Grant Stewart, Founder of Vectis

The Vectis Agency in Australia has a great track record of helping their customers, who are typically printers, mail houses and postal organizations, to sell the concept of Transpromo, or Integrated Insight Marketing to their end customers using case studies.

 According to Grant Stewart, the Founder of Vectis, “we have pursued case studies that prove a marketing point, for example: can the statement deliver value long after the other channels have stopped working ?” They showed the answer to be “yes” in their Bartercard case study.  “Or can the statement deliver better value than competing channels?” Again, the answer was “yes” according to a case study for Lombard. “Or can the statement offer a unique competitive advantage to winning business  as demonstrated by our Sutherland case example, rather than the traditional print-legacy type color vs. B&W vs. paper vs. electronic discussions.

Stewart believes that the best way to get a Transpromo program going is to articulate the opportunity cost of not doing it. The Vectis  case studies  were used to articulate early opportunity cost which gained initial traction and cross section (marketing, operations, finance) buy-in. Most programs have since gone on to far more sophisticated levels, and continue to fuel themselves under a rigorous, measurement structure.

“I also believe printers need to spend a bit of time learning from direct markets” states Stewart. “When was the last time you heard a printer talk about a response rate’s statistical margin of error?”

Printers and Direct Marketers have a lot to learn from each other to make a more compelling Transpromo argument to end users but, the challenge to me remains simple: help the customer articulate the opportunity cost of not doing it using the tools the customer has. Only then can you move these programs to levels that you might both aspire to.

I’ve included a link to a variety of Vectis case studies here. I cite them often because they tend to be simple, straightforward proof points for one decision criteria at a time. Thanks Grant.

For years we’ve been told that it’s smart spending to market to our current customers.  Patricia Seybold, Don Pepper and Martha Rogers have written volumes about how it is good business to keep and grow a customer. As far back as 1996 with One Stop Marketing, Jonathan Trivers concluded that it costs three times more to acquire a new customer than it does to re-attract an existing customer — and it costs 30 times more to acquire a new customer through through advertising than by referral from an existing relationship.  Yet even while pulling out of a recession in 2010, shiny new ad campaigns draw the majority of our budget and our attention.  We don’t work the bench; we spend big bucks to bring in a marquee shortstop. 

According to Trivers, about 95% of marketing dollars are focused on attracting new customers at the bottom of the “loyalty ladder.” I like the image of moving customers up a loyalty ladder.  Customers atop this ladder are so satisfied that they won’t leave you at any price and they are active promoters of your business. Rather than pouring out all the budget at the bottom of the ladder, companies should be spending at least 30% at the top half of the ladder leveraging existing customer communications.  According to J.D. Powers, in the auto insurance industry 56% of highly satisfied customers will recommend your business to a friend; such customers report making 2.5 actual recommendations and 46% of them say they would never leave you. Results are similar across industries.

So in an economic climate that requires smart spending, consider winning by increasing focus on your customer base. Know that this can be a really big win—like a Red Sox win against the Yankees in late September.  Why?  Because the most effective way to market to your base- increasing loyalty and gaining new sales and referrals- is also highly cost-efficient.  You can leverage the transactional documents your company must produce and deliver to customers.  In lean times, more than ever, a TransPromo strategy (yes, it’s that word again) is a home run because the transactional communications budget also supports your marketing program.

Cost-savings score big, but the game-winner is that TransPromo (or as I prefer, Transactional Response Marketing or TRM) can achieve significantly better results than more costly traditional forms of marketing such as direct mail or print/TV/radio advertising. TRM can achieve these powerful results for two reasons.  First, research shows that transactional communications are important to customers so they pay more attention to them – and therefore to the messages you integrate with these communications.  The average person will give a statement nine times more attention than a piece of direct mail.  (Less than half of direct mail is even opened.) Again, according to J D Powers, transaction documents are a key driver of customer satisfaction, comprising 41% of the consumer finance satisfaction score and 17% of the credit card industry satisfaction score. Second, the data that drives transactional communications enables you to integrate specific, personalized, highly relevant messages and offers that are more likely to please customers and/or to get them to take action.

