Commentary & Analysis
FREE: Billing and Customer Communication: What’s A Service Bureau To Do?
by Paul R.
By WhatTheyThink Staff
Published: October 29, 2003
by Paul R. White October 29, 2003 -- No fewer that fifteen sessions at this year’s Xplor conference deal with color variable data printing (VDP) and ways to expand service bureau business offerings. This is not at all surprising, considering the rapidity of industry convergence. The Holy Grail of digital printing has always been highly customized and affordable color documents. These days, with the impact of the Internet and electronic bill payments, there is a lot for a service bureau to choose from. Service bureaus specializing in transactional documents need to look at adding marketing messages to statements they normally process. But, answering the questions of how to do this and deciding on which technology choices to invest in become dilemmas. Do they buy a new digital engine like a Xeikon or iGen3, or do they keep doing what they have been doing and wait for Internet bill payment to take away their bread-and-butter application? Let’s take a look at some motivating statistics. According to figures released as part of the CLICK 2002 conference, billers in the telecommunications industry project that about 26% of their bills will be viewed and paid online by the end of 2003, growing to about 35% by the end of 2005. Billers in the insurance industry project about 21% of their bills will be viewed and paid online by the end of 2003, growing to about 28% by the end of 2005. Credit card billers project that 13% of their bills will be viewed and paid online by the end of 2003, growing to about 23% by the end of 2005. Utilities billers project that about 6% of their bills will be viewed and paid online by the end of 2003, growing to about 11% by the end of 2005. By now, I ‘m sure you can see an emerging trend. Considering that B2B billers average $7.25 in savings per invoice, according to a June 2002 Gartner study, the incentive to move bill payments away from paper based transactions is fairly easy to calculate. Judging from these forecasts,it appears that the bread-and-butter base is deteriorating from under the service bureaus According to a recent survey about The Future of Mail, done by CAP Ventures, the mean amount of spending on direct marketing for 2002, covering direct mail, telemarketing, web marketing, wireless, newspaper, magazine, television, radio and other outlets, was $787,000. Direct mail is the most significant area of spending, while web-based direct marketing is the least significant. Over thirty-two percent of the companies responding to the CAP Ventures survey indicated that spending would continue to increase. Spending increases are greater for color direct mail—37.2% indicating increased spending on color direct mail. When service bureaus in the CAPV survey were asked if they packaged marketing messages along with their transaction documents, 53.1% indicated there was no need to do this. Another 27.6% of respondents said the technology is already part of their service offerings, and 19.3% said it would be part of their services by 2005. Clearly, an opportunity exists to grow this service. Xplor is an educational conference, let’s hope that service bureau owners figure out what’s happening. I’m putting my money on the Xplor sessions where these trends will be fully examined. You can receive more information at www.xplor.org.