional printer, so we do look for expertise in running CMYK presses, but we have a much more automated process than you would have in a traditional print shop. So sometimes we source production employees from auto manufacturing and other industries that are into lean manufacturing and other manufacturing automation.  Those are also good backgrounds for us.

WTT:  Is there anything else you would like to add before we close?

TS:  We recently launched T-shirts on our site as a promotional product for small business.  That was a big change for us from ink on paper and was another service our customers requested.  We are producing T-shirts in both Canada and The Netherlands.  We also do custom sticky notes. You can order full color printed sticky note pads in quantities as low as one pad.  

WTT:  What technology are you using to product the T-shirts?

TS:  It is a proprietary production process and we can’t disclose details.

WTT:  Trynka, thanks for speaking with us today.  Very exciting news from VistaPrint.  We will stay tuned for more.

Cary can be reached via email at cary@sherburneassociates.com, online at www.sherburneassociates.com and by telephone at 603-430-5463.

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