Author Archives: Francis McMahon

Getting Marketing Teams Engaged with Production Print

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It’s no secret that marketing departments are savvy when it comes to direct mail. It’s a channel they’ve traditionally owned. They routinely work with vendors – whether it’s a direct mail house or commercial printshop – who provide access to sophisticated tools for conceiving, creating, composing, personalizing, mail-merging, printing and delivering mail pieces to a designated set of recipients and then measuring campaign effectiveness. For direct mail, they have plenty of tools for interacting with the process, from uploading artwork and providing lists to measuring response rates.

However, when it comes to bills, statements, policies and other production print output, many marketers find it more difficult to navigate the terrain (if they even consider stepping onto it in the first place.)

Why do I think marketers are less engaged with production print?

For starters, there’s the cultural dimension: IT and Operations versus Marketing. Historically production print has been the domain of the technology, operations or billing department, a silo neatly tucked away from creative and marketing types. As a result, many marketing execs simply didn’t consider transactional documents as vehicles for their messages. As awareness grows, marketing teams and even CMOs are starting to recognize the value of the transpromo opportunity. This is especially true as they face mounting pressure to deliver more accountability and better results at a lower cost. However, because they’re new to the game, they may be unsure of what executing a transpromo campaign entails, or how to engage with their traditional rivals in IT.

If you’re a print services provider, this is a golden opportunity.

Maybe you’re already providing direct mail or transactional print services for a particular client. You’ve got a new way to add more business and generate new revenue streams if you can help Marketing bridge the gap with IT. Start by helping marketers understand the potential of adding the statement into the marketing mix. Demonstrate the effectiveness of delivering targeted messages to recipients who are highly likely to spend time with the document. Point out the economies of embedding messages in documents that are delivered in an envelope where the stamp is already paid for. Keep in mind that you also have to win over their IT and operations folks who will be concerned about production cycles, data integrity and the ability to test. These guys want to know that a marketer is not going to be sticking their fingers in the code the day before (or even the week before) production.

Once you’ve convinced Marketing and IT that you have the skills, processes and tools to help them “do transpromo” in a quality controlled and measurable environment, help them foster dialogues with other departments and stakeholders. This might entail determining who maintains the library of messages and conditional business rules that define their use. Finally, provide access to tools that make it as easy to manage content for transaction documents as it is for direct mail – and make sure to measure results. In many cases, the very tools that enable marketers to interact with their suppliers for direct mail campaigns can be adapted for the transpromo world.

In a nutshell, educate them, make the appropriate tools available, facilitate the process and help marketers track results and ROI. It’s a consultative sell – but well worth the effort if it cements your relationship with existing customers or helps to bring you new ones.

The Art and Science of Competitive Bidding

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Francis McMahonEvery print services provider knows the drill – quote too high and you risk losing the job – quote too low and you risk losing money. Balancing these risks requires both art and science. Nowhere is this balancing act more challenging than when estimating complex color jobs.

For many print providers, the three-variable quote equation is:  cost plus target markup plus or minus a “gut factor” based on current demand and available capacity.

The “gut factor” takes away a percentage of the markup when the market is slow, and increases the markup when demand is high. Printers use varying levels of tools and analysis to come up with each of the three variables in the main equation. Some refer to static pricing books, some create sophisticated spreadsheets and others may use commercial estimating software tools that use many variables to estimate the costs of the job and add a designated markup – but the fudge factor is always in there somewhere. That’s because most people don’t totally trust the cost numbers that get spit out of a computer.

That’s because costs are both complicated and dynamic.

Typically costs encompass people, processing and technology costs – each made up of many sub-components. On the face of it, “People” includes labor, service and monthly or yearly maintenance contracts, “Processing” includes running costs like paper, ink, and power; and “Technology” includes capital and leased equipment costs. The complicating factor is that capacity on each piece of equipment is dynamic, and the level of efficiency on one piece of equipment impacts the capacity of other pieces of equipment. People, Processing and Technology are inextricably linked so a job that requires multiple stock changes on a continuous inkjet printer reduces the potential capacity of the print device, increases labor usage and impacts inserter efficiency as well. Since jobs to be quoted may vary significantly – a catalog approach would have to include a “worst case scenario” on efficiency thereby potentially inflating pricing. Even printers who use estimating tools tend to apply a “gut check” if they know a particular job is either very simple or more complex than average.

The situation takes on a whole new level of complexity when the device in question is a full-color inkjet machine – and don’t forget the potential for built-in MICR. These machines offer your clients tremendous cost savings potential, which can make you more competitive – but only if you get the quotes rightRIGHT?

Now your “processing costs” aren’t just about a single ink and a single coverage percentage – you’ve got C+Y+M+K and maybe plus MICR, each multiplied by a different coverage percentage and unit cost. Again – do you use the most expensive ink as your baseline? An average? Either way could dramatically skew your estimates – particularly when MICR is in the mix, since it is roughly 13 to 15 times more expensive than other inks. Here, the gut check just won’t do – it’s critical to have tools that not only let you test ink coverage and costs in advance, but monitor usage/coverage for the life of the job and see if it stays true to your estimate.

