E-Delivery in 2010 and Beyond

Prepared for: Xplor




                                 Presented by:
                    ...
Agenda
   Time        Session                                 Facilitator
12:00 – 1:30   Introduction / eDelivery Market S...
About us


    Madison Advisors provides
  thought leadership, strategic
consulting, and market research
 to clients in th...
Madison Advisors’ Background

 Assist organizations with document strategies –
  print and electronic – including selecti...
Best Practices Analysis (BPA) Objective
   Identify best-in-class organizations
   Independently evaluate a wide variety...
BPA Participants




                   MADISON | ADVISORS
Document Trends


   79% of BPA firms utilize
    mainframe-based
    document layout and
    composition systems

   On...
Results…




           MADISON | ADVISORS
Results…
       6.0
             COST   TECHNOLOGY        OPERATIONAL EFFICIENCY   STRATEGY   ORGANIZATION



       5.0

...
Online Trends                              *




December 2009 survey: 74% of American adults use the internet.
Percentage...
Multi-channel Delivery

63% of enterprises have established
  moderately to very aggressive
   hardcopy suppression goals....
2009 Multi-Channel Market Study

 A new study; GA in Nov 2009
 To expand our understanding of the
  actual print suppres...
Market Sizing

The bulk of mail volume consists of transaction
documents and direct mail
   Transaction documents – state...
Situation Assessment
   Every firm (27) surveyed by Madison Advisors has a
    customer communications strategy (77% have...
Multi-Channel Trends – Part One

USPS* reports FYE 2009:
   Lost $3.8B, after 2008 loss of $2.8B
   1st class mail down ...
Multi-Channel Trends – Part Two

USPS* reports:
    Type               Revenues                   Volumes
 First Class    ...
Multi-Channel Trends
      Green Movement gaining momentum
      1) Firms now offering Green incentives
      2) Firms at...
Situation Assessment
    Significant transactional volume migration by those
     clients pushing “e”
             Retire...
Adoption Techniques

     Organizations
      are looking for
      ways to entice
      paperless
      adoption




3/1...
Adoption Techniques

Some
techniques
work better
than
others…




3/18/2010             MADISON | ADVISORS   22
Adoption




Source: EDSf , Effective Color Gamut Transpromo, 2008

        3/18/2010                                     ...
Multi-Channel Trends

February 2009




3/18/2010              MADISON | ADVISORS   24
About the Survey Set
                                                                   Annual    Envelopes   Number of
  ...
Key Trends & Drivers
   Reducing postal spend is the # 1 driver across all
    verticals
                               ...
Key Trends & Drivers
      Summary of key drivers by vertical for print
       suppression (average scores)
      Scores...
Key Trends & Drivers
   Web-based promotion and intervention is the # 1
    mechanism for converting customers to paperle...
Print Suppression Goals




                 63% have established
                 moderately- to very-
                 a...
Market Sizing – Suppression Impact
Opportunity
    In 2008, Madison Advisors estimates the North American
     market for...
Strategy




3/18/2010   MADISON | ADVISORS   31
Outsourcing
   Do you plan to work with outsource providers for
    your e-delivery and e-messaging programs?

          ...
Documents Online




3/18/2010          MADISON | ADVISORS   33
Messaging Methods & Effectiveness




                   SCALE
                   Company Usage: 20% increments
          ...
Impacts to Industry
           Declining hardcopy volumes
           e-Delivery demand likely to outstrip demand in
    ...
Internet Adoption                                        *




Formally an
inhibitor of e-
Delivery
solutions,
Internet Ad...
TransPromo Future?