TRM is powering winning marketing teams today.  A March 2008 study by Aberdeen Group showed that among companies meeting best in class standards, those utilizing closed loop marketing exceeded other best in class peers.  The closed loop group achieved on average 6% greater ROMI and 7% more lead conversions. Revenues per account were 3% greater and average return on marketing campaigns was 14% greater. Transactional Response Marketing is closed loop marketing applied to transaction documents. Company success stories include Avis Australia which saw response rates rise from 2.5% to 10% when invoices were utilized to extend offers vs. other approaches such as direct mail or advertising.

So do you make the business case for Transpromo or Transactional Response marketing based on immediate response rate, long-term customer retention and value, or substantial operational efficiencies? Does it taste great or is it less filling? Is TRM as switch hitter? Have I been watching too much baseball? It’s a nice hot Sunday afternoon– I think I’ll go grab a beer and ponder this at length.

Cheers.

The best marketing ideas today are operationally justified. Envelope marketing is no exception. A variety of solutions for printing messages on envelopes have been touted to marketing departments for a long time. Some companies pre-print messages on the outside of envelopes such as corporate taglines, incentives to go paperless or eye catching graphics to entice the recipient to open their mail.

Megaspirea, a French firm, introduced what they called “Dynamic Envelope Creation” via the Mailliner 100 at IPEX way back in 2006. Dynamic Envelope Creation was hailed as a holistic process for making a complete mail piece (envelope plus content) out of a single print stream. Variable images and messages could be printed directly on the envelope itself. Despite a strategic relationship with Pitney Bowes and Emtex that should have given the company a lot of reach in the US market – the technology never really took off.

You would think that the ability to dynamically market on the outside of the envelope would be marketing catnip – but in fact, many direct mail marketers feel that the white envelope approach is more effective than jazzy graphics on the outside of the envelope. Transaction mailers today, are still not well integrated with marketing departments (whether in plant or service providers) and therefore envelope marketing is a tough sell to this group.

DST Output (www.dstoutput.com) recently announced an envelope marketing solution that, despite the demise of past market entrants, I believe has a real chance of success. Why? Because the solution is as appealing – or potentially even more appealing- from an operations and efficiency standpoint as it is from a marketing standpoint. Like white paper, full color printing in general – operational efficiencies from wrap envelopes are creating the business case for more effective marketing. First let me explain the solution.

DST’s Wrap Envelope technology is a no-touch process for printing, wrapping and finishing high-volume, First-Class Mail packages in a high-speed production environment. Wrap extends major mailers’ customer marketing efforts with dynamic messaging that can be applied to the front, back and inside of the envelope. This means that the solution provides an envelope marketing opportunity for transaction mail like statements and bills, but also can double as a stand-alone self-mailer.

DST Output’s Wrap Envelopes are printed duplex on continuous plain roll-stock paper, and then literally wrap around multiple pages of statements, bills, inserts and reply/remit envelopes. The process enables mailers to embellish the interior as well as the exterior of the envelope with marketing messaging and promotional content, such as coupons, event information or other customer marketing materials – and can include customer data on the interior to create the self mailer – or additional personalized offer.

There are other operational benefits as well:

1. Placing messaging on the envelope can minimize postal weight by reducing the insert count and replace separate mailings and direct mail.
2. Wrap Envelopes can serve as a self-mailer for privacy statements, regulatory notices or e-statement bounce notifications minimizing the cost of these mailings.
3. The windowless Wrap enhances security and privacy with no see-through areas.
4. No window also makes it fully recyclable (no cellophane) and therefore more sustainable.
5. There is no need to pre-order and warehouse envelopes reducing storage, commercial print and procurement costs as well as improving cash flow.

The Wrap Envelope is a compelling solution for one-page statements or bills – with or without a remit envelope. From a quality perspective, Wrap utilizes an integrated no-touch manufacturing process that tracks each and every mail piece during production to verify that the total package is complete and accurate. If an error is detected, the process automatically remakes the entire mail package.

