• What does marketing (your customer) value?
• What creates value for the organization producing the document?
• What does the end-recipient of the document (your customer’s customer) value?

If you can understand and deliver value for all three of those groups, Wow! What an offer!

TransPromo, which involves leveraging transaction data to deliver relevant, personalized customer communications, provides this opportunity. The capability to add relevant marketing content to transaction documents, such as statements, invoices, and electronic payment notifications, is tremendously valuable to marketing because it allows the marketing budget to be used more efficiently and, in many cases, more effectively. For example, TransPromo can:

• Replace direct mailings to customers by leveraging campaign content on the transaction document
• Reinforce and promote campaigns delivered via other channels (see our new ad on MTV! Visit our website for the latest discounts!)
• Generate improved response rates and develop stronger customer relationships by making offers that are relevant to each reader and delivering “point-of-need” content triggered by customer data

If want to read the rest of this article and for more like it, visit www.OceWow.com to download the July Newsletter!

 TransPromo communications take a standard bill or statement and add meaningful marketing messages — in other words, integrating a TRANSactional document with proactive PROMOtional marketing. The changes in postal rates and technology have created an environment where TransPromo makes good business and economical sense for many companies. TransPromo can be implemented in black and white, yet enhancing a statement or bill with color can significantly enhance response. These formerly routine documents can help you sell additional products and services and build brand loyalty.

 Study after study shows that statements command the most attention among many other common forms of customer communications. With so much attention paid to this document every month, there is huge potential to communicate directly with each customer on a “one-on-one” personal level.

 Through the use of targeted, personalized statements, DST Output has helped customers unleash the power of this opportunity and created deeper, more meaningful relationships with their customers. Cheryl Kananowicz, Vice President and Dave Smith, Operations Manager share how DST Output does it.

Whether or not the “TransPromo” term sticks around is not really of my concern; what I can say with great confidence is that it’s happening today, especially in the electronic/digital world, and it’s only going to grow over time. Why? There have been a number of recent developments and announcements that highlight how transactional data is being analyzed and utilized to drive highly-targeted and relevant messaging, with many signs pointing to increased investment in this area in the near future:

• A number of companies are either starting up or creating new offerings that enable real-time digital transaction- and behavior-based marketing. Cardlytics is a provider of inline targeted advertising for financial institutions and currently partners with the likes of Fiserv and others to deliver coupons, rewards, and ads to recipients. CLOVR Media promotes a similar offering that it calls “Card Linked Offers”, which are tied in with financial institutions’ loyalty programs. Cartera provides eCommerce solutions to industries that have loyalty programs and is also getting in the game with analytics-driven digital marketing and offer management services.
• Online consolidator services that help consumers aggregate their online financial accounts and provide tools for tracking and budgeting (e.g., Mint.com, Pageonce, etc.) are becoming more popular due to ease-of-use and value delivered. These offerings have access to thousands of peoples’ consolidated transaction information and the companies that run them are using this data to deliver targeted, relevant messaging, marketing, and advertising to users.
• Last week, Google announced its foray into the world of mobile payments with “Wallet”, a service that leverages up-and-coming Near-Field Communications (NFC) technology embedded in smartphones to enable “contactless” point-of-sale payments at retail merchants. What does this mean for Google? The ability to access, mine, and analyze your transaction data virtually in real-time, enabling them to deliver targeted, relevant marketing and advertising, including coupons, loyalty reward points, and more. It’s highly likely that Google will implement a marketplace where advertisers of all sizes conduct real-time ad buys to instantly reach users.

Many of these developments are happening strictly on the digital technology side, but I still consider the application to be of the transpromotional variety. Furthermore, I believe that these developments, despite being digitally-focused, will ultimately bode well for print communications. Many of the issues that have plagued the push toward achieving TransPromo for print communications, including organizational alignment and technology infrastructure, may receive a thrust toward resolution with the new era of real-time transaction-based messaging, marketing, and advertising being touted by the likes of Cardlytics, Google, and others.

There’s a wealth of information that can be gleaned from this type of data, and if pure-play digital tech innovation is the catalyst for increased use and awareness across all channels, I’d say that’s step in the right direction.