                  Suppression Impact on Transactional Print Volumes
   100%

   90%

   80%
          ...
Future Studies
   Extend research
           N. American Round 2 – Launch June 2010
           Western Europe – Launche...
www.madison-advisors.com




                     MADISON | ADVISORS
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E Delivery In 2010 & Beyond Session 1 2010 03 16

  1. 1. E-Delivery in 2010 and Beyond Prepared for: Xplor Presented by: Kemal Carr, EDP March 16, 2010 1
  2. 2. Agenda Time Session Facilitator 12:00 – 1:30 Introduction / eDelivery Market Study Kemal 1:30 – 2:15 Solimar’s Easy-TP case study Barry Key 2:15 – 2:30 Break 2:30 – 3:30 PFG TransPromo & Multi-Channel Kemal 3:30 – 3:45 Break 3:45 – 4:40 TransPromo & ECM Market Studies Kemal 4:40 – 5:00 Q&A – wrap up All 5:00 Happy Hour All MADISON | ADVISORS
  3. 3. About us Madison Advisors provides thought leadership, strategic consulting, and market research to clients in the CCM, electronic delivery, and print industries. MADISON | ADVISORS
  4. 4. Madison Advisors’ Background  Assist organizations with document strategies – print and electronic – including selection and evaluation decisions  Objective expertise – we do NOT sell hardware, software, or integration services  Analyst firm behind industry-renowned Best Practices Analysis (BPA) Study  Ongoing research across a variety of markets:  Customer Communications  Campaign Management Management  Document Composition  Print Suppression & Multi-  TransPromo Channel Delivery  EOMS & Workflow 3/18/2010 MADISON | ADVISORS 4
  5. 5. Best Practices Analysis (BPA) Objective  Identify best-in-class organizations  Independently evaluate a wide variety of solution providers  Establish an industry benchmark  Establish relationships and gather current data for other client engagements 3/18/2010 MADISON | ADVISORS 5
  6. 6. BPA Participants MADISON | ADVISORS
  7. 7. Document Trends  79% of BPA firms utilize mainframe-based document layout and composition systems  Only 15% of in-house BPA firms have digital color capabilities MADISON | ADVISORS
  8. 8. Results… MADISON | ADVISORS
  9. 9. Results… 6.0 COST TECHNOLOGY OPERATIONAL EFFICIENCY STRATEGY ORGANIZATION 5.0 4.0 3.0 2.0 Best Practice 1.0 Average Company XYZ 0.0 3/18/2010 Madison | Advisors MADISON | ADVISORS 10
  10. 10. Online Trends * December 2009 survey: 74% of American adults use the internet. Percentage that “Do any banking online” : 57% 3/18/2010 *http://www.pewinternet.org/Trend-Data/Online-Activities-20002009.aspx MADISON | ADVISORS 11
  11. 11. Multi-channel Delivery 63% of enterprises have established moderately to very aggressive hardcopy suppression goals. 3/18/2010 MADISON | ADVISORS 12
  12. 12. 2009 Multi-Channel Market Study  A new study; GA in Nov 2009  To expand our understanding of the actual print suppression rates, identify lighthouse verticals / applications, and validate the techniques that are driving those successes  To better understand organizational and consumer behaviors around hardcopy suppression, highlight key trends, and capture document owner and operations behavior, beliefs, and future intentions 3/18/2010 MADISON | ADVISORS 13
  13. 13. Market Sizing The bulk of mail volume consists of transaction documents and direct mail  Transaction documents – statements, invoices, evidence of coverage, contracts, proposals, trade confirmations, 401K or other retirement documents, brokerage account information, insurance policies, and checks  Direct mail – a type of advertising medium in which messages are sent to target customers through the mail to elicit some action, such as making a purchase, making a donation, or to taking an action such as voting 3/18/2010 MADISON | ADVISORS 15
