Author Archives: Elizabeth Gooding

About Elizabeth Gooding

Elizabeth Gooding is a visionary innovator in the area of relevant, personalized communications that drive positive business results. In addition to managing the Insight Forums blog, she conducts research on trends, technology and opportunities related to integrated, closed-loop transactional marketing (aka Transpromo), shareholder communications and social media. As the president of Gooding Communications Group www.GoodComm.net she leads a team of senior consultants solving problems with designing, producing and procuring business communications. Committed to driving innovation in communications, she has launched a series of business networking communities for communications professionals on Linkedin - the Transpromo Professionals Network, The Financial Communications Forum, The Healthcare Communications Forum and Shareholder Notice & Access group. Previously, Elizabeth founded Art Plus Technology, which provided design and communications strategy to the financial, insurance, and healthcare industries for 20 years prior to its sale in 2007. Elizabeth is the former editor of E.bill Magazine and is a frequent speaker at industry events such as AIIM, the Investment Company Institute (ICI) General Meeting, On Demand, NAVA Operations Conference (now IRI), the Gilbane Conference and Xplor. Follow her on www.twitter.com/egooding

Risky Business

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http://www.dreamstime.com/-image8059703

Property and Casualty (P&C) Insurance carriers are in the business of assessing risk; risk of theft, damage, injury, professional malpractice and catastrophe as well as investment risk. They make their money by laying odds on the likelihood that things will go sideways for their customers and that they will earn enough money by investing the pool of premium dollars to pay out on the bet if things do. Lately it seems that climate change is blowing up all the models for setting the odds of a natural disaster and insurers are dealing with defining and delineating coverage for new threats like cyber-terrorism that have completely changed the game.

The core systems most insurers have in place are woefully inadequate to handle the scope and pace of this new insurance game. In order to keep up, companies have built add-on modules and work-arounds to their core systems, often relying on Microsoft Excel or Microsoft Access “Band-Aids” to keep business moving. Many carriers that have upgraded their core systems did it on a “go-forward” basis leaving existing business on the old policy administration or claims system and writing new business on the new platform. At some companies this has happened more than once and there are now several “core” systems in production for different lines of business. All of the Band-Aids, work-arounds and go-forward solutions have left data scattered in multiple repositories just when carriers need data in one place more than ever.

In order to adequately assess risk, insurance carriers need large amounts of policy, claims, fraud and customer demographic data all in one place so that they can use risk modeling and data analytics to determine which types of risk are profitable to insure.  According to Accenture’s  2012 North American Claims Investment Survey, 54% of P&C insurers have core systems that are more than five years old, 66% say their claims systems are not optimized to collect and analyze data and 78% regard their capabilities inadequate to manage new forms and levels of risk, such as those presented by cybercrime, terrorism and increasingly frequent and severe natural catastrophes. So, after years of avoiding the disruption, expense and well – risk of a major core systems upgrade many companies have realized that they just can’t avoid taking the leap. A small study of 37 insurance carriers by Novarica indicated that 25 percent of large P&C insurers and more than 40 percent of midsize carriers were in the middle of converting their policy administration systems or planning to start a conversion at the end of 2011.

Keep in mind that the typical core systems upgrade will take from an incredibly fast eighteen months to a more typical three years plus to complete, depending on the number of undocumented work-arounds that need to be incorporated into the system and the level of data conversion to be completed. This means that a large percentage of the industry is either planning a core system upgrade or in the midst of completing one. And what comes out of these systems you ask? Documents, lots and lots of documents: quotes, policies, premium invoices, notices, claims reports, payments and more.

Opportunities abound for reducing the costs of producing documents in parallel with core systems conversion. Bringing systems together increases the opportunity for postal optimization, targeting analytics and improvements to the design of the documents themselves. The core systems upgrades have a larger implication as well; they enable insurers to develop more segmented and personalized products to appeal to different age, risk, ethnic and geographic groups of consumers. Direct marketing and agency marketing support is becoming more tailored and personalized as well with multi-touch, multi-channel and multi-language campaigns hitting the paper, airwaves and cyberspace simultaneously.

P&C Insurers are expected to spend an average of 17.5 million on Claims System upgrades alone. This seems like a pretty substantial number until you consider that the top 16 P&C insurers spend an average of $315 million on advertising each. GEICO alone spent over $993 million on advertising in 2011. This is not counting direct marketing spend – P&C Affinity Mail alone exceeded 500 million mailings in 2011 according to Mintel Comperemedia.

