Digital Directions Is Trans-promo Transparent?
By John Giles'
A Reality Check from the Field By Aaron Hale August 6, 2007 -- On opening day of OnDemand 2007 in Boston, InfoTrends president, Charlie A. Pesko's keynote presentation on the state of our industry touted its new golden opportunities. "Trans-promo," he exclaimed, "is the next big thing!" He went on to define it for an audience whose heads were bobbing up and down and looking around to see who else got it. I just sat there humbly calculating how this was going to fit, but inside I was Daffy Duck hooting and hollering with the words "Jack Pot" flashing where there used to be two eyeballs. I was on fire! This is VDP on steroids! Back at the office the next Monday I began my research. I wanted in. I wound up in the very capable hands of guru Pat McGrew at Eastman Kodak GCG. After we spoke she sent me white papers and presentations for further illumination. McGrew quoted statistics showing the average recipient spends about 15.2 seconds looking at the typical direct mail piece, but an impressive 42.5 seconds reviewing a trans-promo mail piece. After all there's no better captive audience than someone that's been waiting to find out if there is an increase in their 401k balance after a sustained market surge or whether that new calling plan actually did reduce the roaming charges on their mobile phone provider's monthly statement. The idea --some would say myth-- that consumers are opposed to the idea of advertising in the white space of their billing statements has been negated by an analysis that found that 63% of people polled actually like it (InfoTrends 2006, Future of Mail.) With 64% of companies lacking a strategy to use customer data, a huge data mining opportunity awaits service providers willing and able to take it on. By now I am chomping at the bit and my brain chimes in with the how, when, and how much factor. Here's where Daffy gives way to Wile E. Coyote falling through the thin air leaving nothing but the anticipated rising puff of smoke. One thing is clear: the cost of entry will be a challenge for at least some wannabe players Let's take a look Necessary resources and acquisitions: Upgrade bandwidth from T-1 up to T-3 Upgrade VDP composition engine Software acquisition: content management system Software acquisition: document management system Software acquisition: data mining software system – or subscription to a service to supply it Horsepower: composition workstation and RIPs requires at least dual 3.5 GHZ + processors Security: HIPAA level compliance or certification--or vertical-specific high level security requirements Redundancy: second digital press Cost: approximately $1 million dollars On the client side there will be challenges as well. Statistics show that 64% of companies lack a strategy to use customer data. This is a data mining opportunity, so using one's experience with list and campaign segmentation is crucial. Experts recommend that a print provider offering trans-promo services bring a dedicated data-priented staffer on board or select someone from within who has a web-based skill set to oversee and manage the client's data in addition to handling mining duties. Remember that these documents go out on a monthly basis. Depending on the degree of segmentation the client requires there will be a critical need to develop a rotation of fresh segment-specific messaging. This must be relevant to the recipient and to the segment specific promotion or offering. These variable documents will need to be managed accordingly. As with any marketing program there is a need to identify the objective and desired outcome then form a team to help evaluate the client's current marketing program. Follow up will be developing a strategy with them to improve the status quo. In addition to approaching the marketing executives of the prospect, the accounts payable decision makers will need to buy-in as well. Trans-promo messaging must be relevant to the recipient and to the segment specific promotion or offering. Even 401k giant, Principal Financial Group, which entered trans-promo back in August of 2000, had to make a significant investment when moving into color with the acquisition of nine digital presses and a new VDP composition engine. The company faced additional challenges internally bringing its IT, central IS and marketing departments together. This had never been done before. Fear not true entrepreneurs After dusting off my now bruised enthusiasm I was determined to find a strategy that would be an enabler. I picked up the phone and picked the brains of the usual suspects for a solution. There's no question that this would be financially challenging, and it was clear that I was not going to compete with the big 3: DST Systems, Inc.; FDC (First Data Corporation); and TSYS (Total Systems Services, Inc.), at least not right now. Baby steps, baby steps. There is an advantage for the provider that has an established base of digital business prior to entry. Marketing Mentors CEO, Steven Amiel states "companies whose primary business is billing statement-centric struggle with the operational challenges associated with gearing up and gearing down as the cycles ebb and flow." Here are some suggestions from the experts: First, take an assessment of the client base Is there a fit for this type of program? Do clients that have a need for targeted, highly segmented marketing? Form a partnership alliance--perhaps a triad of a Marketing Agency + Data Manager + Printer Focus on the under-served areas of trans-promo Welcome kits Intro kits Newsletters Brokering the white space - offset start-up and production costs by getting clients to advertise with the billing or mailing client. Communicate the value proposition effectively DST's Mike Joseph says that there is empirical evidence that adding color to a billing statement does reduce payment time and that it can bring a 30 to 50% improvement in the response rate. Cost per document --show clients that print production costs to switch to trans-promo will be minimal: "The cost of landing a new customer is more than five times the cost of retaining an existing one." Robert Desatnick & Denis Detzel – Managing to Keep the Customer "A 2% rise in customer retention equals a 10% reduction in operating costs." Fred Reichheld – The Loyalty Effect Source: InfoTrends - Jan. 2007 Integrate PURLs (personalized URLs) Accelerate data mining Enhance customer data profiles for marketing forward Trans-promo is an enabler for all those who dare to imagine. Principal Financial Group is a great example of the versatility of this program applying it to the education of their customers through personalized and versioned statements. Says Rex Brooker, Manager of the Document Automation team, "At the end of the day we are trying to help our customers meet their financial needs. The statements are designed to demonstrate how we can do that." Cindy Olson, in the retirement and investor service business area, indicates that previous static direct mail campaigns fell short. Distributing over 1 million 401k statements per quarter maximizes responses. "We are integrating PURLs in our new statements to facilitate the ease of taking action," says Olson. Trans-promo is an enabler for all those who dare to imagine. So while I'm kicking the tires on this fast machine they call trans-promo I can still hear Charlie Pesko's voice as if it were yesterday, but then I'm just an excitable boy. To me it all adds up to the same--providing clients data-driven solutions now and forever spell "Success." But then don't take my word for it. One way to find out much more is by attending the InfoTrends Trans-promo Summit. in NYC, August 22, and 23. And I'm sure Pat McGrew at Kodak will be happy to share her knowledge and expertise as well. For our company, I have started a dialog with our mailing and fulfillment partner who has a large financial client base to form an alliance and get in the game. I am keeping my aspirations high and my eyes on the future. In today's marketplace it's no longer who you know, or what you know, but what you know about who you know. Bidea, bidea, bidea...that's all folks! Please offer your feedback to Aaron. He can be reached at: [email protected] See More Exclusive Articles Aaron is currently VP of Digital Communications at Premium Color Graphics, Inc. in Clifton, NJ where he has fulfilled his mandate of transitioning PCG from a traditional ink-on-paper commercial printer into a full service solutions provider. He has developed and implemented a suite of digital communication solutions that include: short-run on-demand digital printing, all levels of VDP, enterprise web-to-print POP, personalized URL (PURL) cross media marketing, and a Digital Photo Production System (DPPS)--a web based digital photo production portal for e-commerce related to digital photo printing products and merchandise. He can be reached at [email protected]