The Specialty Printer
Service Litho-Print considers itself more of a marketing company than a printer.
by Steve Prestegard
Some companies are content with doing exactly what their customers want, and if their customers don't ask for it, they won't get it.
Some companies push the envelope with their customers, deciding instead to guide them in directions they feel will benefit their customers more than their original choices.
Count Service Litho-Print of Oshkosh in the latter category. Owners Steve Elbing and Scott Thoe have turned a relatively conventional printer into one of Northeast Wisconsin's most innovative printing companies, both in what they offer customers and in the way they have grown meeting customers' needs into creating Service Litho's own proprietary products.
"Basically, we've had a hard time saying no for the past 15 years," says Thoe, the company's president. "Initially, the paper companies pushed us, because the paper companies were looking for unique things to do with their paper. That's how we got into foil and foil stamping and die-cutting. Then they asked, well, can you print over your foil? Then they asked, well, can you print on your foil?
"We're creating partnerships with our vendors, and trying to get ahead of the game when they start designing something. We try to become a marketing arm of [their customers], not just their printer."
"I'd like to say that we've been bright enough to develop these products," says Elbing, the company's CEO. "But it's really been driven by our customers. They ask if it can be done. "We've really differentiated ourselves - customers tell us, You guys aren't a printing company; you do so much more. Most printers will take their customers' requirements, and give them what they ask. We go beyond that."
Elbing says much of the company's innovation comes from "having outside resources that we challenge."
One example of the company's innovation is its Ex-Static decal. The product, used in Point of Purchase advertising by such brands as Dr. Pepper, Pepsi and Pizza Hut, bridges the gap between adhesive-backed decals, which tend to leave a residue when removed, and static-cling decals, which don't stick to every surface.
Thoe says Ex-Static is the "only product guaranteed not to leave residue over two years. The real bottom line is that if our product is guaranteed for two years, and if the competitor won't guarantee it for two weeks, which product do you want to use?" Another example is the amount of work Service Litho does with lenticular printing, which gives a three-dimensional appearance to two-dimensional printing by using sheets of polymer with dots on them to create images that stand out over other images or move as someone moves the printed piece.
"We have been told by customers and competitors and suppliers that we're the best lenticular printer in the whole world," says Thoe.
Elbing and Thoe came to Service Litho from CastlePierce Printing in Oshkosh, as did Service Litho's founder and Elbing's first partner at Service Litho. Elbing and Thoe were partners in a marketing company that was selling board games. Service Litho had two facilities, in Oshkosh and in Appleton (the former Acme Press). Elbing initially purchased half of the company in 1985, and he hired Thoe, who bought into the company in 1991.
The purchase occurred just as Service Litho had purchased a four-color press. (A full-color image, such as on the cover of Marketplace, involves combinations of four inks - cyan, or sky blue; yellow; magenta, or reddish-purple; and black.) Their former employer was the first company to print the question cards for Trivial Pursuit, the 1980s board game.
"There are way too many printing presses in the Fox River Valley," says Thoe. "A lot of companies, including this one, put in new four-color presses to deal with the Trivial Pursuit business. When that dried up, we asked, now what are we going to do?"
"Service Litho was caught not knowing how to sell it, not being able to run it real well," says Elbing. "And that was about the time we came on board. It was a good company; it had a good reputation. They did a lot of smaller-type work; Acme Press did all of Kimberly-Clark's embossed business cards and letterheads."
"We wanted to take the company in a different direction," says Thoe. "Steve decided to build a new culture as far as a new management style - take away the hierarchy, and take some fat out of the management layering, and put trust back into the people who are running the company, and then find a unique niche and market the company. We're much bigger now in the U.S. marketplace than we are facility-wise."
"We ask customers the question, Did you have any mental image of Service Litho when you came here," says Elbing. "And we hear that your presence in the market is much larger than your physical presence. There are other printing companies that have twice the space we have, but we have more sales."
To hear Thoe tell it, Service Litho innovates not only because Elbing and Thoe want it to, but because the company has to innovate given its nearby competition. The company did more than $16 million in sales in 2000.
"This is one of the largest printing hubs in the country, no question about it," says Thoe. "With technology and the nature of the business, there are a lot of good printing businesses in the Valley. So we had to differentiate ourselves.
"In a majority of the time, we're middle-range in price, but we're at the top in value because of the tangibles and the intangibles we bring. In the niches we are in, we are competitive, and a lot of time we are the low-cost provider. But we're the low-cost provider because we specialize in that niche, not because we drop our price. We make good margins as the low-cost provider. We look at what's the total cost for getting the results you want, not what is the cost of printing your next piece."
"If you don't differentiate yourself, the price is the only thing customers can choose from," says Elbing. "Where we're most successful is when we become an extension of our customer's marketing department or promotions department."
That has literally been the case with Dr. Pepper. Service Litho exhibited with the company at a trade show in Maui, Hawaii last year. The company also researched its work for Dr. Pepper by talking to Dr. Pepper bottlers, to see what display approaches they thought would increase sales.
"We bring more than just printing," says Elbing. "We bring additional customers; we'll go to a customer and say, Here's a company you could be working with. Networking opportunities is what we do. Our customers teach us, and if we see value, we'll teach other customers." Ex-Static was created because, says Thoe, "We found the best plastic people and the best adhesive people and created a partnership. We've spent a lot of money for research and development for a small company over the past 15 years."
"The ingredients you can buy anywhere," says Elbing. "It's the recipe - how to get the right affinity of adhesive and vinyl it goes into so it performs.
"The term we use is 'jazzy.' In any business environment, there's a lot of stress, a lot of risk, a lot of challenges. But we are jazzed by what we do. Some of our work days, we're having as much fun as anyone else."