Imagine that you have a job of one million pieces that started out with five or seven percent ink coverage and crept up to 20 percent coverage over time as your client added more graphics and messaging to the document. Are you still charging the same price you quoted six months ago? Do you have clauses in your contract to adjust pricing based on actual coverage? If you don’t, you could be bleeding money for the life of the contract.

What’s needed is a way to calculate the number of dots for every color in a sample and break out percentages of cyan, magenta, yellow, black, MICR or spot color coverage in order to generate more accurate quotes and collect essential color data on jobs in production. (Océ PRISMAproduction Truecost is a unique and valuable tool developed expressly for this purpose)

Another key, and often overlooked, factor that impacts costing is paper. Not the cost of the paper itself – that may be volatile but is at least directly measurable. I’m talking about the impact of the paper you use on the efficiency of the printer. Again – the linkage between People, Processing and Technology. Using papers that are not certified for a particular device can have dramatically negative results – increasing paper wastage,  “downtime” on the machine and potential fines for missed SLAs, and of course the potential to use more ink than required for the job due to absorption factors. Most print manufacturers have catalogs of paper that they have tested, certification programs with vendors and teams available to help you make wise paper choices. Take advantage of these resources both in selecting papers (or helping your customers to select papers) and in developing estimating guidelines that take into account the expected performance.

Estimating will always include the “art of the gut” to some extent, but the science is getting better and better.

What are your experiences with the challenges of estimating – especially when it comes to inkjet? I’m interested in hearing your take on the role job costing plays in creating accurate quotes – and the role quotes play in painting a brighter profit picture.

Getting Marketing Teams Engaged with Production Print

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Francis McMahon - Oce North AmericaIt’s no secret that marketing departments are savvy when it comes to direct mail. It’s a channel they’ve traditionally owned. They routinely work with vendors – whether it’s a direct mail house or commercial printshop – who provide access to sophisticated tools for conceiving, creating, composing, personalizing, mail-merging, printing and delivering mailpieces to a designated set of recipients and then measuring campaign effectiveness. For direct mail, they have plenty of tools for interacting with the process, from uploading artwork and providing lists to measuring response rates.

However, when it comes to bills, statements, policies and other production print output, many marketers find it more difficult to navigate the terrain (if they even consider stepping onto it in the first place.)

Why do I think marketers less engaged with production print? For starters, there’s the cultural dimension: IT and Operations versus Marketing. Historically production print has been the domain of the technology, operations or billing department, a silo neatly tucked away from creative and marketing types.

As a result, many marketing execs simply didn’t consider transactional documents as vehicles for their messages. As awareness grows, marketing teams and even CMOs are starting to recognize the value of the transpromo opportunity. This is especially true as they face mounting pressure to deliver more accountability and better results at lower cost. However, because they’re new to the game, they may be unsure of what executing a transpromo campaign entails, or how to engage with their traditional rivals in IT.

If you’re a print services provider, this is a golden opportunity. Maybe you’re already providing direct mail or transactional print services for a particular client. You’ve got a new way to add more business and generate new revenue streams if you can help marketing bridge the gap with IT.

Start by helping marketers understand the potential of adding the statement into the marketing mix. Demonstrate the effectiveness of delivering targeted messages to recipients who are highly likely to spend time with the document. Point out the economies of embedding messages in documents that are delivered in an envelope where the stamp is already paid for.

Keep in mind that you also have to win over their IT and operations folks who will be concerned about production cycles, data integrity and the ability to test. These guys want to know that some marketing flunky is not going to be sticking their fingers in the code the day before (or even the week before) production.

Once you’ve convinced marketing and IT that you have the skills, processes and tools to help them “do transpromo” in a quality controlled and measurable environment, help them foster dialogs with other departments and stakeholders. This might entail determining who maintains the library of messages and conditional business rules that define their use. Finally, provide access to tools that make it as easy to manage content for transaction documents as it is for direct mail – and make sure to measure results. In many cases, the very tools that enable marketers to interact with their suppliers for direct mail campaigns can be adapted for the transpromo world.

In a nutshell, educate them, make the appropriate tools available, facilitate the process, and help marketers track results and ROI. It’s a consultative sell – but well worth the effort if it cements your relationship with existing customers or helps to bring you new ones.

Thoughts? Ideas? I’d love to hear your take on how print service providers can get marketers more engaged with production print.

A Horse of a Different Color?

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Is the use of color really that different in transactional and graphic arts print environments? Or do expectations and unique application characteristics drive the perception of color quality and the choice of color technology?

In my experience, the lightning rod for differentiating the two comes down to five key questions:

  1. What drives the use of color?
  2. How do you define color quality?
  3. How much color is enough?
  4. How critical is color quality?
  5. What is the acceptable cost of color?

Let’s start with transactional environments where applications are fairly predictable from month to month and are printed in significant volumes in highly compressed windows. Here, as with direct mail, color may be used to maintain corporate branding, to induce an action, enhance understanding or just to get attention. Color is also being used in transactional environments to gain the operational efficiencies of a white paper environment and increase the potential for postal savings. As for color quality, in transaction environments the focus is on striking a balance between the cost of color and the quality required to fulfill the purpose of the application – typically directing attention to or highlighting key information on a page like an amount due or due date. More and more, those responsible for transaction documents are looking at the cost-benefit equation related to promotional messages with varying levels of color – but not at the level of color quality associated with graphic arts work.