Savvy service providers are positioning themselves to help insures take advantage of newly upgraded systems and a wealth of new data to improve their customer experience throughout the insurance lifecycle. With their plates full to overflowing with core systems conversion initiatives, insurers need help to ensure that the tangible representation of their value to consumers – namely insurance documents – are not put at risk by the very projects intended to reduce risk. Now is the time to show insurers how to redirect some of those advertising dollars toward investments in customer experience and cross-sell using low-risk, high-reward solutions like direct mail, statement marketing and personalized collateral in tandem with QR codes and other calls to action that drive social media engagement and leverage consumers interest in mobile insurance applications. If your company isn’t positioned to help them, maybe you should be looking at some core systems upgrades too.

 

Elizabeth GoodingElizabeth Gooding is the President of Gooding Communications Group and the Editor of InsightForums.com. She covers business communications trends in highly regulated industries such as insurance, financial services, healthcare and telecommunications.

Jell-O, Healthcare and the New Normal

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physicians and hospitalsRunning a hospital or healthcare practice is already labor and capital intensive, highly regulated and impenetrably complex. The Affordable Care Act and the growing trend toward consumerism has added constant change to the list of industry challenges. While the ACA itself is the law of the land and implementation is moving forward, the foundational elements to be implemented are as firm as warm Jell-O. Change is the new normal:

  • States may or may not expand their Medicaid programs;
  • Health Insurance Exchanges (HIX) may be set up by states or by the Federal government in certain states, and the Federal HIX implementation structure is not fully defined;
  • Accountable Care Organizations (ACOs) are being formed and tested in near real-time;
  • Definitions of Essential Health Benefits (EHBs) can vary by state and guidance is required;
  • The “standard” 8 pages format for the newly mandated Summary of Benefits & Coverage (SBC) can now be any length determined necessary by insurance companies (Note: the purpose of this new, somewhat redundant, document was to provide a standardized plan comparison for consumers.)

Provider’s biggest concern may be potential changes and interpretations surrounding “Necessary Care.” According to the Journal of the American Medical Association, “care that did not show a proven health benefit, and where a less costly alternative was not used,” accounted for between $158 billion and $226 billion in 2011. Proposed regulation around necessary care shifts financial risk to doctors and hospitals and this, along with other regulations and stricter Medicare compliance requirements, will require investment in Electronic Health Records (EHR) and other major infrastructure upgrades that smaller providers are not equipped to fund.

The combination of independent providers’ flight from risk, a need to dramatically reduce costs and increased capital requirements is driving the next big source of change: Mergers and Acquisitions.

Market consolidation

fish eat fish

The pace of consolidation is mind boggling: the annualized number of hospital acquisitions or mergers nearly doubled between 2009 and 2012. Plus, physicians are merging with health plans and hospitals, hospitals are merging with hospitals and long-term care providers, health insurers are investing in hospitals and physician practices. Not to mention non-provider consolidation in biotech and pharmaceutical manufacturers, disease management companies and all along the healthcare supply chain. In an interview with The Huffington Post, Robert Laszewski,  president of Health Policy and Strategy Associates referred to the M&A climate in healthcare as an arms race in which the players are merging into bigger entities in hopes of restraining their own costs and grabbing larger shares of the markets.

According to PWC’s Healthcare Executive Agenda consolidation is not a panacea and even small healthcare mergers carry a lot of risk. We’ve seen the same thing in the merger-prone print industry – nearly two-thirds of deals do not meet pre-merger expectations. This lack of stellar success is not likely to stem the tide of mergers; however, it does present many opportunities for print service providers and industry consultants to make these newly consolidated entities more successful. Here are a few thoughts:

  • While individual providers and provider groups have low volumes of communications, larger merged-entities have volumes that are more attractive for outsourcing.
  • Newly formed entities have redundant documents and systems that need to be unified or eliminated in order to gain the sought-after costs savings from the merger. Consultants and Outsourcers can help to meet those needs more quickly.
  • The ability to consolidate volumes, processes and technology allows outsources to deliver immediate savings from house holding, postal optimization, white paper processing and electronic services such as electronic payment and presentment.

What needs to happen after a merger? Plenty of situations where service providers can add value:

  • Determine brand strategy. Research demonstrates that capital markets respond more favorably to brand strategies that involve combining elements of the two companies than strategies that replace one entirely or leave both untouched. This requires an analysis of the strength of both companies.
  • In parallel with re-branding considerations, a business communications audit needs to be performed to identify the people, processes and technology used for generating business documents. This audit should generate documentation on current processes and recommendations for leveraging the best practices within each firm, the combined volumes of the merged firms and eliminating redundancies.
  • New branding (and likely new regulatory language) will need to be incorporated in the systems that are proposed to be maintained going forward. Efficient implementation will typically require an additional analysis and redesign step to create document standards and streamline implementation.

