Commentary & Analysis
Can Name and Address Boost Response Rates?
by Heidi Tolliver-
By WhatTheyThink Staff
Published: September 28, 2005
by Heidi Tolliver-Nigro August 28, 2005 -- There has been an interesting boomerang in the variable data printing industry. When variable data printing was first introduced, the primary examples of this technique were very simple. They used the name of the person and, perhaps, varied the images based on gender or location. Within a few years, however, conventional wisdom was that this type of personalization --basically, a glorified Publisher's Clearinghouse approach-- wasn't effective. At least, it wasn't effective enough to consistently produce the types of response rates that justify the front-end expense of producing a VDP campaign. Few printers--or their customers--could handle jobs requiring data mining techniques. Instead, the industry began to focus on more sophisticated techniques, such as personalizing documents based on customers' past purchase patterns or forecasted spending behavior. The buzzword was "data mining." The problem was, few printers could manage jobs at this level of sophistication and few customers had the depth of data to produce them. These types of jobs were also more expensive. So it removed VDP from the toolboxes of all but the largest companies with the deepest pockets and the most sophisticated databases. During this period, VDP stalled. A few sophisticated marketers began quietly churning out very sophisticated, highly effective VDP campaigns and making lots of money with them. But the rest of the industry lagged far behind. Return to Simplicity An increasing number of "VDP" applications are really Web-to-print. Within the last two years or so, we have seen a surge in newcomers to the VDP environment. In part, it's because of a concerted effort by digital press suppliers to help their customers develop applications and create new business models based on consultative selling and business development strategies. But it's also due to a shift in the types of applications being produced. They are a lot easier. In part, an increasing number of "VDP" applications are really Web-to-print. Online portals, where customers can view, customize, and order printed documents, including one-off documents used for sales follow-ups, are becoming an extremely important part of the VDP equation. But we are also seeing a rise in full-color 1:1 personalization. What's interesting about these applications, however, is that the level of personalization is returning to the simpler days of varying primarily name and address, perhaps with an image swap or two. Consequently, more printers and their customers are able to get involved in variable data printing, and yet, they are also being successful with it. What's Different? What's the difference between a decade ago and now? Why did these applications not work then, but do today? First, many of these pieces are not intended to be the sole or primary carrier of the marketing message. Rather, they are designed to drive respondents to personalized Web sites, where the true personalization and marketing is really done. A good example is a Xerox program designed to encourage creatives to sign up for a new information portal on digital printing, called "Digital Opportunities." The mailer included a brochure and letter personalized with the recipient's name and geography, asking them to log into a personalized Web page to sign up for the portal and receive their free gift. The program achieved a response rate of 13%. A banner success for personalizing by name and geography? Not really. Mailers were not sent to the general creative population, but only sent to pre-qualified prospects--names of executives drawn from sales reps and targeted lists. And while the program did include personalized information, it was largely a showcase for the capabilities of Xerox presses, with lots of colorful digital print samples on a variety of substrates, designed to combat misconceptions about digital print quality. So while the personalization portion of the program was important, more important were the print samples, the targeted universe of recipients, and the interaction of the creatives on the personalized Web site. Who's Your Universe? The Xerox campaign is also a good example of the second shift in VDP marketing. The VDP campaign is not being created for the entire universe of customers. These campaigns are targeted to a select, pre-qualified list, which will naturally lift the response rate even without the personalization. Campaigns targeted to a select, pre-qualified list will naturally lift the response rate even without personalization. At Print 05, industry consultant Jim Olsen and industry analyst Richard Romano gave another terrific example of the power of starting with a select and targeted mailing list. Olsen had been retained by a supplier of boating supplies that wanted to boost sales of boating equipment during Christmas--a holiday not traditionally associated with boating in much of the U.S. The mailer was sent to members of the company's loyalty program and included the recipient's name drawn in the sand, an invitation to come to the store, and a coupon for their next $25 purchase. On the back, Olsen used a barcode to track responses and mapped the route from the member's home to the closest retail location. The result was a 14 percent response rate. Terrific, right? Sure, but was it due to personalization? To compare the power of personalization over basic targeting, the customer had split the mailing into static and personalized versions. While the personalized version achieved a 14 percent response rate, the static version received an 11 percent response rate. So the personalization only increased the response rate by 3 percent. While the customer did say that those responding to the personalized mailers also spent more, they didn't say how much more. Therefore, as in the Xerox campaign, we can conclude that much of the success had to do with carefully selecting the universe of recipients, not just the personalization. Keep these facts in mind when you evaluate VDP case studies or develop VDP applications of your own. Yes, more case studies these days are personalized largely or entirely based on name and some other, simple field, such as geography. But what is driving the response rates is the starting database of pre-qualified recipients and, frequently, the ability to use the mailer to drive recipients to a personalized Web site, where more targeted and aggressive marketing can be done.