  14. 14. Situation Assessment  Every firm (27) surveyed by Madison Advisors has a customer communications strategy (77% have formal, documented strategies; 23% informal)  Overall e-suppression rates for are generally below 10% today (Dalbar: 65% of financial services firms are < 10% adoption)  Majority of firms have five-year suppression rate goals of 26 - 50%  The “Why” is obvious…the savings are BIG (i.e. Financial Services $12 - $15 per customer per year for print/mailing of statements / confirms / tax reports) No Five-Year 8-12% 17-25% 26-50% 51-75% Goal Banking & 17% 65% 17% Credit Cards Financial 50% 33% 17% Services Insurance 17% 50% 33% Utilities & 22% 44% 34% Telcos 3/18/2010 MADISON | ADVISORS 16
  15. 15. Multi-Channel Trends – Part One USPS* reports FYE 2009:  Lost $3.8B, after 2008 loss of $2.8B  1st class mail down 8.6% YOY  Standard mail down 16.5% YOY Revenues decline 9.1% for 2009 “A significant portion of the 2009 loss is attributed to the unprecedented decline in mail volume… there is some evidence that the recession has accelerated the diversion of First-Class Mail” “37% Decline in 1st Class volumes in next 10 yrs” “$238 B shortfall during the next decade” 3/18/2010 * http://www.usps.com/financials/_pdf/annual_report_2009.pdf MADISON | ADVISORS 17
  16. 16. Multi-Channel Trends – Part Two USPS* reports: Type Revenues Volumes First Class 53%  35% 47% Standard 26% 47% Revenues “Although the volume decrease in 2008 was significant, the price increase held revenue flat compared to 2007.” 3/18/2010 *http://www.usps.com/financials/#H6 MADISON | ADVISORS 18
  17. 17. Multi-Channel Trends  Green Movement gaining momentum 1) Firms now offering Green incentives 2) Firms attempting second subscription wave – new accounts default to paperless  Archiving concerns diminished 1) Firms holding multiple years of historical documents 2) Timeliness of paper statements questioned  Affluent, mobile, HNW customers recognize paperless benefits  Insurance firms equate with lower risk!! 3/18/2010 MADISON | ADVISORS 19
  18. 18. Situation Assessment  Significant transactional volume migration by those clients pushing “e” Retirement Services made an aggressive push (forcing users to decline e-adoption at every log in), year-over-year statement envelope counts are down 71% Implemented a $2 customer fee for paper, year-over- year statement envelope counts are down 13% Ran a traditional opt-in campaign, year-over-year statement envelope counts are down 10% (1) implemented employee suppressions, reducing statement envelope volumes by 8,000, (2) moved towards a statement with 50% less images (“at-a-glance” statement) 3/18/2010 MADISON | ADVISORS 20
  19. 19. Adoption Techniques  Organizations are looking for ways to entice paperless adoption 3/18/2010 MADISON | ADVISORS 21
  20. 20. Adoption Techniques Some techniques work better than others… 3/18/2010 MADISON | ADVISORS 22
  21. 21. Adoption Source: EDSf , Effective Color Gamut Transpromo, 2008 3/18/2010 MADISON | ADVISORS 23
  22. 22. Multi-Channel Trends February 2009 3/18/2010 MADISON | ADVISORS 24
  23. 23. About the Survey Set Annual Envelopes Number of Participants Revenue Mailed Accounts Bank of America 20MM $15M 83MM Banking & Credit Cards BB&T | CapitalOne to to to 22% of Respondents Citizens Bank | HSBC $10B+ 420MM 40MM A top-ten commercial bank Financial Services Charles Schwab (investment houses, $500MM 30MM 3MM Fidelity | ING broker/dealers, & asset to to to management firms) Pershing | The Principal $10B+ 500MM 80MM UBS 22% of Respondents Insurance Aetna | Allstate $5B 75MM 3MM (property & casualty, life, health, American Family to to to & annuities) Nationwide $10B+ 300MM 17MM 22% of Respondents Progressive | USAA American Electric Ameren | Entergy 1MM $20M 1.5MM Utility and Telco MidAmerican | NSTAR to to to 34% of Respondents Pepco | SCANA $10B+ 278MM 16MM Verizon WE Energies 3/18/2010 MADISON | ADVISORS 25
