When Robert Keane launched Vistaprint in 1995, he never could have envisioned it would become the world's leading provider of printing services to small businesses. What are those printing services? For many, it's all about the low-cost business cards Vistaprint has become synonymous for. But it's much, much more than that. The company recently launched branded apparel to add it to its extensive list of offerings for small businesses. Moreover, for the 2011 fiscal year, global revenue is expected to net around $785-$800 million, with business cards only estimated to be 1/3 of that figure, according to Keane.
I recently had the chance to catch up with Keane in New York City, where we discussed the past, present and future of his company, the biggest challenges facing small businesses in marketing themselves, why the traditional business card will never go out of style and globalization.
Your target market remains small business owners, but you have over 9 million customers. How do you keep track of what those smaller enterprises need?
As we've gotten bigger, we still realize who our core customers are. In North America and Europe combined, there are about 50 million businesses with less than ten employees. Among those, about 90% are less than two employees and 80% one-person enterprises. So in fact, there are 40 million home-based or single-person firms. And we understand that their needs are different than a 10- or 20-person business. Those needs tend to be self-service and maintaining a professional image, all while dealing with a more constrained budget. That's where we fit in.
What are the biggest challenges facing small business owners in 2011?
Broadly beyond Vistaprint, it's difficult in this economy to get people to do jobs that may not be absolutely necessary to a client but are the real bread and butter of small business success. So whether it's a carpenter doing home renovations, a massage therapist or firms hiring fewer freelancers, you need to work a little harder to market your business in a tough economy. That's why I think we've done well: people turn to Vistaprint as a way to market their micro businesses.
Vistaprint is known so much for business cards, so what are the biggest challenges facing you in product marketing with the rise of digital technologies?
The rise of digital and electronic means of communication has been huge, and I'm talking specifically about websites, email marketing and local search. Websites have taken over for brochures, email marketing has ousted postcard mailings and local search has taken over Yellow Pages. We realize that the way small business marketing happens is not what it used to be. Today we are really a company that does all things marketing for micro businesses, offering a breath of products but with quantities that are right for their individual firm. So while business cards were about 70% of our $50 million business in 2005, it's now about one-third of our $800 million business in fiscal 2010.
Before we get beyond business cards, how important do they still remain? Will they ever lose prominence with digital communications taking over?
I'm convinced that more and more will continue to happen digitally, but I'm also convinced that the traditional business card is not going away. If I'm a small business and going to a networking opportunity, trade show or whatever, do I want to rely on a cell phone or technology for every potential lead? If I have a Blackberry version whatever and you have an iPhone, and they don't sync, and that was the one lead you couldn't afford to let get away, it's a failure. So isn't it worth the $10 investment in 250 business cards? To me, business cards that show you off creatively beyond the 2 X 3 ½ inches of paper are the best. So if that's including your Facebook page, Twitter handle, website, cell phone, it provides a rich media experience and an enormous amount of information that makes you stand out.
How have you evolved from a business card company to an "all-things marketing" company, as you put it?
One of the things I didn't realize early on was that the first thing people do when they're considering going into business for themselves is to get a business card. So as a leading indicator of pending formation, nothing is better. In 2004 and 2005, we realized that we had a goldmine of data in terms of selling all of these other products. So because we've created this franchise of small businesses who come to us for cards, we know when that business is in formation, we know what kind of design you prefer, your email, phone number and more and we have a head start on that customer relationship. So we're able to offer complementary and matching products based on the software we've built that will help take your business to the next level.
What it really comes down to is this: the cost of acquiring a customer is a fundamentally critical part of whether or not a business model works. If you look at our public figures, it costs about $22 to $25 to acquire a customer, and many of the statistics show it is seven to ten times as expensive to acquire as it is to retain a customer. So we want to do what we can to help existing users.
A few more general questions before I let you go: what are your principals on good management and leadership?
I think it really comes down to three things. The first is to hire great people. Once we got beyond 3-4 employees, it didn't matter how hard I worked, I needed good people on my team. Secondly, and this is as you get bigger, but it is vital to be clear internally about what your vision is, where you are going, what you will do, and more importantly what you won't do. That clarity of international communication becomes critical with growth. And lastly, it's strategy and thinking ahead. But by properly focusing on the first two elements, you'll help in defining a good strategy.
Particularly for your business, what have been the biggest benefits and challenges of globalization?
I think we are a case study on both the benefits and challenges. We have about 2,700 employees, 500 of which are in Boston, and everyone else in 12 different countries worldwide, including the Netherlands, Jamaica, Germany, Spain, Australia and more. As a business, I think one of the great challenges but opportunities is to think of the value chain of business, which we do all the time. So from a clean slate, where would you put a given component of the value chain if you want to be cost-competitive and provide the highest quality? Before the Internet, it had been extremely difficult across geographies. Today, we have manufacturing in three locations around the world-Canada, the Netherlands and Australia-to serve all of our customers. But the idea that one continent-wide production facility could serve all of that distance was incredible and nearly impossible to believe even 10 years ago. With the Internet and the ability to pull orders instantaneously, that is the death of distance between these different areas. That's why we can put manufacturing where it is most competitive. Technology has accelerated globalization to a really exciting place.
To learn more about Vistaprint, visit their website, follow them on Twitter @Vistaprint or "like" them on Facebook.