Adding custom features to multi-part forms can maintain profitability.
Conventional wisdom dictates abandoning a sinking ship. And, likewise, many would counsel a shift away from selling declining product lines, such as multi-part forms, in favor of growing opportunities in newer markets.
A recent industry study pegged the decline of conventional forms—which includes continuous, checks, salesbooks, pegboard and short-run forms, as well as multi-parts—at approximately 7.5 percent from 2000 to 2002. During the same period, the total retail value of products such as labels, direct mail, tags, tickets, commercial and quick printing, finishing services and promotional products rose approximately 4.2 percent.
It seems intuitive to drop declining product lines for those experiencing growth in order to see sales grow. After all, if more and more customers want something, shouldn't that be where sales are concentrated?
Not so fast, say manufacturers of these venerable forms. While they acknowledge that sales of multi-parts have dipped, they point out a steady need for both basic and value-added forms in this product line, which distributors can still profitably exploit.
"Our sales on multi-part forms have gone down just a little over the last five years," said Kenneth Adams, owner of Central States Business Forms, Dewey, Okla. "But, multi-parts still account for 60 percent of our sales. Other products have declined more."
Marsha Bishop, forms sales and customer service manager for The Vallis Companies, Glendale Heights, Ill., said that multi-part forms were "definitely on the decline," accounting for 50 percent or less of the manufacturer's sales. "We're trying to put value to those business forms by adding things such as labels and cards," she said.
Becky Douthat, vice president of National Business Forms, Greenville, Tenn., said, "We're busy, but with unit sets, it's been a gradual decline. Multi-parts have fewer parts now, and continuous has given way to cut-sheets." She echoed Bishop's assessment that sales and growth in multi-part orders will come primarily from more specialized products. "Plain vanilla orders are down," she said, "but for unit sets, we have lots of unique bells and whistles—pattern perfs, jumbo numbers and transfer tape, as well as value-added affixed labels, pressure-sensitive labels and diecutting. Those orders have been steady."
The message is clear—distributors need to tailor generic multi-part forms to their customers' needs by emphasizing custom features and processes to hold on to sales.
Affixed labels and cards add value and encourage overall sales of multi-part product orders, Adams said. "We're seeing more and more integrated cards such as loyalty and membership cards, and sometimes short-term medical information put on the cards is integrated into the multi-part forms," he said.
Seeking and filling customers' needs is what leads to continuing orders on multi-parts, manufacturers say. "Explain to a customer how a form might work better with a perf, score or punch," suggested Douthat. "Or, offer non-standard-size forms if that will benefit the customer." She added that creativity not only saves a sale, but it also makes the customer's life easier and garners loyalty.
Bishop noted that demand for labels is still high and suggested that features such as special numbering, barcodes and mailers can help a distributor maintain an account. "Distributors tend to hang on to complex forms orders once they get them," she said. "With commodity items, it's more dog-eat-dog."
Go Vertical
Manufacturers suggest looking at vertical markets to sniff out value-added opportunities.
For instance, an aging population is requiring more medical services at a time when technology and testing are improving health monitoring, thus increasing the need for medical forms. Hospitals are one of the biggest users of multi-part forms, Bishop said, and car dealerships and mortgage companies also have a constant need for them. Adams pointed to insurance forms, deposit slips and almost anything to do with finance.
Douthat offered examples in the hospitality industry. "Hotels offer guests a card good for drinks or a dinner, or some other amenity," she said. "We sell a lot of this type of product."
Bishop noted that some industries that had traditionally used multi-part forms have since migrated to one-part. For instance, government used to generate reams of multi-parts. "Now, tax booklets use one-part forms bound together. Multi-part fishing licenses are now one-part. Even presidential ballots are one-part," she said. And, repairmen no longer generate multiple parts for their job ticket/sales receipt, she observed. "Now, they have a printer on their belts, and they input the data electronically and print out a one-part receipt," she said.
Shipping manifests are holding steady, but sales are slowly eroding even in this arena, Bishop said. Still, opportunities exist. "We just got a contract for a 14-part laser form," she said. "Not too many people can produce it."
National unit set averages run from 10,000 to 25,000. "Longer runs are few and far between," Douthat said. Even with a price break for larger quantities, which are then warehoused for free, most customers want just-in-time orders, she said.
Bishop said that five years ago, orders were in the one million to two million range. "Now, we're lucky to get 500,000 to one million. The basic order now is 10,000 to 20,000 with a quick turnaround." She attributed the decline to factors such as paper prices and the economy. "Very few people are storing forms," she said.
In response, Vallis is running its Baltimore plant around the clock to offer more production time for quick turns. "This location has got a handle on just-in-time forms," Bishop said.
Back to Basics
It's always more challenging to sell a mature product than a new, flashy one, but careful observation of end-users' paper flow and needs can still yield substantial sales of multi-parts, manufacturers say.
"Don't overlook forms that don't run through a computer printer," Adams said. "Where the printer is involved, there is an opportunity for the form to go electronic and be phased out. Sometimes, distributors have to look at what the customers are actually using. Often, it's so mundane that it's overlooked."
Bishop noted that there is no substitute for thorough product knowledge. "Being able to take a form and do what the customer wants by being knowledgeable about the product says it all. Show them how it's cost-effective to customize with barcodes, labels and other features." She said that far from abandoning this time-worn product, Vallis plans to "bring multi-parts back."
Reflecting on the many markets that still make use of multi-parts, Adams observed, "There seems to be an awful lot of multi-part forms still being utilized. That's a positive."
By Janet R. Gross