Bare Deal co-founder, Glen Andrianov, explains through an example. ”This week, we are  featuring the company, Chocolate for Your Body. Anybody who signed up for Bare Deal is able to select this specific deal on our website. A scratch off-card for Chocolate for Your Body is then sent to the person’s mailing address.”

Put another way, this is the process:

• The consumer hears about the service via Twitter, Facebook, word of mouth, or opt-in email and goes to the Bare Deal website, and “signs up.”
• The consumer who wants to explore a deal, registers for that deal.
• Bare Deal digitally prints and mails the consumer a scratch-off coupon featuring a 40- to 100-percent discount, branded with the business’ info.
• When ready, the consumer takes that coupon to the business and redeems it.

Because the recipient asked for the coupon, the open-rate is high. But there’s another – some might say better – reason to open that envelope immediately. Consumers don’t know precisely how big their discounts will be until they scratch-off in the privacy of their home. The discount could be a healthy 40%, or the discount could range up to 100%.

Andrianov says consumers have fun with the coupons. “Instead of a product focused only on savings (Groupon and competitors), our scratch cards provide variable savings, which create excitement – consumers are ‘winning’ a discount.”

Couponing is huge in the Windy City (as this Chicago Tribune article notes) so there’s plenty of competition. But coupons enjoy impressive marketing acceptance, too. So how does Bare Deal differentiate and market its coupons? Andrianov says the company set out to create a service people would love and drives traffic to the website mainly through word of mouth and social media (Facebook and Twitter). “Also, members pay businesses directly, which helps foster loyalty between consumer and their business.”

Lynford Morton, owner of PhotoTour DC, a company that teaches photography on walking tours around Washington, DC, would concur that business access to consumers is critical, but also missing in most coupon arrangements. Morton, who has a lot of experience with coupon marketers, says, “I get pitched by these coupon companies all the time. They all claim some novel differentiator…which really turns out to be yawn-inducing. Every now and then I get a couple smart ones who want to talk to me about where my pain points might be with the daily deals of the world and how they might address them. Others bring me solutions to problems I don’t have. If I understand the Bare Deal approach correctly, this business solves one huge problem by letting you communicate with your customers. To know 600 people bought your product, but you can’t communicate with any of them is nuts. Giving a business owner direct access is huge.”

Andrianov agrees. “Businesses prefer us over competitors because they are able to put their brand identity on a physical product, compared to a black-and-white printed piece of paper with no brand identity.”

Customers must love the pay-as-you-go arrangement, too? I mean who doesn’t have at least a few coupons already paid for, but unredeemed sitting in a folder somewhere? Guilt! Angst! Pressure! Ah… relief!

The delivery of branded, redeemable scratch-offs can happen only one way: via direct mail. “Because we provide a physical product that can’t be printed on a computer, we use direct mail .. This process allows us to send scratch cards only to members who are interested in a specific deal … If a member does not select a deal, they will not receive anything in the mail.”  

In short, Bare Deal’s innovative merger of a pay-when-you-use-it-only coupon with the thrill of a strike-it-rich scratch-off should add up to a model with promise.

As Netflix already proved, the U.S. mail has its advantages. In fact, some people would argue that the U.S. Postal Service made Netflix successful. So, yes, it’s good to see smart marketers still working the direct mail angle.

. . . Or maybe I should be saying Marketers Take Your Mark. Either way, I’m seeing example after example of why printed communications need to become increasingly nimble to stay relevant in the marketing mix. I was inspired by a recent post from Pat Allen of Rock the Boat Marketing (and by the Old Spice Guy video embedded in the post)

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According to Pat, “the tilt toward real-time communicating exposes what we believe to be the greatest weakness in investment product communicating: Reacting after the fact and on a delay.” While she is looking at the asset management industry through a marketing lens – you could easily point that same lens at print service providers and in-house shops. “The Old Spice guy work is an excellent demonstration of an emerging communications competency: the preparing to improvise, the organizing to be able to react in the moment to external stimulus,” says Pat.

