Commentary & Analysis
DME - Driving Marketing means Maximizing Digital Color
By Barbara Pellow February 16,
By WhatTheyThink Staff
Published: February 16, 2004
By Barbara Pellow February 16, 2004 -- DME, one of the most successful Xerox iGen3 sites in the U.S., understands that its business is marketing communications….not printing. The company was founded in 1982 by Mike Panaggio as a vertically integrated marketing service provider. His vision early on was to step out of the box and combine new technology and marketing media with innovative design to create integrated communications that are truly personalized and targeted to individual customers. From this initial vision, DME has grown into a company that had 2003 revenues in excess of $85 million with 550 associates, and which is growing at more than 20% annually. Initial findings in the “Digital Color – Where is the Market?” research from the RIT Printing Industry Center identified four key criteria for success in building a digital color business. They included: Firms that defined themselves as value added service providers as opposed to printers and offered a full portfolio of value added services Service providers with a clear understanding of their customer base and respective target markets and applications Companies with a balanced business model with adequate resources to invest in the future Organizations with a well defined Internet strategy to address future market opportunity DME is a showcase for a business built on these principles. A New Definition for Full Service From DME's inception, its focus was on the delivery of programs that would help clients with customer acquisition and retention. According to COO Kathy Wise, “We never looked at ourselves as printers. Printing was a service we needed to provide as part of our total offering for the client base we serve. The real thrust at DME is working with clients to leverage data and drive business results.” The service portfolio reflects DME's commitment to customer acquisition and retention programs. Its offerings emphasize the importance of media synergy and utilization of multiple forms of media to reach a prospect or customer. At the heart of DME's business is direct mail. Today, DME produces over 1 million letters per day. Integral to its offerings is the Smart Mail Solution designed to create a mail piece that the customer will open—that doesn't look like another piece of "junk mail." Once opened, the letter announces a sale or promotion and uses a range of incentive gifts to motivate the prospect to participate. Prospects are enticed to call an automated 800 number or visit a Web site to learn which prize or promotion is available to them. Once there, they take a brief survey - and the results (and the prospect's contact information) are immediately faxed and e-mailed to clients. Smart Mail Solutions can also include PerfectCall™ voice broadcast messages and inbound/outbound live calls to handle the survey. DME also offers an e-mail marketing solution called E-Cast™. E-Cast messages are marketing e-mails sent out via the Internet to a targeted Opt-In list. This medium takes the best of direct mail and provides it electronically—often with animation—directly to customers in a more cost effective and efficient manner. In a time when more people are using the Internet than ever before, DME feels that E-Cast e-mails can be a vital tool in seeking out new prospects and, as importantly, in maintaining contact with existing customers. DME also knows that any marketing campaign is only as good as the data behind it. That means creation of targeted lists, tracking of responses, appending that information to the customer database, and creating and maintaining a user-friendly interface to access reports on that information. To that end, DME provides database management on premises — data acquisition, data mining, data warehousing and response analysis. DME's goal is to drill down to identify the most likely candidates or prospective customers for its clients. To get that kind of comprehensive list, DME works with customers to mine more than one source. DME has developed strategic alliances with an array of different list companies to get the best possible data in the hands of its customers. Finally, DME has made a significant investment in digital color. DME currently has three Xerox iGen3 units installed with a fourth on order. The company is blending digital color with an easy-to-use Internet interface to put the power of personalization into the hands of auto dealers and financial planners for localized, personalized, dealerized communications. DME has developed forms and document templates with multiple areas for variable text and full-color graphics and images: customer name, address, headlines, product shots, logos, individualized text, salesperson pictures and contact information, and specific product information that can be changed out on each individual print piece on-the-fly. A Targeted Approach to the Market While DME has clients in a number of different industry segments, its primary focus has been on the automotive segment. More than 65% of revenues are linked to DME's ability to create and implement high- tech lead generation solutions for new and used vehicle sales as well as build parts and service marketing programs for auto dealers. DME's parts and service marketing achievements have resulted in national recognition from