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Commentary & Analysis

Three Types of Personalization

by Heidi Tolliver-

By WhatTheyThink Staff
Published: September 20, 2004

by Heidi Tolliver-Nigro These applications create a sense of relevance without the complexity and time associated with traditional variable data printing. September 20, 2004 -- Last month, I said the definition of “personalization” has now broadened to include three non-traditional but growing applications: decentralized customization, one-off personalization, and functional VDP. This month, I will discuss an example of each. Decentralized Customization I'll start off with decentralized customization. What I like about these applications is that they create a sense of relevance without the complexity and time associated with traditional variable data printing. They create this relevance in different ways, of course, but it's relevance just the same. And once the application is set up, it happens with the click of a mouse, not months of planning. I remember writing about these applications when they were first introduced a few years back. At the time, they were being offered only through software developers like JG Sullivan Interactive. Today, these solutions are used primarily by end users and hard-core VDP printers are developing their own solutions, whether from scratch or based on the rendering software of companies like XMPie, PageFlex, and Sapio. More simplified solutions are available from companies like Printable.com, and while they don't have the complexity or flexibility of the more expensive versions, they get the point across and get printers' -- and customers' -- feet wet and help them develop a familiarity with relevance that will serve this industry well. One of the major players in this market is Royal Impressions, a Manhattan-based digital printer and marketing services firm, with its proprietary M-COM (Marketing Collateral Order Management) System. It recently contracted with AIG SunAmerica to develop an application called MyFinancialDesk.com based on AIG's original “My Financial Desk” newsletters. With MyFinancialDesk.com, AIG makes its newsletter templates, complete with editorial, available to its financial advisors to be personalized online. MyFinancialDesk.com To use the service, the advisors log in, upload their headshot, company logo, and digital signature to create the customized newsletter. These orders are downloaded by Royal Impressions on a weekly basis and printed. They can either be bulk mailed to the advisor's office or printed and mailed through Royal Impressions' print-and-mail service, saving the advisor the time spent addressing and stuffing envelopes. Advisors pay for the service by credit card right on the site. Currently, AIG has 8,000-9,000 independent financial advisors, with approximately 300 clients each. This leads to the potential for 300,000 customized newsletters to be mailed per quarter. Over time, AIG plans to build on this application by allowing financial advisors, not just to customize the newsletter to their individual offices, but also to their customer base by selecting the articles most appropriate to those customers. (For example, articles focused on saving for a child's education or planning for retirement.) It also plans to allow financial advisors to order a wide variety of customer-building tools, including holiday cards, proposals, and other documents, such as prospecting postcards. It even plans to add e-mail capability. AIG is in the process of launching a similar campaign to customizing postcards, called RoyalAlliance, which will allow clients to customize the text, as well. Decentralized customization is a growing application in this industry, particular for printers servicing large corporate clients with many affiliates. While it is not a competitor to traditional VDP, it is a fast-growing application that both VDP printers and non-VDP printers should watch. One-off personalization Another application growing in popularity is one-off personalization. This technique has been used by companies ranging from home appliance manufacturers to family resorts to automotive dealers to follow up on customer inquiries and close the sale. VDP isn't always sexy. Sometimes it's merely functional. Take the example of the Carolina Ford Dealership Association. Based on a study done by Ford Motor Company, which found 48 hours to be the "critical window" in which to close the sale after a customer's visit to a showroom, the association developed a campaign to follow up with prospects within this time frame. Its solution was to create a direct mail piece that was personalized to each prospect based on the information obtained during that visit. Salespeople enter information into a database on a daily basis and printed pieces are mailed out to them within 24 hours. Now, within 48 hours of visiting the dealership, these prospects received a personalized brochure based on their interests, along with a special incentive to come back and buy. This program has been running for over two years, with an average of 200 personalized pieces generated per day. The response rate ranges from 10–13 percent, with 7–9 percent of recipients coming back to the dealership to make a purchase. Such applications are becoming more common. Most marketers, however, see them as a competitive differentiator, so few are talking about it openly. But rest assured -- the biggies are doing it. Functional VDP VDP isn't always sexy. Sometimes it's merely functional. For example, it can be more cost-effective to print addresses on mailers in a one-step process than to print the pieces and inkjet address them off-line. There are digital printers--especially small printers--making money from these applications all the time. Not sexy. But profitable. The more effort the recipient has to put into something, the more likely it is they'll forget to do it. Another example is pre-filled reply cards. There is an application that is promoted frequently in discussions of VDP that comes from Canadian Direct Marketing News. This trade publication needed a way to market its seminars and educational programs. The goal was to "stand out from the crowd," so it decided to test a VDP campaign, personalizing half of the mailing. The solution was to create a piece that included a personal note to the recipient and a completed return form to enable a simple registration process. The organization achieved a 28 percent higher response rate and 65 percent of the attendees enrolled from the personalized mail, while only 28 percent enrolled from the direct mail. This program was hailed as a great success for personalization. But was it really a success for personalization? Or something else? There are a number of applications out there in which there is no personalization involved except to pre-fill the reply card and response rates still go up. Why? Because the more effort the recipient has to put into something, the more likely it is they'll forget to do it. But if they can rip out a card and send it in, that's no sweat. In this case, the front and back of the mailer featured personal notes to the recipient, giving them the benefits of the seminar. The inside spread also included a registration form pre- printed with the recipient's name, address, and other relevant information; and the mailing address for registration was already on the outside of the form. This allowed the recipient to simply check off a few boxes and put the form in the mail. So was the higher response rate really due to the personalized note? Or to the expedience of not having to fill out lots of paperwork? Just Part of the Toolbox Good VDP printers now understand that personalization is simply a tool, and it's not always the best tool. When you are building a house, sometimes you use a hammer. Sometimes you use a screwdriver. And sometimes you use rivets. It's all part of the larger concept called "construction." Likewise with VDP. Sometimes you use rule-driven VDP. Sometimes you use decentralized customization or one-off personalization. And sometimes, even, you use targeted short-run customization without any personalization at all. It's all part of the larger concept called "creating relevance in printed communications." Good VDP printers now understand that personalization is simply a tool, and it's not always the best tool. Ultimately, that's a balancing act between the available resources, the goals of the customer, the budget, and the likely response rates in a given situation. That's what separates those who "get" VDP from those who don't. It's all about strategy and picking the right tool for the job. It used to be about resources -- IT departments, software developers, database management, and the like. And those things are still critical. But just having those things isn't enough. Those are just tools. Building a long-term success strategy and track record with clients is knowing how to use them. Next month, I'll take a look at some of the top VDP applications of OnDemand Journal's readership. I've had an overwhelming response to this column, with printers eager to share insights into their own experiences. Next month, I'll start sharing some of them.



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