So, no-touch quality control, cost savings, improved privacy and sustainability and – oh, by the way – completely dynamic messaging inside and out. I think that’s pretty innovative. (Take a look at the examples below.) If DST was selling this as a hardware solution, I think it would be a big success. For now, only DST outsourcing customers can take advantage of the technology and it will be interesting to see whether it is adopted for the marketing features, the operational features or both. How would you use it if you could?

(Click on pictures to see larger view)

Wrap Envelope (front) with logo and text message

Example of Wrap Envelope (front) with Dynamic Graphic

Wrap example with Dynamic Messaging on Back of Envelope

Wrap envelope with Dynamic Graphics and Messages Inside

"Outside In" Wrap Campaign

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A few weeks ago I posed a question about direct mail providers and Transpromo on LinkedIn and got a very spirited response. The question was:

“Is the art and science of using transaction documents as a customer retention vehicle a threat to direct mailers or an opportunity? “

People took various positions, some positing that direct mail service bureaus (DMers) don’t know enough about data to take on transaction documents, others suggesting that transaction printers (TPers) don’t know enough about serving the needs of marketing to take on Transpromo. There seemed to be several consistent themes:

1. The business of marketing on transaction communications is growing.
2. Service providers who can offer both direct mail and marketing on transaction print (essential mail) have a brighter future than those who can’t.
3. Partnering, in the near term, may be the most effective and reliable solution for service providers and their customers.

I’ve included some quotes from the (much longer) LinkedIn thread below. Please join in and share your opinion.

“It should be an opportunity to DM service providers but their fear of effectively managing data makes it a threat for many. Some will steer their way through and then manage the relationships they have with DM customers from whom they can take advantage to deliver true TransPromo applications. Many will shy away from the opportunity and the challenge – for those I fear life will be short. “ James Shand, TriPartum Limited

 “I’m not sure most DMers can make the leap to transactional, let alone TP, which is much more sophisticated. Some can and have, but these are mostly different skill sets. DM firms in general have neither the IT/data sophistication nor the access to the right c-level execs in their customer-companies to get the buy-in and traction required to get the TP ball rolling.

Or spun another way, it would be easier for a transactional firm that does some good TP to expand much more easily into doing DM for its customers. And in that sense TP could be a real threat to DM firms. Now imagine a partnership between a smart DM firm and a smart transactional shop. That’s not a threat. That’s opportunity. “ Noel Ward, Managing Director, Brimstone Hill Associates

 “From a data standpoint, I respectfully disagree that direct mailers are somehow inferior in their data utilization. Show me a TransPromo client who is currently utilizing not only modeling techniques, but then further refining those prospective “buyers” into Deciles 1 – 10? Show me a TransPromo client who is effectively employing Lifetime Value scores for direct mailing and lead generation cross-selling? Show me a TransPromo client truly utilizing household-level data to understand both the attitudinal and the behavioral characteristics of the prospect, then – and then only – crafting the message to that household?

The key to success, from my perspective, is building relationships with partners who have the hands-on experience in developing, implementing, and then measuring every step of the way. “  Mark Weishaar, Direct Marketing Practice Leader at IBM/Ricoh InfoPrint Solutions

 “The key is for those companies who take on the data to have the skill set to manage the data, keep care of the data, and help the clients do more with the data. We find much too often companies who take this role on do not have the required skill set, and while a DM shop may have great skill in doing more with the data, they may lack the skill to take care of the data.

A Transactional Shop and a DM Shop have very different cultures, and having experienced working in both cultures, and attempting to integrate the two, they are both very interesting. It may seem simple enough, but they are typically at opposite ends of the spectrum.

I do see DM shops working on building up to being able to handle Transaction type of work, but it is not just about having nice fancy full color devices, it is about being able to manage the process, and the data.  

And we see Transaction shops working on adding DM capability to help fill in the valleys in production, but they to need to change how they manage the process of bringing work in house.

