Be a matchmaker
Gerhardt says Allegra is the eHarmony of the graphic arts business.
While Allegra can’t find you true love, if you’re an independent printing company, there is a good chance Allegra’s matchmaker program
can find you a buyer.
The program, started shortly after Gerhardt became the company’s president in 2004, is aimed at finding new franchises and franchisees to operate under the Allegra umbrella. The company’s
leaders started the program because, in a nutshell, it’s easier to
purchase franchises than to start them from scratch.
“Since this is a mature industry, rather than opening up franchises in
new markets, we needed to look for a way to acquire independent
print setters into our system,” Gerhardt says. “We tried to do that by
having them join our franchise, but that was not successful because
they basically didn’t want to pay us royalties.
“So what we did was come up with another concept to bring in a
buyer from corporate America looking to buy a business, match them
up with an independent printer to buy, convert it into Allegra, then
take our systems and put them into place.”
From its testing phase in 2004 and 2005, the program has now
become the company’s primary external growth engine, bringing
approximately 40 independent printers into the Allegra system
since the program’s inception.
To find independent printing companies looking to sell, Allegra began a marketing strategy that includes direct mailings, telemarketing and acquisition development managers — staff members
who take leads from the company’s marketing department, screen
them and attempt to find buyer matches in the independent printing company’s local market.
The matchmaker program has required an increased commitment
to franchise development from Allegra. The company’s development
department now employs eight. Four years ago, the company
employed two acquisition development managers. But Gerhardt says
that when the company can acquire an established printer with an
instant revenue stream, the investment pays off.
The investment also pays off in the form of a heightened reputation.
“Because of this, we’ve become somewhat known in our industry for this (matchmaker program) now,” Gerhardt says. “If you’re
an independent printer looking for an exit strategy, you probably
now know that Allegra Network can provide you with that exit
strategy.”
Allegra’s matchmaker program has become a sustained success due
to the company’s ability to stay close to the markets it serves.
Gerhardt says that for any growth initiative to take root, your company has to stay close to the market.
“It’s critical that you understand the dynamics of the market you are
playing in,” he says. “We had to understand that this is a maturing and
consolidating industry. In that case, if you try to grow by adding new
franchises as we did in our earlier years, you will not be successful. So
you need to gain an understanding of the industry you are in, then create a strategic plan that fits your industry.”
Understanding your industry also means understanding your own
best practices that will maximize your growth potential. Allegra has
created a program called “profit mastery.” The program teaches franchisees to run their franchises for maximum profitability, but as part
of the program, about 60 percent of the company’s franchisees participate in performance groups twice a year. The peer groups are composed of about six owners who meet twice a year. In the meetings, the
franchisees bounce ideas off of each other and inform management
as to what is going on in their markets.
“They basically serve as each other’s board of directors,”
Gerhardt says. “Our staff members facilitate those meetings, and it
becomes a very important source of input as to what is succeeding and what is not succeeding in the marketplace. From there, we
kind of bubble it up through the corporate staff. That helps us stay
really close to what is working and what is not working with our
franchise members.”
To paint an accurate overall picture of what is happening in the markets and the best places in which to seek growth, Gerhardt and his
management team combine the information received from the performance groups with what they learn during industry conventions
and regional meetings.