such automotive industry leaders as Toyota Motor Sales, USA, Inc., AutoNation, Inc., and American Honda Motor Co., Inc. DME has established a solution that integrates dealership data with customer survey responses and other proprietary information. They leverage this data to drive campaigns using a combination of direct mail, e-mail, telecommunications, voice broadcast messaging, the Internet and WebSurveys. In order to support dealers in the battle to retain existing customers, DME offers a Service Reminder Program to establish an ongoing relationship that reminds the auto dealer's customer that their business is important. The Service Reminder Program imports customer activity from ADP or R&R systems to determine how best to impact behavior — what reminders to send, what offers, and when. The right letter then goes to the right customer at the right time. DME also provides online response analysis to show response, customer trends, and direct customer feedback. SRP letters remind the customer before service in order to better compete with after-market choices. SRP letters are also used to gather customer feedback via Business Reply Cards (BRCs) or the Internet. The program also adds lost customers to the prospect database. The program has worked for DME clients. In 2001, SRP test-pilot stores experienced over 9% growth in Fixed Operations. The control stores that didn't use the program averaged only 3.5% growth. That's a relationship that is beneficial to both sides. According to Kathy Wise, “It is all about business results for our customers.” One of the key programs driving iGen3 volume is a Model Specific Maintenance Program for Southeast Toyota. Each individual dealership has the ability to set up a maintenance service program and pricing schedule for the various models of Toyota vehicles that they service. Dealers generally sell and service more than 20 Toyota models. Via a Web interface, the dealer logs onto a template-based system. For each car model that the dealership services, the manager can set up a unique maintenance schedule and related price list, incorporating it within a graphically rich template. The dealer then proofs the model specific maintenance program online and triggers on demand printing and fulfillment for the dealer location. This program alone is generating in excess of 70,000 impressions per month for DME. The software driving this application was initially developed internally by DME, but it—together with other applications—is gradually being migrated to XMPie. When asked why DME was making the transition, Kathy Wise stated, “XMPie PersonalEffect™ software has some unique capabilities that we like. With XMPie, you can leverage Web on Demand capability into a multi-touch-point experience. The same rules can be used to drive multiple output mediums ensuring that the audience gets the same message regardless of medium used. The PersonalEffect uProduce server acts as an application server behind our Web server and delivers HTML upon request. When the user types in a personalized URL, a personalized page appears.” DME has also transitioned black and white digital printing on offset shells to one-step production on the iGen3. AutoNationAutonation, a large retailer for new and used autos, produced separate mailers for different auto dealers. The printed piece was originally a 4/4 preprinted shell that was overprinted with variable black and white laser printing. DME has now eliminated the preprint phase completely, so that the entire piece is now run on the iGen3. Both the “background” shell and the copy are created at the same time. This allows DME to combine print runs so that the entire job (multiple lists, multiple dealers) is run at once. The value to DME includes reductions in programming, data processing and print time. It also eliminates the warehousing/storage of a high volume of shells and streamlines the workflow. According to Kathy Wise, “This revised process is cost effective for both DME and our client.” In addition to its focus on the automotive market, DME places emphasis on the financial services market. Financial advisors work to attract new clients for annuities, retirement and estate planning, long-term care and insurance through seminars. DME supplies financial companies with marketing techniques that allow them to sell more and see more prospects through comprehensive direct mail campaigns. Through its subsidiary RME, DME also runs Seminar Success, a seminar marketing program. Approximately 25% of DME's business is derived from this market segment. The Future While DME is a leader in digital color, the company built a solid service-centered business model that positions it as a marketing solutions provider. DME's value proposition is simple…helping clients acquire new customers and retain their existing base. DME has targeted its efforts at specific market segments to become the acknowledged leader. The automotive and financial services sectors are looking for retention, loyalty and more revenue per customer. DME is focused on integrated communications to deliver business results, combining direct mail, interactive response, telesales, e-mail marketing, database management and digital printing to maximize market reach for its clients. DME is presenting itself to the market as the integrator for cost effective communications and has invested in the people, processes and technology to ensure its success.