The newly merged company will likely also be evaluating their supply chain; eliminating vendors or “right-sizing” with vendors that fit their new status as a larger organization. The ability to support these firms with the analysis and streamlining processes makes it more likely that you will be considered for additional outsourcing opportunities rather than dropped from the vendor list.

While it would be prudent for these companies to go through a detailed pre-merger fit and synergy analysis from both a financial and a customer perspective – most often the customer and customer communications strategy is in that “warm Jell-O” mentioned earlier. The opportunity to help companies evaluate these issues pre-merger or immediately post-merger can be of huge benefit in achieving the hoped-for cost savings and also maintaining market share by communicating effectively with customers and making sure the bills get paid amidst the merger madness. Let’s call that preventative care.

The bottom line is that if constant change is the new normal for health care providers, there will be constant opportunities for companies who can help them deal with those changes.

Editor’s Note: Additional information on changes in the Health care industry is available from our sponsor, Canon Solutions America. See the PressGo! Industry Guide to Healthcare.

 

Elizabeth Gooding

 

Elizabeth Gooding is the president of Gooding Communications Group and the editor of InsightForums.com helping clients in highly regulated industries—and the service providers they depend on— to optimize the designs, processes and production technology used for multi-channel communications.

Health Insurance – Change Brings Opportunities

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It’s fair to say that the business model for health insurance is in the process of being completely redefined by the Patient Protection and Affordable Care Act (PPACA or ACA). Health insurers can expect to spend the bulk of 2013 getting ready for the new post-ACA marketplace. How far reaching are these changes? Well, they impact critical factors like:

  • Who insurers can sell to: individuals in addition to groups.
  • Who insurers must sell to: no ability to deny coverage for pre-existing conditions.
  • Where they sell their products: new Health Insurance Exchanges (HIE) in addition to the usual channels plus new retail branches.
  • How they can sell their products: products offered through exchanges must conform to one of 5 standardized options.
  • How they can price their products: they must devote 80% (in some cases 85%) of premiums to actual customer medical expenses leaving only 15% to 20% for all administration and overhead.

In addition to the changes that are mandated by the plan, there are many changes that just naturally flow from adapting to a consumer-driven market. In 2011 approximately 50 million people – or about 16% of the US population – had no health insurance coverage or eligibility for government sponsored health programs. In 2014 approximately 60% of that population is expected to purchase private health insurance coverage – that’s about 30 million new customers. In addition, another 17 million customers may come on the books as states expand Medicaid eligibility to more low-income Americans since most states contract Medicaid coverage to private insurers.

Insurers are trying to turn their marketing and sales organizations into retail operations to tap the consumer market. Like retailers, they are trying to leverage data on their customer base to drive effective marketing and communications programs. Since, other than marketing Medicare supplement programs, most insurers have had little or no consumer marketing experience they need help in this area. Compounding the problem, according to PWC, this new insurance market is made up of consumers who are likely to be less educated and many will need material in a language other than English.

Since many of these new insurance consumers have never enrolled in a health plan before, they are likely to shop for health insurance they way that they would shop for any other major purchase like a home appliance or a car – by seeking out a familiar brand. To become top of mind before these people enter the market, insurers are investing in a wide array of advertising: TV, radio, web, print and billboards to build awareness. Direct mail, email and mobile marketing will only increase as new products become available and market data is refined.

But the retail transformation goes beyond branding, insurers are opening branches where consumers can learn about insurance options and buy on the spot. In May, Horizon BCBS announced that they would be opening a new retail center in New Jersey and Blue Shield of California recently opened a “Blue Shield Store” inside of Lucky’s Supermarket in San Francisco. These are two of several retail store-fronts in 5 or 6 states with more to come in 2013.

These retail operations will naturally need to be staffed with knowledgeable people and supported with kiosks and other technology but, they will also need printed collateral, the ability to order and manage collateral across locations and the kind of seasonal and tailored signage seen in the best branch banks and retail stores.

I’ve skimmed the issues affecting health insurers and haven’t even touched on the impact to health care providers – but I think you can see that this is a market in transition. And where there is transition, there is opportunity. It may be difficult to get the attention of insurance executives with everything on their plate, however, if you do get their attention and have solutions to help them market more effectively and efficiently to consumers while driving down the costs of servicing their insured members – you could be busy for years!

