By Barbara Pellow Millions of years of evolution have hardwired into our brains a predisposition and attraction for color. January 31, 2005 -- 2005 promises to be an exciting time in the world of graphic communications. For years, industry pundits have waxed eloquently about the fact that digital technology was going to take off. Having spent the last several months with marketers, digital service providers, software developers and equipment manufacturers, it appears to me that this could actually be the year where the stars are aligned for digital. There are six critical market trends I see converging this year. In this two-part article, I will share my perspective as well as the views of an array of printers--or what I now categorize as "graphic communications service providers"--in today's market. The trends I will be discussing are: Part One: More focus on color Increased re-engineering of business applications Demand for ROI on marketing investments Part Two: Heavy emphasis on being a full service provider New pricing models and new products A focus on efficient workflow Focus on Color First, there is a much stronger focus on the delivery of information in color as digital print technology expands and color quality improves. Millions of years of evolution have hardwired into our brains a predisposition and attraction for color. Marketers are realizing that to evoke the appropriate reaction, color is critical. It helps influence, motivate and inspire, and it just plain looks a lot better than black and white when it comes to the printed page. To enhance readability and response, color is being rapidly integrated into both business-to-business and business-to-consumer communications ranging from direct mail coupons and special offers and promotions, to transactional documents such as statements, bills and trade confirmations. Another major trend is re-engineering traditional business applications to take advantage of new technologies. The Principal Financial Group, headquartered in Des Moines Iowa, is a leading global financial services company providing a wide array of offerings to more than 13 million businesses, institutions and individual clients. When describing the value of color, Tom Reed, Director of Documentation for Publication Services, said, "As a financial services company, what we produce is documentation. 401K statements are our highest volume digital color application. People's financial retirement plans are very important to them, but at the same time they are very complex. We look for ways to make the status of their retirement plans easy to understand. By incorporating color graphics, it just makes the presentation more compelling." Reed also notes, "The other reason color is important is that we use the statement as a marketing piece. Color is essential to the marketing function." Application Re-engineering The next major market trend we are seeing is the re-engineering of traditional business applications to take advantage of new technologies. A key area of focus is the ways marketing and sales support materials are produced and delivered. Firms are migrating to Web-to-POD programs that allow users to insert customized data into sales materials using Web-enabled template-based software. While there are a variety of technology options available, the concept is to provide a powerful tool that allows local and regional sales executives to quickly create targeted, cost-effective advertisements and promotional pieces. Marketing materials that used to take months to create can now be developed in a matter of days at a fraction of the cost--putting content control in the hands of the local sales resource while still protecting brand integrity. Owner of Schaumburg, Illinois-based RT Associates Bob Radzis agrees that one of the best ways to add value and transform business ideas into measurable customer results is through Web-to-print applications. Radzis says, "About a year and a half ago, one of our best customers, United Stationers, decided to work with us on an application that we call AMT, Automated Marketing Tool. The idea was to enable their dealers to go on the Web and select one of over 300 templates that are available for specific marketing applications, whether it's new customer acquisition or customer resuscitation, or maybe a price comparison brochure. They select the application and upload a database, so variable data is a key part of the offering. The remote distributor builds a customized piece online that gives them ownership over it. They submit the order, and three days later the piece is in the mail." Marketers are looking at the market in terms of both improved response rates and time to cash collection. While the application could run on other digital presses, RT Associates uses a NexPress 2100 equipped with a fifth station to apply DigiGloss and DigiCoat. The coating makes the pieces look better and provides some protection from some of the wear and tear mail pieces are subjected to. At the end of the day, it is an application that makes everyone happy--from United Stationers, to the dealer and RT Associates. The concept of application re-engineering has even an had impact on the large format market. 291 Digital, located in downtown Manhattan, occupies more than 100,000 square feet of production space and serves 2,500 clients. Employing 160 people, 291 Digital operates 24 hours a day to meet the needs of the high-end retail and advertising community in the New York City market. 291 Digital's portfolio of offerings includes everything from sheet-fed printing to very high-end Madison Avenue-type retouching. According to 291 President Mark Wenger, "We fulfill hundreds of ads to publications all over the world every day. We serve very large retail chains -- Burberry, Polo, Calvin Klein, Chanel -- with a wide range of services. And our niche is that we are a true full-service facility, all under one roof." He emphasized that the signage market is changing as well. "Most people look at variable data these days just as a selling tool for print on demand, but we take a broader view. We did a very large sign application for a major credit card company. It was an international campaign where even though the graphics--two- or three-sheet posters or backlits--might have been the same size for different venues around the world, each one was personalized to the specific venue. What the graphic did, with an arrow, was point you to the nearest ATM. This is a job that might have come through as 500 standard-size backlit signs, but because of the different arrows and locations, it needed to have variable data, and actually came through as 10 each of 50 different signs." Wenger also indicated that a similar situation exists for malls and bus shelters where signage needs to be modified to tell patrons where the nearest Starbucks, Macy's or Bloomingdales is located. While the images may be constant, the data will change from location to location. Measuring ROI A job that might have come through as 500 standard-size backlit signs actually came through as 10 each of 50 different signs. Third, marketers are getting smarter and demanding a return on the investment of their marketing dollar. They are looking at the market in terms of both improved response rates and "time to cash collection." Historically, a response rate of one percent was cause for celebration. Two to three percent was cause to break out the champagne. With renewed focus on customer relationship management and data driven marketing these low response rates are no longer acceptable. United Stationers Market Development Manager, Megan Klump, indicates tremendous satisfaction with the utilization of the Automated Marketing Tool from RT Associates. According to Klump, "Response rates have been as high as 35% -- a remarkable result by any standard. One dealer reported spending $113 to create and distribute 100 customized mailings, which generated 24 orders and $3,500 in sales. In another case, 50 personalized pieces were sent to inactive accounts; after three days, the sales team follow-up calls yielded $1,000 in new orders and 28 requests for catalogs." In another example, John Deere developed a 1:1 campaign designed to increase the number of professional landscapers using John Deere financing options. Lauren Murzinski, Manager of Direct Response Marketing for John Deere's Worldwide Commercial and Consumer Equipment Division, indicated that the campaign was 86% more effective and the cost of administering the mailings was cut by 60%. She said, "This could not be achieved without the variable data capabilities of digital color printing." Watch for Part Two of this series to read about three more converging trends in digital transformation.