Focusing business and marketing strategies around colour is beginning to pay off for the document industry's leader, writes Karlin Lillington

How often does someone circulate a colour-enhanced document around your office? Perhaps with an image or colour pie graph, a set of figures set out in bright red, or key contact names highlighted in blue? Going by the statistics, probably not often - if ever. Only three per cent of the three trillion pages produced annually in businesses are done on colour devices.

But Xerox is betting that before too long, colour will be as commonplace in documents as it is on mobile phone screens.

"Colour is a very big part of our strategy," says Xerox chief executive Anne Mulcahy - so much so that the company now steers 70 per cent of its research budget into colour.

While few companies today are using colour, Xerox cites research that says by 2008, 10 per cent of documents will incorporate colour, representing a $22 billion (€17.11 billion) potential market. Market research firm InfoTrends predicts that colour devices in businesses will triple over the next three years.

But what really is making Xerox chirpy is that - predictions aside - the decision to focus its business and marketing strategies around colour four years ago (in a marketing push called 'Colour Everywhere') is paying off.

Colour products and services now account for 25 per cent of Xerox's total revenue, up from 16 per cent four years ago, says Mulcahy. In hard figures, colour revenue is up $1 billion, with colour now worth $4 billion annually to Xerox.

That kind of growth led Xerox to launch what Mulcahy calls phase two of the colour strategy in San Francisco last week, complete with brightly dressed tumbling and juggling circus performers.

In some ways the event was simply a glorified product launch for a new, low cost solid ink combination printer, scanner and fax called the C2424 which, at $3,000, brings some cutting edge print technology to the small and medium enterprise (SME) market.

But Mulcahy clearly saw the launch as a chance for the company to push a larger colour agenda to press and customers - what she calls "not a colour revolution, but a steady colour evolution".

The front line for Xerox seems to be its solid ink technology, which executives said would most likely remain a major research and business focus for Xerox.

Bringing a printer like the C2424 to the market means Xerox can go after the huge SME sector that might not have thought in the past about using colour or a multifunction printer.

At the launch, Xerox gave plenty of profile to the little guys, focusing almost entirely on customers that run small businesses - tanning salons for example - that have had trackable successes using colour in advertising campaigns.

Colour documents sell up to 80 per cent more effectively than black and white. Brands are identified 70 per cent more effectively when colour is added, and recall is increased by 60 per cent when colour is used, according to research cited by Mulcahy.

She believes that colour, coupled with the ability to personalize documents, is an "absolutely powerful" combination that will help pad Xerox's bottom line. Drawing on customer information databases, documents can now be personalised to such an extent that an entire print run of heating bills could have an offer tailored specially for each individual customer, the company said.

Colour also costs about 10 times more per document than black and white - 10 cents per page as opposed to one cent, says Ursula Burns, president, Xerox Document Systems and Solutions Group. "Colour is more expensive, but for some kinds of applications, it's a differentiator," she says.

Some markets are already moving readily to colour, Mulcahy notes. For example, European businesses seem more willing to be colourful than their American counterparts - businesses are adopting colour in the office at a faster pace, she said.

Xerox's back office and services operations in Ballycoolin, Dublin have a role in the company's colour strategy, Mulcahy says.

"There's no specific manufacturing around this area in Ireland, but all support will come from the Dublin operation so this will be very much integrated into the current structure we have in Ballycoolin," she says.

She also says she believes Xerox has "stabilised" and does not expect further job cuts in the near future, after several rounds of rationalisations in the past. Xerox would need to hire more expertise to support its colour strategy, she says.