 

 Elizabeth Gooding is the President of Gooding Communications Group and the Editor of the Insight Forums blog. She covers key issues affecting business communications in highly-regulated industries.

 

 

 

Editors Note: White papers and podcasts on the impact of the ACA on business communications are available on Océ PressGo!:  a business development program for Océ customers.

 

 

Setting the Right Price

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Setting the right price in printing is a balancing act that would challenge Cirque du Soleil. Even the simplest factor in determining price – cost – is not that simple. Francis McMahon posted a while back on “The Art and Science of Competitive Bidding” citing the various complexities with estimating for digital inkjet jobs due to the different costs of C, M, Y, K, custom colors and MICR as well as the variability of coverage throughout a job. The bottom line here is that the cost is not fixed, it is variable and must be tracked and managed. Then there are the labor and operations costs. Moving from pre-printed stock to white paper can cut down on paper changes and allow higher equipment productivity levels – but what portion of these savings should/could be passed on to the customer?

I interviewed a customer recently about the cost savings they had achieved through moving to a full color, white paper, inkjet solution. The savings were substantial, but they didn’t want to talk about them because they have positioned color with their customers as a “value add” – not an efficiency driver. They want to charge more, not less. That brings us to the second area of complexity – customer perception. If it is difficult to measure the hard costs of printing, it can be even harder to assess what customers are willing to pay. How much more will a customer pay for highlight color? 4 color? 4 color plus custom matched color? The ability to include MICR on the same document? Higher color coverage?

Generally, customers are willing to pay for results but, when you are just getting started with new equipment or services, you may not have any specific results to show. Are you willing to offer success based pricing and take some risk to establish credibility? If you do, you’d best make sure that you can control the results. Many customers are happy to have you share in the risk but don’t want to let you contribute to the outcome (reviewing lists, copy, creative or mailing approach.) Shared risk witout shared control is a recipe for disaster.

The other influence on customer perception is of course competitive pricing. This is a major issue in the print industry right now. There is a lot of unused capacity and many companies are pricing themselves out of business and taking their competitors down with them. How can you price at a profit when the guy next door is pricing underwater just to keep something running on the presses?

One way to stay profitable in these situations is to be in a position to offer what retailers call “prestige pricing.” Charging a higher price than the competition is possible when exclusivity or (perceived) unique services can justify higher prices. Customer experience experts also talk about “sticky services” that make it harder for customers to move for a lower price. In printing, these sticky services are things like content management and ordering portals, data manipulation services, profiling and analytics, application development, customer service dashboards and exceptional customer service. Naturally – great printing, finishing and mailing efficiency is a must as well.

On Tuesday May 3rd, Barb Pellow of InfoTrends will be delivering a webinar on how to “Price based on the value of the work, instead of the cost, be able to better explain what your customer is getting for their spend.” You can register for free here.

There is no “Manufacturers Suggested Retail Price” in production printing. Bob Barker is not going to tell you when “the Price is Right.” There is also no “loss leader” in printing right now – just losses if you don’t price for profit from the start.

What is “Solutions Selling?”

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Elizabeth Gooding with view of BostonThe term “Solution Selling” has been around for a while. Frank Watts laid claim to the term as early as 1975 at Wang Laboratories and started a series of “Solutions Selling” workshops in the early 1980s. One of his major clients for the workshops was Xerox.

Subsequently, various spin-offs have emerged, each with its own spin on the methodology but, sharing a core philosophy that sales efforts are most effective when they are focused on identifying and alleviating “customer pain points.” (Sadly, one of the customer’s pain points may be the frequent arrival of sales people in person, on the phone or in the form of emails and social media pokes.)

In the 80’s and 90’s the solution selling approach took firm root across the print manufacturing industry. I can remember in the early 1990’s copier salesmen (and at the time it was mostly men) rolling their eyes saying “they want us to sell solutions now. I think that just means that we’re supposed to sell a bunch of new products that we haven’t been trained on.” I heard this lament many times at many companies. Solutions selling had emerged as a catch phrase for “selling more stuff” – software with the printers, services with the software, finishing equipment, etc. A buzzword was born.

Many manufacturers organized their software, printers, and finishing equipment into cookie-cutter “solutions” and thought that was enough to empower their sales staff to solve customer problems.   Truth be told – in some cases it probably was a dramatic step forward for the accounts that fit the target cookie – and when supported with solutions consultants – probably increased the size of the overall sale. But, if solutions selling means solving a customer’s problem – isn’t it a requirement to have an understanding of the customer and their needs? Are packaged solutions in the absence of a methodology or an understanding of what a customer’s pain points are enough to transform a sales force? In my experience, the answer is a resounding NO!

