Commentary & Analysis
Burgeoning 'Do Not Call' List Presents Opportunity for Printers
By Tom Wetjen More than half the printers surveyed by NAPL cited direct mail and direct marketing for above average growth.
By WhatTheyThink Staff
Published: February 14, 2005
By Tom Wetjen More than half the printers surveyed by NAPL cited direct mail and direct marketing for above average growth. It was the only category that topped 50 percent. February 14, 2005 -- A new wave of legislation restricting the ways marketers can contact customers and prospects has narrowed -- some would say, dramatically narrowed -- the direct marketer's playing field. Yet as consumers increasingly gain protection against unwanted direct marketing solicitations, personalized print on demand gains favor. In 2003, the Federal Communications Commission (FCC) created a national do-not-call registry. By late last year, 64 million phone numbers were listed, making them ineligible for solicitations from commercial telemarketers. (See box.) Already these laws have been cited in the closings of numerous telemarketing operations. Also, since 2003, the FCC has enforced a stricter reading of laws against unsolicited faxes, permitting them only when the recipient has granted permission. And the Federal Trade Commission has investigated ways to control unsolicited e-mail under authority of the CAN SPAM act. Through legislation like this, consumers are making clear what they don't want. A recent survey of 316 consumers by Weymouth, Mass.-based market-research firm InfoTrends/CAP Ventures asked them what they do want. A whopping 69 percent claim to prefer being contacted for marketing purposes by direct mail. No other medium was close, with email registering 28 percent and telemarketing at 3 percent. Direct marketers seem to be getting the message. "The legislation has made marketers look more closely at what's available in print alternatives, and there's much more interest in the added value of digital print," says John Burke, information technology manager with San Diego-based Anderson Direct. This value-added direct mail uses personalized images as well as text, produced in high-quality color, to deliver above average response rates -- and a strategic opportunity to transform the business. The New Direct Mail Opportunity Anderson Direct is among the leaders in using digital color printing for direct mail. Digital printing has helped the direct marketer return to its historic double-digital growth levels after experience flat revenue growth during the economic downturn at the turn of the century. " People thought the Internet and digitalization of communications would lead to less paper-based traditional direct marketing activity. that hasn't happened. We've increased our digital services by double digits annually in recent years, while our print output has increased significantly." -- Ron Arellano, The Hibbert Group They are not alone. More than half the printers surveyed in 2003 by the National Association for Printing Leadership (NAPL) on the growth potential of their primary markets, cited direct mail and direct marketing for above average growth. It was the only category that topped 50 percent. "The majority opinion is that direct mail will benefit from the no-call bill for telemarketers and proposed laws on junk mail faxing," the NAPL reported. The report went on to suggest that pieces printed digitally will have an advantage. "As the economy improves and business confidence rises, there will be competition to communicate quickly," the report stated. Digital printing's turnaround advantage over offset --' due to fewer make-ready requirements --' is well documented. More critically, digital printing's economical short runs enable rapid, highly effective concept testing. Such testing is the most valuable benefit of a digital-printing-based communications program run for AutoNation, Inc., the largest automotive retailer in the United States, by DME, a Daytona, Fla.-based full-service direct marketing firm, according to Scott Zientarski, the firm's director of Customer Relationship Management. He cited a recent test that uncovered "a new silver bullet" for new car promotions that subsequently returned $108,000 in sales on a $6,800 mailing that yielded a return-on-investment ratio of more than 15 to 1. Adding Value with Digital Color According to the NAPL survey, meeting demand for such value-added services represents the most critical issue facing printers of direct marketing materials, cited by 57 percent. Other value-added services include easy integration with Web-based communications and databases, and the capability to personalize high-quality pieces. A landmark study by Frank Romano and David Broudy found that adding the recipient's name to a document increases response rates by 44 percent, and that adding color had an even greater impact. Color documents that included the recipient's name generated a 135 percent improvement in response rates; the same documents with personalized content boosted response rates by 500 percent. "Several years ago, people thought the Internet and digitalization of communications would lead to less paper-based traditional direct marketing activity," says Ron Arellano, senior vice president of Operations, The