Commentary & Analysis
How to Turn a Stack of Mail into a Pile of Gold
by Jeff Hayzlett June 19,
By WhatTheyThink Staff
Published: June 19, 2006
by Jeff Hayzlett June 19, 2005 -- A recent article in TheWall Street Journal illustrates the power of analyzing and utilizing customer data to increase sales and retain customers. According to the story, Tesco PLC, Britain's largest retailer, has achieved double the market share in groceries of the Asda chain since Wal-Mart Stores bought Asda in 1999. Transactional documents serve as ideal vehicles for companies to deliver marketing messages to a captive audience of one. Wal-Mart Stores' entry into the British market was expected to eventually take significant business away from competitors such as Tesco. But it didn't. What happened? Tesco launched an aggressive marketing program based on information obtained from its loyalty card about customer shopping patterns, purchases and preferences. Tesco uses the data to create TransPromo offers for specific customers, reach consumers with customized direct mailers, determine pricing and discount strategies, and make a variety of other marketing decisions. Tesco's success demonstrates why all companies need to understand how data about their customers can serve as the basis for an effective communication campaign that helps build revenue. Fortunately, most businesses have a ready-made platform for launching a targeted program: the bills and statements they issue every month. These transactional documents serve as ideal vehicles for companies to deliver marketing messages to a captive audience of one. Advances in data mining and digital technology provide greater flexibility than ever for companies to tailor print communications that break through to each recipient. Using information such as a person's shopping habits and preferences, marketers can personalize and customize documents that help them acquire and retain customers. TransPromo communications give marketers endless possibilities to reach consumers in a meaningful way. Converting traditional transaction documents into vibrant marketing pieces has the added benefit of turning these "cost center" documents--companies must create and send bills and statements as part of the normal course of doing business--into potential revenue producers. Including promotional messages and marketing offers on the transaction documents, also known as TransPromo communications, gives marketers endless possibilities to reach consumers in a meaningful way. TransPromo Communications Create "Win-Win" Growth Opportunities TransPromo communications bridge the gap between statement and bill printing and marketing collateral that historically has been delivered to customers in separate mailings or by stuffers in the envelope. Consolidating all of this information into one document creates a powerful tool for reaching customers. For print providers, working with clients to develop these types of programs provides significant opportunities to grow their businesses. To maximize the value and impact of these materials, marketers and printers who combine color with personal information about the recipient can create a communications piece unrivalled in its ability to reach a consumer on a highly personal level. For print providers, working with clients to develop these types of programs provides significant opportunities to grow their businesses. The typical consumer receives more than 3,500 marketing messages per day from a wide variety of media such as television, radio, print, direct marketing, the Internet, e-mail, voicemail and cell phones, according to Yankelovich, Inc. In this technology-driven mass media environment marked by unwanted intrusions, consumers (both of consumer and B2B products) want personalized information delivered in a way they control--such as choosing where and when to open an envelope and who sends it. Indeed, people still prefer print. InfoTrends/CAPVentures reports that 69 percent of respondents chose direct mail over e-mail and telemarketing when asked to rank those three methods of receiving marketing communication. A study, "Wasted Advertising Opportunity," conducted for Group 1 shows that bills and statements get more attention from consumers than any other form of customer communication, including TV advertising. 69 percent of respondents chose direct mail over e-mail and telemarketing when asked to rank those three methods of receiving marketing communication. The VP of Marketing for an S&P 500 company summarizes the opportunity this way: "Every monthly invoice or statement mailing can include promotional offers personalized according to the customer profile data in the transactional databases, extending the company's marketing efforts and helping increase the firm's share of its customers." Improve Customer Loyalty and Retention Transactional communications customized to the individual, full of color and design, effectively differentiate a company. They build customer loyalty and retention in a number of ways, including making it easy for recipients to comprehend complex information. Here are a couple of good examples: * A global financial services company, serving 30,000 companies and 3 million individuals, was receiving complaints from institutional clients that its employees didn't understand their 401(k) statements. Information in the document that was intended to motivate and retain participants wasn't reaching them. The company redesigned its 401(k) statements to make them shorter and easier to read. Digital color was used to clarify data and present it through charts and graphs. Call center volume from recipients who didn't understand their statements decreased by 15 percent, while retention of companies went up. * A large Midwestern insurance firm with multiple lines and hundreds of thousands of clients needed to end confusion among consumers regarding their billing statements and encourage prompt, accurate payment. The addition of full color to highlight important information on invoices and statements led to customers paying the entire and correct amount of their bills by an average of 14 days earlier. Questions to the company's call center dropped by 13 percent. Adding color to customer bills and statements increases response rates and better engages customers. It takes more than color, however, to create successful TransPromo communications. Companies need to utilize their customer data to create personalized and customized communications, highlighted by the effective use of color. Unlocking the Power of Customer Data Data management begins with identifying the available customer, product, public, performance and compliance data, and determining its accessibility. Who "owns" the data and whether it be mined are critical questions. Who "owns" the data and whether it be mined are critical questions. Once information has been retrieved, marketers can then merge it with new document designs that incorporate color and personalized information. Chrysler Financial statements, over just seven months, went from black-and-white pre-printed shells with variable data (customer name, address and account overview) and lots of white space to robust, color documents that utilized the entire page to deliver information about new models, promotional offers and other marketing messages. Effective uses of color are also about drawing attention to important information, such as in charts and graphs, and ensuring brand consistency when developing TransPromo materials. Understanding the data available to them allows marketers to determine the most effective communications approach: * Personalization--add the recipient's name and address and perhaps other data * Versioning--create different versions of a piece for different types of recipients based on gender, geography and other demographic information * Customize--use the information about a customer to create a unique communication experience * Integrate--develop new communication tools by integrating transaction information with news and promotions Print providers should talk with customers about their client targeted communications and determine if there's a better way to utilize invoices, statements and other transactional documents. Here are three questions to start the conversation: * Do you make the most of what you know about your customer? * Could you redesign your statements to add space for more personalization and targeted offers? * Could you take the information you preprint on inserts and create more personalized and customized offers? The answers to those questions could open a whole new world of business opportunities and make your print operation even more valuable to your customers. Please offer your feedback to Jeff. He can be reached at: email@example.com.