Today, Print Service Providers of all stripes are being told that they should become Marketing Services Providers (and I haven’t heard of much variation in the striping.) They are being told that they must position themselves to “sell solutions.” But what does that mean? How does calling yourself an MSP specifically equip someone to solve the communications problems of a bank, a retailer or a fund company? Of a manager of a marketing, operations, wholesaling, or human resources department? In my experience, it doesn’t.

Truly being a solutions salesperson requires intellectual curiosity, a willingness to listen to customers, a flexible array of offers and a willingness not to sell any of them if they won’t solve a customer’s problem. It is about truly engaging with the customer first, educating the customer second and worrying about what can be sold third. It may sound counter-intuitive to put the sales part last but, trust me – it works and it builds customer relationships that pay dividends for years.

So where does this leave PSPs or MSPs who want to embrace solutions sales and solve customer problems? Well, interestingly, print manufacturers are stepping up to eat their own cooking. Océ Press Go! will be offering a webinar on April 5th   (with Don McKenzie the President and CEO of SourceLink, Bob Radzis the President of RT Associates and Bob Boucher a VP and Creative Director with Cole Creative) on “Selling Marketing Solutions versus Selling Print.” The webinar will be moderated by Barb Pellow of InfoTrends who says, “Educating print service providers on how to grow and build their business is critical. The Océ Press Go! initiative is designed to help users of its technology build new business strategies that drive volume.” So, it seems that Océ has:

  • engaged with their customers to understand their problems (how to grow their business in a time of technological change and industry consolidation);
  • developed education intended to help them solve the problem and;
  • sourced independent experts to ensure that the presentation is not run by box jockeys in sheep’s clothing.

Kind of sounds like they are using solutions selling to teach solutions selling doesn’t it? (You know how I love it when people eat their own cooking!)

I’ll be on a plane back from the BCBS Best Practices event in Phoenix that day – but I’m going to listen to the stored version of the webinar when I get back to see if it lives up to expectations. Solutions selling requires more than buzzwords – it requires problem solvers!

Printing Profits on White Paper

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I have to admit that I’m becoming a true believer in the benefits of full-color white paper solutions. This is somewhat surprising since I’ve often been the person saying “black and white is good enough” for many of my client’s applications. (I made money designing those nifty paper stocks!) But, I’ve been watching inkjet technology evolve for some time and have been increasingly impressed with the advances in flexibility, control of ink droplet size, paper handling, power consumption and workflow from a variety of manufacturers. The tipping point has been the opportunity to see an increasing number of solutions in production.

I recently had the opportunity to participate in a Press Go webinar with DST Output on the opportunities and challenges involved with adding full color capabilities to a black and white operation.  DSTO has the distinction of operating the largest digital full color print factory in the world (I’ve been to their El Dorado Hills site and it is impressive). DSTO shared details on several case studies where their clients had achieved significant savings by going to a white paper solution. Key savings areas were:

  • Reduction in postal costs by consolidating jobs into a single run and thereby increasing the number of mail pieces that qualify for the maximum postal discounts.
  • Reduction in storage and management of multiple paper stocks and selective inserts
  • Elimination of separate direct mail pieces to existing customers (replacement with full page, dynamic in statement promotions). In many cases, clients didn’t just save money – they made money.

In addition to the savings that accrue to the customer, DSTO drove down their own costs as well. They reduced costs associated with inventory management, paper changes and improved inserter efficiency. At the same time, they were able to reduce turn times and improve quality metrics. DSTO estimated that by going with a full color, white paper in solution that also supported MICR, they were able to produce two to three times the volume with half the warehouse space and seventy-five percent less staff.

These results are pretty compelling but they didn’t come without some challenges, for example:

  • Getting your customers to give up the preprinted stock (and check stock) for a standardized plain stock. You won’t get the benefits of a white paper solution without the white paper.
  • Training operations staff – you need to have operators that understand the loose-web press environment but think like a transaction printer in terms of factory controls and post-processing.
  • Training customers – document design, file handling and proofing are all different in the color environment and setting expectations early will make your transition – and your customers’ – smoother.
  • Estimating for full color inkjet solutions is tricky business and needs to be continually monitored to make sure that job specs don’t change dramatically. Luckily, tools are available to support this process.
  • If you want to get the full benefits of a “full color with MICR” solution on white paper, you will need to invest in software to add security features and a back end perfing solution. Also make sure that the MICR option is not just MICR mixed in with the black ’cause that gets expensive fast.
  • If you’re not printing color now, you’ll want to make sure you have enough network bandwidth to handle full color files and understand the impact of different levels of graphics on throughput.