Service Litho's partner in Ex-Static is 3M, which offers Post-It notes for, for instance, coupons, attached to an Ex-Static back card.
"We are challenged by some customers, and we didn't know 3M was coming out with their own product," says Elbing, who describes Service Litho as a "catalyst." "We challenge ourselves to do paradigm shifts."
"We might have developed the base materials, and know how to print it and shape it in different shapes, and the marketing managers come out with new uses for it," says Thoe. Another example is Free Stick, which also sticks to places static cling decals cannot, including refrigerators and freezers, glass, store counter mats and in-store displays. Free Stick can include print on both sides, and writing on it can be written off. Another product, Palite, can be used with backlit displays or store windows. A related product is FloorArt, a decal attached to a floor for advertising purposes.
The company's move into POP displays earned it gold, silver and bronze awards in Dr. Pepper displays - a gold for a 3-D ceiling-mounted display, a silver for a push/pull door sign, and a bronze for a Free Stick 3-D cooler decal - from the P-O-P Times Design of the Times 2000 Awards.
Printing on foils and plastics got the company into using ultraviolet ink, which sticks to the printing surface better, dries faster, lasts longer and is more fade-resistant. The company now has two six-unit presses that print with ultraviolet ink, plus one four-color press that uses conventional ink.
Service Litho also has an Indigo short-run digital color press. Two other Northeast Wisconsin printers introduced the press to Northeast Wisconsin in 1995 ("Short runs with color," Marketplace, May 23, 1995), but Service Litho's press does something the one other press (the other company has closed) didn't - print on materials other than paper. "It had to print synthetic substrates, so we challenged Indigo to do that," says Elbing.
Service Litho also contributed to Great Britain's Millennium Dome by working with Lenticular Corp. of Sun Prairie to design 88,000 panels covering seven-story male and female statues. "For us, it was a unique opportunity because someone researching over the world looking for a good lenticular supplier found us," says Elbing. "For us, it was quite gratifying."
Service Litho runs two presses 24 hours a day to fill customer orders. The company calls its employees "associates," which is not rare. What is rare is the longevity of the company's 82 employees, and the number of employees who leave Service Litho and then return later. The company had a choice of 70 applicants, including one company president, for a recent human resources position.
Service Litho's attitude toward its associates and its customers may be typified best by the smashed time clock posted on the wall of the company's Oshkosh North Industrial Park plant. "Steve and I didn't grow this company in the last 15 years; all our associates did," says Thoe. "Steve has a statement - we thrive on chaos - which our managers don't always appreciate. There's a good core group of people that have been here longer than we have. We've had people leave and come back. A lot of feedback we were getting [on the HR position search] was, We've heard so much about how nice your company is.
"You create an environment where you challenge the associates to do something new. You show them that we're spending money to do something new, and it's acceptable if it fails." "My goal is to get information in everybody's hands, and we're focused, and we work, on common goals," says Elbing. "Every individual in this company has individual goals that support the goals of their department, and departmental goals support our strategic goals. Ownership creates empowerment.
"As CEO, I'm working on the business; Scott's working in the business. I'm the visionary, so to speak, and Scott has the short-term view."
An executive committee of Service Litho associates oversees sales and production areas. The company also has an outside advisory board made up of people running other companies.
"We spend a lot of money on bringing in outside people for an outside perspective," says Elbing. "We've had industry experts in here, and we'll tell our philosophy - the time clock, etc., etc. - and we like the compliment, but to us it's just good common sense. And we try to get across that our associates don't work for Scott and I, they work for our customers. If they meet all their needs, then our needs will be met."
One initiative employees managed to talk Elbing and Thoe out of was changing the name from Service Litho-Print to a company name that goes beyond printing.
Thoe expects the company to get into flexographic printing and silkscreen printing in the future. He also expects the company to grow by acquisition, as in its March 1999 acquisition of the Point of Purchase Division of Visual Systems in Milwaukee - even acquisitions of companies larger than Service Litho. The purchase got Service Litho into the Point of Sale market.
"There was great synergy there," says Thoe, pointing to the division's expertise in printing heavier-gauge plastics. "All the way along, it just looked too good not to do."
"We look at companies that don't exactly do what we do," says Elbing, who focuses on technology, new markets and the employees they would inherit.
Elbing and Thoe believe the next big display placement opportunity is the backs of doors in doctors' examining rooms, to reach captive audiences between the time they walk into the room and when the doctor finally arrives.
Elbing is unconcerned about the notion that computers and the Internet might supplant common forms of printing, even though, for instance, computer owners now can print letterhead with what they might consider acceptable quality.
"Actually, the Web augments what we do," he says. "We do have some products that can sell on the Web, because we do sell some products to retailers. In our marketplace, because of what we do, we feel it's niche-oriented, and people have a need for what we do.
"If we just did stationery, we'd be in trouble. But the type of machinery in house - like foil, stamping and embossing - there's nothing in the [technology pipeline] where companies can do that. The type of thing we're doing, not just today, is to come up with unique products for printed materials that support marketing promotion or the retail direction of our customers. We're a marketer first and a printer second in most cases. We're looking to them and finding out what their needs are and finding ways to market those. And because of our culture, we're going to continue to come up with the next best mousetrap."
Scott Thoe (left) and Steve Elbing, owners of Service Litho-Print in Oshkosh, are pictured with samples of the company's unique printing work, some of which has been developed into proprietary products.
One of Service Litho's proprietary products is Floor Art, which extends the advertising environment to the floor. Retailers were surprised to find that ads customers walked over proved effective, according to Service Litho.