The change in business culture for DM to start work with TP type applications, even the standard transaction type applications will be too much for some, and it is the same on the other side of the fence, the change in business culture on the transaction side to work with DM type of applications, the cultures are very different, those that can make the transition can be successful, but it is not a simple transition for high percentage of the market.” Kevin Smith, Principal and Founder at Courier10

 “TP can grow as a way to communicate with and market to *existing* customers, but it doesn’t work at all for customer acquisition. That requires other mechanisms, including (really good) DM.

This is why a company that can do both, either internally or with a partner will be in a better position moving forward. Service providers especially must stop thinking of themselves one-dimensionally–that they are a DM shop or a transactional printer. Or even as a TP printer. Yet I see bureaus do this all the time. Success will come to those that can do more for their customers. The ones that don’t are gonna’ go away. “ Noel Ward, Managing Director, Brimstone Hill Associates

I’ll look forward to hearing what The Digital Nirvana community thinks of this topic!

Changes in 2007 to the Australian Superannuation regulation required an update of tax file numbers. Superannuations or Supers are like US IRAs (Individual Retirement Accounts)

Up to 31 July 2007, contributions to retirement funds were taxed at the lowest rate. After this date, if a Tax File Number (TFN) was not recorded on the account, contributions would be taxed at the marginal rate of 45% meaning less of each contribution would make it to the customers account : – bad for customer, very bad for ING since they make their money based on funds under management.

ING’s agency convinced them to use the changes that they were going to have to make in response to this legislation to test the impact of color and personalization.

So they redesigned the statement and created a black and white version and a full color version which were similar in layout.

They created a test group and a control group.

The control group was black and white and generic

The test group was both color and included relevant messaging and personalized imagery so you have to look at the results as a combined effect.

The bottom line is that they drove results directly attributable to the test:

An increase in funds under management of 22.5 million included funds rolled over from corporate plans into their super and new contributions to existing supers

They didn’t have staggering results for collecting Tax file numbers: they got about a 1.16 % response with the control group and a 1.79% response with the test group (but that’s still a 54% better response than the control.)

But the numbers your CFO will really care about are the return on each dollar invested: $111 for the test group versus only $58 for the control group.

I’m ready for purple crocuses and buds on the trees.  Baseball teams are at spring training and here in Boston fans are starting to gulp down the Red Sox kool-aid.  Why shouldn’t 2010 be a winning year?

There are signs that the economy is also coming out of its long winter, but no company I’ve interviewed lately will be spending like Steinbrenner’s Yankees.  The common theme is expense management and the mantra is “do more with less”.  For marketers, it’s a spring to think about spending smart.
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From June to November Xplor hosted 10 XDU On the Road meetings and the topic of Transpromo and multi-media marketing encompassed the discussions.

At a couple meetings we had comments from people that “they were tired of hearing the word Transpromo”. When challenged to come up with a better word, the banter was interesting and fun but the conclusion was “Transpromo” was the best description.
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On the Transpromo Professional Network LinkedIn Group, Elizabeth Gooding President, Insight Forums recently asked, “Do you consider Loyalty Statements to be Transpromo?” She states:

I get loyalty statements in print and online for hotels, grocery chains, credit card rewards and more — yet I don’t see many case studies on these topics (with the exception of Best Western.) These applications have been out there for a long time (all around the world) but I don’t hear a lot of discussion about them. Does anyone have any great examples of these types of statements? Maybe we can pursue those companies for an article and get some case data that way.

Pat McGrew, Data-driven Communication Segment Evangelist at Kodak says, “No question in my mind that the techniques we sometimes attribute to TransPromo – those that use customer data to create an integrated customer conversation – are conducive to loyalty programs!”

Pat shared the success of Australia’s Guardian Pharmacies Plus Points program:

One of the first application trials in Australia was for Guardian Pharmacies Plus Points program. Response rates exceeded 50% when they abandoned the plain statement and separate catalog mailing and incorporated the points statement with targeted offers.

What do you think? Do you consider Loyalty Statements to be Transpromo?

Since the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 was signed earlier this year by President Obama, credit card issuers appear to have focused on squeezing every last dime from consumers before the changes take effect. According to research from the Pew Charitable Trust, credit card interest rates have spiked by an average of 20% on 91% of credit cards with outstanding balances.