Finally, it needs to be said that not everyone has the volumes that DSTO has to make this type of solution efficient. While there are a variety of models available for different volume thresholds, the move to a full color inkjet platform should not be taken on as an “if you build it they will come scenario.” I’ve helped several customers evaluate the business case for moving to full color white paper and the case needs to be made based on a firm’s existing business – not the promise of future deals. The business case and volume threshhold is completely different when looking at toner devices and, of course, cut sheet versus continuous. Quite often, in those cases it is a cost justification that has to be made based on meeting the color requirements of the marketing department (which may not extend to transaction documents).

Very quickly, full color digital inkjet solutions for transaction printing have moved from a “marketing opportunity” to an operational imperative for many companies looking to reduce costs. At the same time, that operational imperative comes with a huge marketing upside for printers and their customers. Anything that gets operations and marketing people to agree gets a big hallelujah from me!

You access a recorded version of the  webinar here. Watch it an you might become a true believer too.

How much color is enough?

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In the last couple of years, full color production digital printing has become a cost-effective reality for many applications. Many more marketing departments are considering adding color to transaction documents or making their color direct mail pieces more dynamic (rather than printing black over color shells). This led me to ask some of my colleagues at agencies, marketing services providers and plain old printers for their two cents.

I asked if they felt that it was critical to be able to offer clients exact Pantone or PMS color or if it was more important to be able to offer color consistency from run to run. I wondered if their marketing clients were asking for a standard that the recipients of the mail don’t care about. Within the context of delivering a full-color, white paper solution to customers, what are the “must haves” and what are the “nice to haves.”

After a lot of discussion and debate among some pretty knowledgeable industry professionals it boiled down to the following key points:

  • Marketing departments have a lot invested in branding, and color is a key component of branding. With that said, any marketing department that chooses to deliver multi-channel campaigns is, by definition, making compromises on color. Color will not be consistent across email, web, mobile phones, various papers, signage etc. That is an important discussion to have, and can set the baseline for color consistency tolerance.
  • Most recipients of mail have a much higher tolerance for variations in color than the business professionals sending them. If you were using a spectrophotometer and running a test in a lab, a color variation measured as a Delta e of 1.0 is generally considered to be barely perceptible to the human eye. Outside of the lab, a Delta e of 3.0 to 5.0 may go unnoticed by the average consumer.
  • Setting expectations on color capabilities, educating marketers on variations in color across substrates (something they should know but often don’t) and agreeing on acceptable and MEASURABLE tolerances is critical to success. Don’t just let them tell you that they are looking for “luscious.” (Shout out to the Off Register folks.)More research on how consumers view color (real quantitative studies folks) would make it a lot easier to reach reasonable compromises with marketers. Sponsors wanted!
  • If you have the ability to print CMYK plus 1, 2 or 3 Pantone colors, you should be able to charge more for it as long as you have the color management and color measurement tools in place to back up the promises.

At the end of the day, it is the design (information transfer not pretty pictures) and the content (information to be transferred) that should rule – not AT&T orange (probably not allowed to call it orange) or Coca-Cola red (they probably think they own the term “red”) or Luscious pink – but we all know that if we want the business, we need to be able to give the customer what they want.

 How much color is enough? How much do you want the business? How much is the client willing to pay?  So, ask them, agree on measurement for color tolerances and set prices accordingly. There needs to be a “pain and suffering” charge at certain levels of color management and client management. Enough is enough!

I’m going to be presenting a webinar on the business issues related to transitioning to color next Tuesday, March 1 at 2 pm EST. You can register here. I’ll be sharing some more thoughts on the myths and realities of moving to color and DST Output will also be sharing some of their “lessons learned” from transitioning to color. Let me know if there are some key points you’d like to hear about.

You can find a copy of the presentation at www.insightforums.com

Analyzing Document Composition Is Not that Simple

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 “This is a very simple game. You throw the ball, you catch the ball, you hit the ball. Sometimes you win, sometimes you lose, sometimes it rains. Think about that for a while.”

 Quote from Tim Robbins as Nuke Laloosh in Bull Durham (1988)

 Some analysts seem to think that composition tools are pretty simple to sum up too:  “You put stuff in, you format stuff, you send stuff out. Sometimes you print it, sometimes you post it, and sometimes you just store it. Think about that for awhile, hmmm.”

