The bottom lines for commercial printers is inextricably tied to that of their clients. After all, when times get tough, printing and advertising budgets are often among the first business expenses to get squeezed — and, make no mistake, area printers are feeling that pressure. But a recession, they say, is no time for retrenching. Instead, printers must continue to invest in their business, seek innovative technologies and new markets, and, yes, endure some tight margins if they want to re-emerge stronger when the economic clouds clear.

In the early autumn of 2008, Neil Brittman, president of East Longmeadow-based John C. Otto Co., listened as the president of Consolidated Graphics, the printing house’s parent corporation, issued a warning.

Specifically, attendees of a meeting of fellow company presidents were told that the printing industry would be significantly impacted by a growing economic downturn, and that individual shops should make changes in advance to gird for a loss in business.

“I started to put in cost-savings initiatives,” Brittman said. “We have national vendor contracts, and we looked to renegotiate some of them, and we obviously looked at our labor staff in terms of controlling our hours while still meeting customer expectations for deliveries.”

Good advice, as it turned out, because across the board, printers are dealing with a similar slide in order volume — and are scrambling to come up with new strategies, service niches, and belt-tightening moves to compensate.

Unfortunately, we’re all in the same bucket,” said Rick Martin, president of Advanced Print & Copy in West Springfield. “We deal with different segments of the print-buying public, and I don’t think there’s too much difference between the high-end printers and quick printers like us in terms of the size of the orders. The joke last year was that ‘off 10% is the new even.’ And it won’t start getting better until the order sizes start going back up.”

Greg Desrosiers, vice president of sales for Hadley Printing in Holyoke, also conceded that printers have been challenged by a recession that has forced their clients to cut back on printing expenses.

“Without a doubt, the economy has forced us to analyze every little part of our business to make sure we’re as profitable as we can be, given the challenges,” he told BusinessWest. “Everyone is spending only what they have to, only printing things they have to. Like every other business, they’re watching every dollar, and that has a trickle-down effect, which we’ve certainly felt.”

Glass Half-full

Despite the rough economic conditions, Martin is trying to be optimistic, saying it could be worse.

“We’re off noticeably — about 5% to 6% for the year — but it’s manageable,” he said. “People are definitely cutting back, and they’re waiting until the last second to order — when they reorder 2,500 envelopes, they’re ordering when there are five left on the counter, not when there’s a box. So turnaround times are shortened, too.”

In addition, companies are scaling back their marketing budgets and, in doing so, cleaning up their mailing lists, he explained. “We do a lot of direct mail, and they’re cutting back on that. They’re mailing to their more definitive customers and not doing as much prospecting. Everyone’s in survival mode, both printers and their customers.”

Across the board, Martin said, the average order size is down. In addition, many companies are calling for budget-friendly redesigns of letterhead and other printed materials — for example, going from four-color to two-color designs.

“The printing budget is an expense,” he said, noting that advertising is taking the biggest hit. Even though postage, not printing, generally takes up the lion’s share of the cost of direct mail, it’s often enough to sink the whole project. “There’s obviously no way to cut out the postage unless you don’t mail, or you reduce the size of the mailing list.”

Brittman said that one of the main challenges of a recession is predicting how much staff is needed when business fluctuates, sometimes wildly.

“We did what we had to do in terms of scaling down our staff as we experienced, like many companies, a reduction in volume,” he explained. “But now we’re seeing upticks in volume from customers who had their inventory levels run low, and we’re seeing requests ramp up very quickly, and we’re doing it with reduced personnel.”

At the same time, John C. Otto is diversifying into new revenue streams, notably its embrace of digital printing technology. “We’ve expanded our digital capabilities, and that’s one of the fastest-growing segments of our business,” Martin said.

“We’ve also expanded into order fulfillment; we’ve taken about 4,500 square feet and turned it into a fulfillment center,” he added. “That’s been a benefit to our customers in warehousing their materials.”

It also helps, he said, to be part of a larger corporation — Consolidated Graphics comprises some 70 companies — that can offer customers an array of services that go beyond any one shop’s in-house offerings, Brittman said.

Diversity of customers is also a plus, Desrosiers said, noting that Hadley’s clients typically fall into three areas: schools and colleges, various types of businesses, and ad agencies and designers. While the latter two niches have been impacted by the recession, educational work has been humming along.

“Schools have to ride a little different pattern,” he said, explaining that their budgets are usually set in advance, and so far those have not shifted too much. “Who knows — if this upcoming year is a bad year, if fewer people are donating to the schools, maybe next year’s budget will be different for them.”

Hadley has another economic buffer, Desrosiers said, and that’s the company’s certification by the Forest Stewardship Council — John C. Otto is also FSC-certified — that recognizes a printing house’s commitment to environmentally friendly materials, recycling, and other ‘green’ efforts.

“Customers ask about it,” he said. “Given the economy, it has sometimes helped us seal the deal. People see it as one more benefit to working with Hadley Printing.”

In addition, in a more competitive market for available jobs, Hadley has added a second shift, and is trying to compensate for reduced margins with volume. “It’s the basics of economics,” Desrosiers said. “If we run the equipment longer, we can sometimes give a more competitive price because we’re paying fixed costs over a longer period of time. That’s one of the ways of dealing with the economic situation.”

Forward Inking

With all the belt-tightening going on among printers, most say that it’s a big mistake to stop investing in new equipment and other upgrades.

“There aren’t any loud, screaming needs now, but this is such a capital-intensive business that, even in tough economic times, if you have a little profit, you have to put it back into the business every year,” Desrosiers said. “If you don’t, it catches up to you years down the road.”

To that end, Hadley’s prepress department has added new software that was necessary to access 24/7 online support from the manufacturer. “If you don’t do little things like that every year, you find yourself behind the 8-ball,” he explained. “We’re constantly trying to invest back into the business, even in the most challenging times.”

Just as important, Brittman said, is the need for printers to understand that their economic woes are directly related to the challenges of their clients, who in turn want to know how their print shop can help them save money.

“It’s basically finding solutions coupled with finding ways to save customers money by lowering their costs of printing,” Brittman said. “How can we use different stocks? Can we gang up jobs better? There are so many things we can do, and we need to approach the customer aiming to help them out and lower their costs.”

After all, printers can’t scale back due to economic hardship and not expect their customers to have the same priorities; in a very real sense, everyone’s in this recession together.

“All businesses, if they haven’t done the cost-savings initiatives — labor reduction, wage reduction — are finding themselves in a situation where they’re struggling,” he said. “Those who made the right moves at the right time will survive, and we’re working with them to help them on the printing end of it.”

And when economic recovery does arrive, printing promises to be a lagging indicator, as companies that have scaled back their orders aren’t likely to ramp them back up until their own bottom lines are looking healthier.

“At this point, we’re just trying to compensate for what’s happening,” Martin said, noting that, although he has had to scale some work hours back, no one has been let go at his shop. “We’re viable, and we haven’t had to cut back staff, so that’s a good thing.”

Desrosiers said his business cycle somewhat follows that of the stock market. “When it hit its low in the springtime, we saw kind of a lightness of orders, and that carried all the way through July. But there’s been an uptick since August which leads us to believe things are getting healthier, and that the worst is over.

“As a whole, I feel like the past couple of months have been very promising,” he told BusinessWest. “We’ve had a nice uptick since the summer, and I feel like the most difficult economic situation is behind us. I personally think it’s improving.”

And that’s news worth printing.

Joseph Bednar can be reached

at bednar@businesswest.com