While the CARD Act strengthened reforms already considered by the Federal Reserve under Regulation Z, and accelerated the time for adoption, some in Washington feel that it did not accelerate the timeline enough. Representatives Carolyn Maloney (D-NY) who authored the credit card reform bill, and Barney Frank (D-MA), Chair of the House Financial Services Committee, have introduced H.R. 3639, the ‘‘Expedited CARD Reform for Consumers Act of 2009.”  The current legislation calls for some provisions to become effective in February 2010 and others in August 2010. This new legislation would  accelerate the effective date for all of the CARD Act reforms to December 1, 2009. 

 “It’s clear that credit card companies are taking advantage of this period between the signing of my bill and the current effective date,” Rep. Maloney said. “The breadth and depth of the rate hikes happening now point to the need for faster consumer protections. Americans need relief now.” You can read the full text of H.R. 3639 here.

Some industry experts have asserted that advancing the compliance deadlines would be nearly impossible for credit card companies to comply with, given the sweeping changes in systems and products referenced in my previous post Countdown to the CARD Act – Part 2. Others argue that if companies can manage the necessary system changes and mailings to facilitate rate hikes to over 90% of the “card carrying public” in a few months, they can facilitate the changes necessary to change rates less frequently as would be mandated by the CARD Act. 

What do you think?

Over the past year or so, my colleagues and I at InfoTrends have been taking a look at software that enables TransPromo communications. For those that may have attended InfoTrends’ recent TransPromo Summit in Boston or are attending our European TransPromo Summit in October, you know that TransPromo programs can be extremely effective, but most are inherently complex and require ongoing attention and dedication for recurring success. They often require the proper organizational alignment among many departments for execution, including marketing and IT. Even though there are complexities, software vendors in this space have been working to enhance their solutions for ultimate usability and scalability in multi-departmental enterprise organizations.

The TransPromo technology landscape is very broad, and includes many different types of solutions: document creation and composition, message creation and management, post-composition, output management, production management, and campaign management. We decided to focus on enterprise-level document composition solutions with message creation and management components due to the important role they play in empowering multiple organizations within an enterprise to be involved in a TransPromo campaign. The result is a comprehensive (and lengthily-titled) guide to the leading solutions in this space: The Ultimate Guide to Enterprise TransPromo Solutions: Document Composition. While our existing Ultimate Guides have focused on software solutions for the Graphic Arts (W2P, VDP, Multi-Channel), we wanted to explore solutions that enable wide-scale collaboration in the creation and execution of TransPromo programs. (more…)

Last time we talked about ways Océ is helping customers build business with inkjet technology and how market acceptance of digital print quality has changed. Today, in the final installment of this interview, Mal Baboyian talks about how Océ is changing the way it presents itself to the market at big venues like PRINT 09 and gives us a glimpse of what the company will have on display in Chicago.

NW: Océ used to show only its high speed production presses at shows like PRINT or Graph Expo, but at recent shows you often have one or two wide format machines on hand. Why the shift?

MB: Océ has one of the broadest product lines in the industry covering the office, wide format, display graphics, and production printing. But even customers in these segments weren’t always aware of our other offerings and capabilities and didn’t necessarily think of Océ when they needed a different type of equipment. Having a wider range of equipment at shows strengthens our brand by showing the full scope of our offerings and helps position Océ as a leader in more segments of the printing market. We also share some technologies across the different divisions of the company and are always looking for ways to leverage what we know. As I mentioned, our inkjet experience in wide format aided us in developing the JetStream family. Many of our customers had no knowledge of Océ’s breadth of solutions in the office, production printing and wide format segments. And many of them have needs in more than one segment .
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As we saw in part three of this interview, Océ’s history in both toner-based and inkjet printing gives it good credibility as it rolls out its new inkjet systems. Still, for most print service providers, having equipment with a lot of capacity is only part of the equation. That capacity needs filling and profitability is still a basic business requirement. So, I asked Mr. Baboyian, what does Océ do to build capacity and help print providers get a bigger share of their customers’ wallets?