When analyzing composition or document management tools, consider that each of the questions below could spawn about 20 sub-topics:

  • What are you going to use it for?
  • Who is going to use it?
  • Will it replace something you are already using?
  • What will it have to interact with?
  • What happens if it rains? (just kidding)

It is a complex decision tree with multiple products serving each branch. But if your sales guy sounds like Nuke Laloosh, well, just swing away.

Editors Note: I actually wrote this piece on baseball and composition back in 2006 but the analysts keep throwing the same pitches – even though the game has gotten a lot more complicated.  Swing battah battah swing!

Do You Eat Your Own Cooking?

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There is an old adage that says, “Never trust a chef that doesn’t eat his own cooking.” You might think that the problem for the cook would be making sure that they don’t eat too much of their own cooking. But, if you’ve ever been a professional cook or chef as I was many moons ago, you know that sometimes you get so tired of being around food you don’t eat. I once cooked for an Italian restaurant, Café Amalfi, and I couldn’t eat red sauce for about a year after I left.

I have to wonder if printers and agencies feel the same way. They spend all day cranking out communications for clients and rarely do any marketing for themselves. It’s amazing to me how few companies, desperately seeking to deliver marketing services for clients, actually conduct ongoing campaigns for themselves.

Service providers – it’s time to eat your own cooking!

In prepping for this post, I called several service providers around the country, primarily regional firms that I’ve known for a while. I tried to focus on companies that used to mail to me when I was with Art Plus Technology or at Insight Forums. I started working on this thinking I would get a whole bunch of great examples to show. Instead, I got several types of responses to my request to “speak to the person who handles internal marketing for the company rather than marketing services for clients:”

  1. A receptionist who told me that “we don’t have any one here who does that.” (Folks – an unhappy receptionist is not a good thing for your business – but I digress.)
  2. A receptionist who told me that there was one person (sometimes two people) who does that, “but he spends most of his time on the road.” You know what? That sounds like a sales person – not a marketing person.
  3. If I made it past the receptionist (typically by cheating and calling someone I already knew there) the answer was, “we used to do that – but we haven’t in a long time.”

Wow! “We used to.”

Used to have more business too – hmmm? See a corollary there? Sarcasm aside, I do understand. The economy is slow. Maybe  you’re short staffed. The cobblers children have no shoes etc. etc. But haven’t we been telling our clients and prospects that a downturn is the right time to get more attention for your marketing dollars because there is less activity out there? Telling them that you can’t afford to go silent just because things are slow? Telling them that direct marketing is important for maintaining your brand equity?

I repeat. Service providers. EAT. YOUR. OWN. COOKING! (and stop whining about the vegetables.)

One bright spot in my research efforts was Wilde – one of my local suppliers here in Boston (ironically I know them through restaurant connections as well – go figure.) I had been to a marketing seminar that Wilde offered in partnership with 3 other agencies last year (held at a restaurant ‘cause they’re foodies.) and I called to find out how often they did that kind of stuff. Clearly they are not only doing a lot – but tracking it too because Julie Sullivan and Liz Swanson were able to get info to me within hours of my request (and lookee – two live marketing people actually in the office –even during a snow storm!) Here’s what I found out:

Wilde has a formal   lead generation program to support their sales force. For the past year, they have had campaigns dropping every four to six weeks,

Personalized snowman card

The campaigns promote downloadable content (white papers, tips sheets), webinars, and in-person seminars that showcase their direct marketing capabilities though thought-leadership (from creative strategies to operations best practices).

They use email,  direct mail pieces and are branching into inbound marketing channels, such as LinkedIn, Twitter, and their blog (and providing content to 3rd party blogs such as thedigitalnirvana.)

 70% of leads generated in 2010 were deemed “marketing qualified,” meaning they met the ideal customer/ prospect profile. Almost 30% of qualified leads led to a sales opportunity and half of those 2010 opportunities have already led to closed business (and more may convert since the sales cycle can be as long as two years). 

One of the other, less quantifiable benefits of this marketing effort has been an overall perception lift for Wilde. Because their lead gen campaigns centered on value-added direct marketing content, as opposed to pushing products,  clients are recognizing them as being experts in direct marketing—not just your run-of-the-mill lettershop.

That, my friends, is the value of eating your own cooking!

 I am sure that there are other companies out there investing in their own marketing well-being, but I sure couldn’t find them last week. If you’ve got some good examples to share – please get in touch.

Requests For Proposal: End the Madness!

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Many of my posts originate in my head as rants, are subsequently doused with antacid (and some form of sedative) and thoroughly edited down to civilized business speak. Today I think perhaps I should just “let ‘er rip!”

