In the Feb. 2008 issue of Business Solutions, I interviewed Bob Hess, president of Paragon Print Systems. In the article ("The Vertical Market Gamble"), Hess explained that his company's growth strategy was focusing on one specific vertical as opposed to multiple verticals. "There might be an industry out there with only 1,000 companies in it, but if you've got a bar code printing product specifically for them, you've got a captive audience," he reasoned. At the time of print, Hess said that one of Paragon's current niche projects involved a chain-of-custody application designed for law enforcement, drug companies, and government. With such specialized solutions, Hess expected a 10% revenue bump in 2008. Did he get it?
Monocello: How has your business fared since we last spoke with you?
Hess: Our company has had growth every year since 1994, with the exception of 2009. This coincided with the market crash in Oct 2008 and subsequent economic collapse in 2009. We turned our focus on reducing supplier cost and managing price increases when possible with our client base. We increased our marketing budget in 2009-2011 with the assumption that most companies would cut these budgets. Our goal was to acquire a large number of clients and “ride” the growth of these clients when the economy recovered. That approach has worked well as we've have had profitable growth in 2010 and 2011.
Monocello: Are there any new technologies/solutions you're offering which are impacting your business?
Hess: We have successfully private labeled our own brand of thermal label printers and bar code scanners. Our market for private label is smaller resellers that are looking for a printer that is not as heavily marketed, but is feature rich and lower in cost than the major brands.
Monocello: Speak to any failings (small or large) you've experienced since we last spoke.
Hess: Our business management software does not tie in well to our CRM and we are unable to data mine to reach specific needs and markets within our clients. Our company has been slow in changing to a software that is better able to integrate with CRM and will also be on the cloud. The cost for this change will be quite expensive for us but necessary. We have also seen a drop in service and we assume that companies are spending less up front for maintenance programs to roll the dice on repair costs that are not covered.
Monocello: Are there any other tips/tactics that you think are worth mentioning that are contributing to your success?
Hess: The markets have been up and down and I think there is a general fear of investment in business or change. In the midst of that we have not panicked with the ups and downs in the economy and all along have taken steps to reduce cost in everything but customer service and marketing. In those areas we have increased our spending. That has had positive results. We also always pay our vendors on time and treat them as partners. In turn I feel we have received better price concessions and that has helped us remain competitive with clients looking to reduce costs, or find a new supplier.