NW: OK. This is all good, and many printers I talk with see inkjet as having a lot of potential. But the thing they all say concerns them is being able to fill up a significant portion of the capacity of these machines. How is Océ addressing this and helping customers make the transition into inkjet?

MB: That’s a great question, and it really all comes down to applications and the importance of printers understanding their customers. When we first introduce a customer to the JetStream line we learn about all the applications they are running, who their customers are, and look for all the applications that make the most sense to print on a JetStream. For example, we know there are many jobs, especially in direct mail and transactional shops, that require preprinted forms. We’ve done the math, so we know that simply shifting these forms to inkjet adds a lot of volume to the press and will save the printer’s customer a lot of money. But as you know, that can a difficult conversation for some printers to have with their customer. So we provide the support our customers need when they introduce JetStream to their customers. We can help to explain the technology, answer questions, and show them, based on their current printing costs, how eliminating pre-printed forms can make a substantial difference in their business.
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In the second part of this interview we heard more details about Océ’s new JetStream 1000 inkjet press, how it fits into the market, and about print quality on inkjet systems. In today’s installment, Mal Baboyian talks about how Océ, with its legacy of toner-based printing is making the transition and commitment to inkjet.

NW: Mal, most people probably don’t think of Océ as having a history in inkjet printing, yet you’ve introduced several models of the JetStream family in a bit over a year and a half. But you haven’t done this on your own. Tell me about the alliance with Miyakoshi that has led to the JetStream line.

MB: Let me answer that in a couple of steps. First, Océ actually has developed a lot of inkjet technology and provided innovation and industry leadership in a number of markets. Our first inkjet products came to market almost 15 years ago. The wide format side of the company has been very successful and has the leading market share in some segments of wide and superwide format printing. Some machines, like the Arizona line of flatbed printers that can also print roll-to-roll, have won awards for innovation and quality. Last year at drupa I’m sure you saw our CrystalPoint solid toner technology which can be jetted onto a wide variety of substrates. At GraphExpo 2008, the Océ Colorwave 600 with Océ CrystalPoint technology won a Must See ‘Em award and this product has been recognized once again for PRINT 09 with a Must See ‘Em Encore award. Océ R&D developed and we manufacture these products. Of course, these wide format machines address a different market and at lower speeds than a production press, but the underlying knowledge of inkjet technology, chemistry, color, and material science has been very instrumental as we developed the JetStream family.

Second, our relationship with Miyakoshi is very much a strategic alliance that draws on the strength of both companies. Miyakoshi is a well-known offset press manufacturer that was developing an inkjet technology. We’ve brought our expertise in inkjet, color management, controllers, security, and error recovery systems for high-speed, high-volume digital printing. The win-win is that JetStream is built like a press for heavy duty use, our SRA MP [Massively Parallel] front-end can handle every aspect of the data in full color, and can be easily integrated into any PRISMA-based system as just another print engine.
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The clock started ticking on May 22, 2009 when the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act was signed by President Obama. It is a landmark piece of legislation that provides American consumers with stronger protection against unfair credit practices than previously imposed by the Federal Reserve under changes to Reg Z and Reg AA. It also gave issuers less time to comply than the Fed: the first date for compliance is this month, only 90 days after the law was passed. Tick. Tick. Tick.

On August 20, 2009 the first provisions of the CARD Act go into effect. By this date, card issuers must have made the changes necessary to ensure that:

• - Cardholders have a minimum of 21 days to pay their bill;
• - Cardholders receive 45 days’ advance notice of significant changes to their card agreements;
• - Notice is provided that cardholders have a right to opt out of significant changes in their account terms, including interest rate and fee increases, as long as they are not more than 60 days overdue on their payments.

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In recent video interview Cary Sherburne, Senior Editor at WhatTheyThink as digital printing guru Roger Gimbel of Roger Gimbel & Associates if TransPromo is real. Here’s what Roger had to say:

What do you think? Is TransPromo real? Is TransPromo a service offering any printer can provide to customers?