I’ve never met a print provider who doesn’t expect and produce the best quality- including color reproduction. But we have to be careful to put color quality in context. Is it something that we recognize when we see it? Is it the quality we see in annual reports, photo books or brochures? The ability to reproduce corporate colors within 1 to 3 deltas of the target PMS or Pantone color? I contend that it is some of all of these things. But there are trade-offs in digital (and offset) printing such as throughput, machine settings, supply costs, use of specialty supplies versus standard supplies, and paper costs that can be chosen to manage the resulting color output.

As for transaction and transpromo documents, print providers are more likely to select low-cost commodity-grade papers, manage supply costs by choosing designs with low coverage and optimize throughput to satisfy short print windows, and may not even print at the full resolution that a device is capable of. While willing to make some concessions on quality in return for cost savings, in transactional environments, month-to-month consistency is critical to ensure that the look and feel of the documents contributes to a uniform and consistent relationship. So at any color or resolution level, color management remains critical across these high-volume runs.

Contrast this with how color is used in graphic arts environments. Here, job mixes tend to be more unpredictable, varying from day to day based on what customers bring through the door – or web portal. Turnaround ranges from same-day to more than a week. Volumes run the gamut from very short to very long. The amount of color coverage is driven by the job, but with a difference. Applications tend to be photo- and graphic-intensive and therefore color-intensive – with more frequent use of full color in jobs like direct mailers, photo books, brochures and catalogs. Instead of highlighting data to drive a message, the graphic or creative does the heavy lifting, supported by the message. Consequently, quality is as important – if not more important – than cost. Poor color reproduction of images, especially of people, can result in a failed communication.

This focus extends to the reproduction of product images as well. In graphic arts applications, reproduction of corporate colors is very important, and the trade-off with cost is minimal. Corporate colors must approximate the specified colors and must be produced consistently within a job and from job to job. To achieve these results, we wrestle with the conundrum of process standardization versus manipulating the process to modify print quality (often on the press). This practice isn’t ideal and is often discouraged. However, the point is that print providers who produce graphic arts applications know that skin tones must be accurate, neutrals must be neutral, and products like textiles must look realistic. Graphic arts print providers are highly sensitive to these requirements and will customize the print process to ensure that customer requirements for quality color reproduction are met. There is a strong focus on high screen rulings to achieve better image fidelity, using the best quality coated papers, using extended color gamuts and specialty colors, disciplined color management, emphasis on contract proofing and on-press approvals.

In both environments, when it comes to costs, the numbers tell the story. For example, the cost per page of an inkjet printer producing transpromo documents with limited color is far less expensive than a toner-based digital color press producing image- and graphic-intensive brochures with extensive color. As you can imagine, applying the cost of producing a color brochure to transpromo documents would be cost-prohibitive when you’re producing millions of customer communications per month. So, there are trade-offs. That said, I am increasingly impressed with the image quality, fidelity, and consistency of inkjet technology. Likewise, toner-based systems deliver outstanding color quality for many traditional graphic arts jobs. Either way, the application and business requirements drive the use of color and emphasis on quality vs. cost. From the perspective of a graphic arts guy quickly becoming immersed in the world of transaction printing, the two environments are similar, but with key differences.

What do you think? I look forward to your feedback and would love to continue the discussion at Graph Expo. I’ll be in the Océ booth (#1217) October 3rd through 6th.

From Boise to Boca and other Big Moves

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Some of you may be wondering – why did I decide to come to Océ from HP? It was a long trek from Boise to Boca Raton, but I’m already settling in – and finding the palm trees and South Florida atmosphere rather appealing. I’m sure I’ll appreciate it even more in February. 

In all seriousness, my reasons were pretty simple. While I spent time in transactional and corporate in-plant and CRD printing at Xerox and Kodak, I was intrigued by the idea of taking what I’d learned at HP, Kodak and Xerox and expanding my field of vision to include production and transactional printing at a company that’s truly riding the convergence wave.

The market is evolving. It expects suppliers to successfully serve the needs of graphic arts customers, production printing customers and more. I see a multitude of synergies between the graphic arts and production/transactional disciplines and Océ serves many commercial print customers who are doing transactional work for large enterprises. It’s exciting to see the cross-over happening up close and personal.

 According to InfoTrends data presented during last year’s TransPromo Summit  Keynote presentation, the printed TransPromo market is expected to grow from 3.8 billion impressions to 27.5 billion impressions- a compound annual growth rate of 48.5 percent! This type of growth provides a unique opportunity for commercial printers like my friend Jack Glacken of Today’s Graphics in Philadelphia to grow their businesses while helping their customers to grow as well. Sometimes you find an opportunity to work together with customers to grow everyone’s business and just know that it’s the right thing to do. I think I’ve found that kind of opportunity at Océ.

Looking ahead, I can’t wait to see my friends at Graph Expo and share what I’ve learned in my first 90 days under the palm trees.