Old Spice Guy says “Now I’m on a boat. Look in your hand. Look back at me. Now I’m on a ship. Look at your man. Look back at me. I’m on a horse.” Can your communications shift that quickly – and look that good doing it? (Phew!)

There have been several posts recently about combining print and other digital marketing channels. Most frequently referenced is putting PURLs on direct mail. You know what? That’s already old hat. PURLs provide an additional channel for the recipient, which is good, but it is not necessarily preparing the marketer to be able to  react quickly to external stimulus from social media sites, breaking news or other market activity.

We need to enable our print campaigns to launch on a dime in support of trends gleaned from online activity. Of course, we will want to communicate with people who are already online through online means – but why not extend the learning to be able to launch the same great message to the customers we know don’t use our online channels? Or simply reinforce the online message with a tangible printed campaign?

Allen cites a social media presentation by Matthew Guiste, category manager for social media at Starbucks and successful revenue-generating programs that involved a rapid exchange of information, internally and externally. Starbucks identified mini-trends from activity on Facebook and Twitter and worked quickly to syndicate that content across multiple other social media outlets. They could also have launched a direct mail campaign – but sadly – with the response times of most organizations today – not fast enough to ride the wave of the current trend.

For direct mail (and transactional communications) to gain a broader piece of the “social media response” pie it will need to be faster and more collaborative with what is now a social media silo. If the collaboration and rapid publishing tools can be put in place – with workflows that link social media monitoring, analytics, content management, approval and production approvals – social media can be a great friend to digital printing rather than a competitor.

So, look at your social media channels. Look back at me. Look at your direct mail. Look back at me. Anything is possible. I’m on a plane (Seriously, I am.)

For card issuers already struggling with portions of the Act that go into effect this week (see Countdown to the CARD Act Part One) the clock is ticking to get all of these changes designed, coded and tested in advance of the February 2010 deadline. I’ve summarize the key content and formatting changes to each type of document below.

Credit Card Applications and Solicitations are currently required to disclose key costs and terms in a table commonly known as the “Shumer Box. “The CARD Act makes changes to the terminology intended to improve consumer understanding, such as requiring that issuers use the term “penalty rate” to describe the increased rate that may apply if a consumer is more than 60 days late with a minimum payment. The CARD Act also prevents issuers from including detailed information about the calculation of variable rates, which research has indicated consumers do not use in comparing credit card offers. The new box must also include a reference to the Federal Reserve website on consumer credit education and Annual Percentage Rates (APRs) must be shown in 18 point type.

Account-Opening Forms must also be modified to include the same or similar information as required for applications and solicitations. Currently, the required disclosures on these documents are interspersed with the legalese of credit agreements. The CARD Act requires creditors to provide a table summarizing the key terms to consumers at account opening. This new account-opening table is substantially similar to the modified “Schumer box” described above. Not surprisingly, consumer testing indicated that consumers tend not to read disclosures that are in small print and dense prose, but generally are familiar with the table on applications and solicitations. Maintaining consistency between solicitations and account opening documents is also, intended to make it easier for consumers to compare the terms of the offer for which they applied with the terms that they receive.

Change-in-terms Notices, whether mailed separately or included with the statement, are subject to new formatting requirements. Specifically, creditors must disclose changes in key terms in a summary table to enhance the effectiveness of the notice and maintain consistency with the Application, Solicitation and Account Opening documents.

Statements and Bills will require the largest amount of redesign and are likely to be at least one half page longer on average. The CARD Act requires that several new pieces of information be added to the bill:

• - A late payment warning is required to notify the consumer of the implications of late payment including the potential for triggering a penalty interest rate and late fees. The exact amount of the late fee and penalty APR must be listed. This warning must be located close to the payment due date and minimum payment amount on the bill.
• - A minimum payment warning is required to notify the consumer of the implications of making only the minimum payment. The warning must include an example indicating how many years it would take to pay off the balance by paying the minimum and a toll-free number for customers to get additional details about their accounts.

Changes have also been specified to formatting and terminology requiring that creditors group costs together and identify them individually as interest charges or fees rather than lumping them together in an “Effective APR.” They must also disclose year-to-date totals for interest charges and fees.