Hibbert Group, a comprehensive marketing services company based in Trenton, N.J. "But that hasn't happened. We've increased our digital services by double digits annually in recent years, while our print output has increased significantly." Growth in digital color has been especially dramatic, he says. "As new technologies have allowed digital color to be more cost effective, more customers are trying it." Personalizing Across Media "We have incredible information, and we keep getting smarter and our mail keeps getting smarter" -- Mike Panaggio, DME Many of today's most successful direct marketing campaigns make use of direct mail as one of several media that work together to optimize response rates. At The Hibbert Group, digital media are providing faster time to market, new channels that can increase "touches" of target consumers relatively inconspicuously, and new communications alternatives that some consumers prefer, according to Arellano. But, particularly in light of new laws, they are creating new challenges for tracking customer "opt-in or opt-out" preferences in databases, to ensure they don't violate privacy or security laws, Arellano notes. "The Do-Not-Call list means our customers need to be more serious about their internal database," says Mike Panaggio, chief executive officer of DME, which integrates telephony, broadcast audio, email and creative services into its direct marketing programs. "They can't just use the phone to find new customers, they have to work with their current customers or prospects who didn't buy." Getting more serious about the internal database has other benefits, too. For example, DME builds a tracking or feedback device into every communications piece, to understand what is working in near real time, while building knowledge about the client customer base that can help future programs be more successful. "We have incredible information, and we keep getting smarter and our mail keeps getting smarter", Panaggio says. Through DME's workflow systems, that information is available for incorporation into a variety of communications. Software from XMPie integrates design logic and data across multiple media. Designers can use their favorite software to, for example, create personalized response Web sites on the fly during printing, on any of the firm's digital production presses, which, in turn, print an associated personalized URL for each recipient. "It's a great marketing tool, and we're having great success with it," Panaggio says. Turning Bills Into Marketing Tools Re-designed bills and statements often pay for themselves. Consolidating marketing content with statements can cut both production and postage costs, and improved readability can cut down on phone queries. The beauty of digital printing --' the reason it fits so well into today's direct marketing environment --' is that it not only plays a central role in improving the most sophisticated, fully budgeted cross-media programs, it also enables extremely cost-effective direct marketing on a shoestring. A rich area that many enterprises are exploring today is bills and statements, which are gaining higher profiles as one-to-one marketing communications vehicles. For direct marketers, bills and statements offer this Holy Grail: they are the only mailings that recipients are practically guaranteed to open. So why limit content to the numbers? The economics and print quality of today's digital color presses enables inserts --'automatically trashed by many --' to be personalized and incorporated into bills and statements, improving the chance they will be read. Further, re-designed bills and statements often pay for themselves. Consolidating marketing content with statements can cut both production and postage costs, and improved readability can cut down on phone queries. For example, UMassFIVE College Federal Credit Union recently worked with Rome, N.Y-based Cathedral Corporation to redesign its member statement for production on two-color laser printers. The new statements consolidate several other marketing vehicles into one, more readable document, reducing postage costs and phone queries while improving member satisfaction. The new statement also plays a strategic role, enabling the credit union to vary marketing and administrative messages among member groups. The improved one-to-one messaging supports a new affinity group for the largest account holders that has helped raise the number of members who count the credit union as their primary financial institution by 16 percent. "We did this to improve the member experience, and we have accomplished that and more," says Jon Reske, the credit union's vice president of marketing. Don't Call, Print Today, marketers have more methods to solicit consumers than ever in history. The broader sales palette is a double-edged sword, however, for many consumers have developed and expressed clear preferences in the way marketers approach them --' preferences that are increasingly enforced by law. Today's advanced digital color printing plays well in this environment, meeting consumer preferences for non-intrusive solicitations, while giving direct marketers unlimited personalization capabilities and no-excuses color image quality to get and hold consumers' attention.