Let’s face it, most participants in the RFP process (from either the Issuer’s or the Responder’s perspective) don’t profit from it. You would think that the Issuer would always benefit but, in fact, they usually only achieve cost savings in trade for:

  • A slow and expensive buying process that takes focus away from day-to-day operations and revenue generation;
  • A “new” solution that typically mimics what they currently have (state of the art 1980’s solution) at a lower cost than they are currently paying;
  • Damaging relationships with current vendors, and potential new vendors through a, let’s just say it, dehumanizing process of on demand hoop-jumping.

Except in very rare cases of extremely well-crafted and needs-driven RFPs (those where a new solution or approach to a problem is being investigated, where current service levels are unacceptable or where there are major opportunities to consolidate vendor relationships) the sole beneficiaries of the RFP process are the procurement professionals themselves. The way most procurement operations are incented causes them to treat every possible purchasing relationship as a commodity and drive it into a box that can have an SKU and a price code slapped on it. And when you think you’re in the box buying business – everything starts to look like a box. This process also does not take into account how much it cost to build “the box” in the first place or how much it will take (in time and distraction as well as dollars) to build “the box” somewhere else.

And another pet peeve …

I can’t tell you how many times recently I’ve read that print is a commodity. Paper may be a commodity – but print is not paper. Print is a process – particularly any kind of variable print. Personally, I like to buy the best, most innovative, most reliable process I can get. “Print” may look like a bank statement or a personalized direct mail piece when it hits the mail – but, I prefer to work with a company that has a robust customer-self service and reporting portal and a top-notch postal management solution rather than one that lets me burn incense and pray while trucking my mail to a comingler in another State. But, maybe that’s just me.

Issuers reading this are saying to themselves “but wait – I have to save money. I have to squeeze X% out of all my vendors every 3 years.” Quite frankly, if that is your only goal, the RFP is probably the least effective way to get it. If you’ve been doing a sizable amount of business with a vendor for at least 2 years, that vendor should be able to come up with at least 6 ways to save you money. In many cases, saving you money may lower their revenue but actually boost their profit. I often see suppliers trying to save their customers money and they can’t get anyone’s attention. I’ve had to row that boat myself a time or two. If you’re thinking about issuing an RFP – make sure you really understand what you’re trying to accomplish and consider whether the RFP is the best way to achieve your goals.

Many suppliers have strong opinions on the RFP topic. John McMahon, VP at Madden Communications had this to say:

“If a current client takes you to an RFP and you’ve been unable to sell your way around that, face the facts and understand you’ve already lost. Don’t respond. If you compete on price you’re already dead. RFPs force you to compete on price – you should be dragged kicking and screaming into the RFP process.”

I don’t  agree that you shouldn’t respond to ANY RFP from an existing client – but, I do agree that you should be kicking and screaming first. Sadly, due to the formerly referenced box jockeys, your client may be REQUIRED to go to RFP no matter how much they like you. So, what’s a poor supplier to do? Here’s my top 10:

  1. Be measurable and get measured! Work with your client to develop a weighted scorecard for the services you provide and get them to complete it quarterly.
  2. Meet with your client every quarter to review the scorecard and discuss ideas for improvement (even if you have a perfect score.)
  3. If your scorecard is not perfect, make sure to respond in writing with a timeline and approaches to remedy any problems – or to document that you have already taken corrective action.
  4. Get acknowledgement of corrections from the client and the speed with which corrections were made.
  5. Don’t be afraid to talk to clients about service issues that stem from their side. However, you should also come to the table with proposed solutions (and documentation.)
  6. Be proactive! Come to the client frequently with ideas for improving processes, cutting costs or delivering better reporting or invoicing detail.
  7. Communicate broadly. Use personalized emails, blog posts and/or direct mail to let many people at the account know about regulatory changes, tips and tricks for using tools, or sources of information (like TheDigitalNirvana right?) that will help them do their jobs better.
  8. If you have a significant improvement to offer, consider doing the work at a discount or for free in exchange for a contract extension of 6 months or a year. Don’t ask for too much – but keep nudging the ball a little further out and tighten up the relationship more and more through value.
  9. Make sure your client knows about all of your capabilities. I’m not talking about feeds and speeds, I’m talking about services. Clients tend to remember the last thing you did for them and forget about everything else.
  10. When you talk to your clients about services – don’t talk about what you do – talk about how you can help them. You may not sell more print – but you may take on more of the process from the customer. That will embed you firmly in the client’s organization and dramatically increase your value.

With a little effort, any company can do what I’ve listed above. If you do, your client may still issue an RFP – but you will be in a much better position to win it if they do.  Face it – you don’t win with existing clients through sales. You win through service.