Key payment information such as the date a payment is due must be shown on the front of the monthly statement. The payment information must include both the due date and the number of days in the grace period.

Any changes in the terms of the credit card agreement must be included in a table on the monthly statement along with the effective dates of those changes. Key changes to be disclosed include increases in APR after the promotional period expires, triggering of penalty APRs due to late payment. Since under the law, new APRs cannot be applied to previous balances, the previous APR (with effective dates) must also be shown on the statement going forward as long as there are any balances subject to that rate. The specific APRs, fees if applicable and effective dates must be summarized in table form as well. The requirement to individually identify each rate and the balance it applies to is one of the key elements expanding the length of the statement.

In addition expanded information on interest rates applied, there are requirements to “do the math” for customers showing the dollar value of fees and interest for the current period and year-to-date. Fees must be broken out from transaction and listed in an individual section with a total that ties back to the account summary. Interest charged during the period must be itemized in an individual section with a total that ties back to the account summary (individual items would include Interest on purchases, interest on cash advances, interest on balance transfers etc.)

Separately from the dollar amount of interest, the statement must include a section, which shows the calculation of each individual APR applied to balances on the account with an indication of whether or not the rate is variable. The section must show the type of balance the rate is applied to, the APR (and variable indicator if applicable), the balance subject to the interest rate and the resulting interest charge for that type of balance. This information must tie back to the Interest Charged section.

While these changes have been forced on the credit card issuers, the result will be more effective and transparent communications. Once all of the mandated information is added to these documents, reorganized and stated in plain language – the door is open for white space management, relevant personalization, and transpromo messaging. There is a lot of work to do before February, but there are tremendous opportunities to move beyond compliance to make the mandated redesigns a profitable proposition.

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.

These provisions will have significant benefits to cardholders and will require extensive systems and programming changes for card issuers, but they pale in comparison to what’s in store for 2010.  By next year, the CARD Act will fundamentally change the way credit card issuers advertise, market, and bill credit cards. The majority of these changes will need to be in place in little more than 6 months, only 9 months from passage of the law. Tick. Tick. Tick.

 Beginning in February 2010, the CARD Act entails changes that impact what card issuers can charge, who they can charge and how and when those terms are disclosed. The overarching theme is “Plain Language and Plain Sight” and affects the layout of every solicitation, application, notice, and periodic statement delivered to consumers. The Federal Reserve has been tasked with providing model disclosures, which are to be updated regularly, based on government-sponsored reviews of the market, empirical research and direct consumer testing.

In addition to disclosing terms, card issuers are required to provide information to consumers on the consequences of their financial decisions such as how long it would take to pay off the existing balance, and the total interest cost if the consumer paid only the minimum due each month. In addition, all terms and contracts must be made available online for easy comparison and monitoring.

 What’s at stake for card issuers and banks? An estimated 15 billion in annual revenue from late fees alone, the cost of retrofitting existing contracts and communications while issuing new (more profitable) products and the cost of lobbying against additional reforms likely to be imposed on the lending industry.

What’s at stake for service providers? Potentially a one-time opportunity to help your customers gain efficiencies by introducing them to new marketing techniques such as transpromo and relevant personalization that can make all of their documents more efficient and effective.

Card issuers are challenged to analyze, redesign and reprogram each of their marketing and customer communications over the next 6 months. Are you ready to help? Tick. Tick. Tick.

 (Stay tuned for the next post covering changes to individual communications mandated by the CARD Act of 2009)

Our customer and their customer are engaged in a long term project to integrate variable promotional elements in their transactional messaging. The variability is based on both the consumers’ buying habits and some very sophisticated demographic segmentation. Our customer’s customer is delighted with the results and has no intention of going back to the old way of doing things. In fact, they want to double the volume again in the next 6 months.