  24. 24. Key Trends & Drivers  Reducing postal spend is the # 1 driver across all verticals  Reducing postal spend was an average 4.9 out of a possible 5.0  Generally, “soft” drivers, such as customer experience and green initiatives, ranked much lower than “hard” drivers  Utilities and telcos (a survey segment dominated by energy utilities) gave the 2nd lowest score to USPS Rate Hikes and Reduce Postal Spend 3/18/2010 MADISON | ADVISORS 26
  25. 25. Key Trends & Drivers  Summary of key drivers by vertical for print suppression (average scores)  Scores are based on a scale of 1-5 where 1 = “Not Important” and 5 = “Very Important” Reduce Reduce Improved Other UPS Rate Add’l Resource Customer Customer Postal Operations Green Hikes Requirements Experience Preference Spend Cost Movement Financial Services 3.6 2.6 3.6 4.25 4.8 3.6 3.2 Banks & Credit Cards 4.25 3.25 4.25 3.75 5.0 4.5 4.25 Insurance 4.5 3.5 4.0 4.5 5.0 4.5 3.5 Utility and Telco 4.0 4.25 4.5 4.25 4.75 3.5 4.0 3/18/2010 MADISON | ADVISORS 27
  26. 26. Key Trends & Drivers  Web-based promotion and intervention is the # 1 mechanism for converting customers to paperless  Telephone interaction (call center, broker) is effective  New account signup is the most effective point to enroll customers in paperless programs  “Green” programs are effective, although potentially short-term, drivers for consumer conversion 3/18/2010 MADISON | ADVISORS 28
  27. 27. Print Suppression Goals 63% have established moderately- to very- aggressive suppression goals. 3/18/2010 MADISON | ADVISORS 29
  28. 28. Market Sizing – Suppression Impact Opportunity  In 2008, Madison Advisors estimates the North American market for TransPromo printed in full digital color to be 19.3 billion impressions; our forecast is for this to grow to 40.9 billion impressions by 2012  Monochrome TransPromo images available for full color transfer are estimated to be over 200 billion! 3/18/2010 MADISON | ADVISORS 30
  29. 29. Strategy 3/18/2010 MADISON | ADVISORS 31
  30. 30. Outsourcing  Do you plan to work with outsource providers for your e-delivery and e-messaging programs? Overall 57% of companies are either already in- house or planning to significantly REDUCE outsourcing over the next 12-24 months 3/18/2010 MADISON | ADVISORS 32
  31. 31. Documents Online 3/18/2010 MADISON | ADVISORS 33
  32. 32. Messaging Methods & Effectiveness SCALE Company Usage: 20% increments Frequency: 1=Rarely Used 5=Very High Frequency Usage Effectiveness: 1=Very Poor Effectiveness 5=Highly Effective 3/18/2010 MADISON | ADVISORS 34
  33. 33. Impacts to Industry  Declining hardcopy volumes  e-Delivery demand likely to outstrip demand in near term  Large firms are more likely to handle e-messaging in house than mid-size firms  Many firms have captured the “low hanging fruit”, however need assistance to get to next level  Regulatory issues still put a cap on e-Delivery efforts for many verticals & document types  New market leaders to emerge 3/18/2010 MADISON | ADVISORS 35
  34. 34. Internet Adoption * Formally an inhibitor of e- Delivery solutions, Internet Adoption continues to expand, extending electronic delivery to an increasingly wider audience 3/18/2010 * http://www.pewinternet.org/Trend-Data/Internet-Adoption.aspx MADISON | ADVISORS 36
  35. 35. TransPromo Future? Suppression Impact on Transactional Print Volumes 100% 90% 80% e Delivery 70% 60% 50% 40% 30% 20% 10% 0% Yr 0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Mono Color 3/18/2010 MADISON | ADVISORS 37
  36. 36. Future Studies  Extend research  N. American Round 2 – Launch June 2010  Western Europe – Launched February 2010  ANE – Launch April 2010  Assist firms with e-Delivery strategies  Questions to consider:  What is the future document delivery model look like?  How your organization can prepare for that change?  What steps are necessary to win market share? 3/18/2010 MADISON | ADVISORS 38
  37. 37. www.madison-advisors.com MADISON | ADVISORS

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