TransPromo involves a complete redesign of a company’s entire messaging structure. Corporations do not invest the kind of money it takes to stand up a serious TransPromo project lightly, e.g., $100K in software, $150K in professional services, $XXK in document redesign, etc… These projects are not for the faint of heart. They require a solid C-Level commitment These are marketeers that are convinced that they will generate the kinds of increased top-line revenue that these implementations have been proven to produce. Notice that I said top-line revenue not bottom line cost savings. TransPromo is a money maker. These implementations are developed by professional marketers and mathematicians who apply sophisticated strategies and arcane analytical measurement tools to guide them at every step.

Let’s touch just quickly on validation. The statistics that we all learned in undergrad Stat 301 (and quickly forgot) are woefully inadequate to conduct a proper inquiry into success metrics. TransPromo is first and foremost a data driven environment. Instincts, hunches and marketing experience are incapable of cutting through the noise, finding the actionable data, and linking the correct recipients with the relevant offers. The truly effective programs begin with clearly defined business objectives that typically come from the Marketing department, e.g., improving back-to-school sales, cross selling additional services, launching a new product, increasing the lease renewal rate, blowing out under performing inventory, etc.. [Hint: cost reduction is hardly ever a sufficient reason for TransPromo]

The final result is called Behavioral Targeting and gets much of its horsepower from integration with CRM systems to provide the necessary 360 degree view of the customer. Add the insights provided by CRM to a well conceived business objective and you have a potent revenue generating marketing program.

You will know you are ready for TransPromo when basic mathematical marketing concepts like net promoter scores, RFM, CART, CHAID, LTV and brand equity come like second nature to you. Just remember back to one of the basic tenet of Six Sigma: if you can’t measure it, you can’t improve it.

Finally, our experience at Océ has shown us that companies that engage in TransPromo on a large scale basis do not want to talk about it and they don’t want us to talk about it. Non-disclosure agreements are always part of the deal when we help a customer implement one of these programs. We beg them to allow us to do case studies, but it never happens. They think of these projects as highly proprietary in nature. They think of them as the competitive advantage that gives them the edge in winning new customers and retaining their old ones. The word “system” doesn’t even begin to describe what really goes on. These implementations are environmental by their very nature and affect practically every aspect of a company’s structure.

After months of preparation the first trial run will a test that is limited in scope – one of many – and it will be run time and again. It will be constantly analyzed, revised, and refined. The willingness to keep going back to evaluate the process over and over again is implicit in the design and implementation process. To abandon something with that kind of scope after just one outing is ludicrous.

So, when I read that Heidi says 1:1 print jobs are seldom repeated I am really not too terribly surprised. Without the underlying C-Level commitment, professional design, data modeling, and the exhaustive analytics these 1:1 print jobs are destined to be one-offs. Variable data printing continues to evolve but when we compare 1:1 and TransPromo we see two different markets, two different kinds of print jobs and, two different marketing models driving them.

According to an article I recently read by InfoTrends, 63% of customers prefer promotional pieces over purely transactional documents. For this reason, “incorporating promotional messaging in transaction documents can both boost the appeal of a transactional document and generate a higher read rate for the marketing message.”

When I read this, I had to stop and think about that again. Putting a promotional message on a transactional document can “generate a higher read rate for the marketing message.” On the surface, this makes sense. Use something people like more (promotional messages) to boost readership of something people like less (transactional documents).

But as usual, I had to re-think it in a contrarian way. You are hitching the more desirable (the marketing message) to the less desirable (the transactional document). In some ways, you could argue that, by doing so, it’s like putting flat tires on a sports car. Of course, you could argue the other way, too, and that’s what is being done here. Bills have nearly a 100% open rate. You can’t say that about most direct mail, even highly personalized direct mail. By attaching the marketing message to the transactional document, you are increasing the chance of eyeball exposure.

I guess what struck me was its over-simplicity. As analysts and consultants, we are prone to blithe and pithy statements that make great pull quotes. But we need to be careful not to over-simplify.

I mean, another way to put this is that, if you’re talking about transpromo credit card statements, for example, and if credit card statements irritate people (which they do), you’re hoping that your marketing message catches the coattails of something that people fundamentally don’t like and that irritates them. Those marketing messages better be cheap to add!

It’s just another way to look at it. I’ll be available for tomato throwing later