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Pia Pine Presentation
- 1. + Emergence through Convergence Elizabeth Gooding, President Insight Forums LLC www.Linkedin.com/in/ElizabethGooding October 19, 2010
- 2. + Topics for Discussion Changes Drivers of Change Responses to change
- 3. Change “In the past, even the future looked better.”
- 4. Direct Mail volume down 28% Overall Percentage Change in Direct Mail by Industry 2008 - 2009 40% 20% 0% -20% -40% -60% -80% Mortgage & Travel/Leisur Credit Card Automotive Technology Investments Banking Telecom Insurance Loans e ries1 -68% -60% -31% -30% -24% -70% 13% 11% 30% Source: Mintel Comperemedia
- 5. Ad spend down too – except Internet Source: Kantar Media
- 6. Reducing Traditional to Fund Digital Media Source: Forrester 2009
- 7. + Mailing Volumes are coming back . . . But they might not look the same
- 8. Drivers of Change Consumer Preferences Economy Measurement Regulation Technology
- 9. Measurement: More=Better Print, email, and web 8.8% Print and Email 8.3% Print and Web landing page 7.7% 3.4% Direct mail alone (house list) 6.5% 1.7% e-mail alone (house list) 10.4% Telemarketing (house list) 0 0.02 0.04 0.06 0.08 0.1 0.12 DMA InfoTrends Print gives email a 6.6% lift. Email gives print a 1.8% to 4.9% lift. Adding a PURL/CURL makes it even better. InfoTrends: Multi-channel Communications Measurement and Benchmarking 2008. N=217 DMA: DMA’s 2010 Response Rate Trends Report . N = 473
- 10. The Economy More channels serving Less Business. Smaller pool of desirable Shift from customers (unemployment) acquisition to Heavier competition for retention marketing desirable customers Reduced marketing budgets plus increased costs Shift to lower cost Increased acceptance / channels penetration of online channels
- 11. + Regulation Financial Reform – overarching plus individual regulatory bodies – brokerage, banking, insurance, retirement etc. Healthcare Reform – Affordable Care Act (ACA) HIPAA2, HiTech, ICD-10. Completely changing healthcare marketing to reach individuals. Shareholder Communications – e-proxy, summary prospectus, UCITS IV KIID (European Union).
- 12. Help your clients. Help yourself.
- 13. Help your clients to: Increase the number of marketing channels they can manage Potentially Improve customer experience new offers Increase marketing effectiveness Improve their ability to measure Reduce their commercial printing volumes Reduce their direct mail volumes Being your Reduce transaction print volumes own Reduce postage costs competition Reduce marketing IT costs Reduce the number of vendors they deal with
- 14. Marketing Services Value Chain Source: Insight Forums
- 15. + Is Transaction Mail your Competition? Customer Communications: Efficient & Effective Marketing Investment © Insight Forums 2009
- 16. + DIRECTV Moved bills to full color, white paper solution Saved money - $22,000 per month ($264k per year) Eliminated 15+ preprinted stocks Eliminated pre-printed backers Moved 95% of volume to single run increasing postal density Replaced 9 million direct mail pieces with statement on-serts for 58% cost reduction (in addition to 22k/mo) Made $$ – initial pilot estimated at $1.2 million per year Tested premium channel promotion on a second page and generated $100,000 in new subscriptions in one month Service provider: DST Output
- 17. + Retail Credit Card Redesign of Consumer Credit card statement: 350,000 private label customer statements From 1-page 7x11 black on preprint to letter size, full color plain stock Added graphical messaging, inline coupons, reduced inserts Results after 5 months: Generated $11 in sales for every $1 spent on statement coupons Revenue increase of $560k (over $1 million if annualized) Card holders paid bills faster AND realized a 10% drop in calls for early stage delinquency (call center savings) Improved retention compared to same period previous year. Service provider: DST Output
- 18. + Effectiveness of Messaging Testing Effectiveness of on-statement messages Stand-alone insert On-statement messaging only On-statement message plus insert Goals of campaign Increase “green energy” product uptake Grow the value of existing green energy customers Us the bill to collect customer data (email address & permissions) Australia Post
- 19. + Well-structured Pilot
- 20. + Results On-bill messaging Delivered a better quality of sales lead than insert-only. Conversion rate of test exceeded control by 14% On-bill messaging plus insert Delivered better results for data collection Conversion rate (data collection) of test exceeded control by 16% Finalist for AMI Award for “Integrated Inside Marketing” Australia Post
- 21. + Transaction Printers are investing in color Color can drive efficiency and effectiveness for their customers: Turn inserts into on-serts (potentially minimizing job splits for inserting) Reduce call center costs (better comprehension & recall) Improve response rates (reduced acquisition / upsell costs) Supports relevant personalization - imagery Color increases brand recognition by up to 80% Recall increased by 60% in educational materials using color Sources: ColorMatters.com, InfoTrends, Pantone Institute, White, Jan V. Color for Impact: How Color Can Get Your Message Across or Get in the Way. 1997 Color advertisements have a 52% higher readership Transaction Printers may now pursue Direct Mail Volume
- 22. + Being your own competition: Help customers reduce their direct mail volumes Target more efficiently Use transaction documents to up-sell existing customers in one envelope Help customers reduce their commercial printing volumes Eliminate paper stocks Reduce/eliminate inserts Reduce pre-printed kits – print dynamically and customize Put more in one envelope (reduce total envelopes) Help them reduce transaction print volumes Use printed transaction documents to drive online adoption Provide electronic delivery and payment solutions Consolidate mailpieces to reduce postage Help them reduce their IT costs with efficient design frameworks and dynamic messaging capabilities
- 23. + Fill in Gaps on the Value Chain Focus on Sticky Services Data Services Beyond lists: cross channel profile management Cross channel data hygiene – lists are woefully out of synch Ordering/Management services Multi-vendor literature fulfillment Multi-vendor print ordering / management Measurement services Cross-channel ROI tracking Integration with multi-channel marketing dashboards Ability to deliver multi-channel campaigns seamlessly
- 24. + Do More for your Customers Consider what you CAN do in-house . . . More flexible production footprint Expanded use of existing web tools More consultative approach to customers But, don’t try to do it ALL in-house Partner with excellent vendors Add value to excellent vendors Create a seamless client experience
- 25. + Thank You! For additional information please contact Elizabeth Gooding, President Insight Forums egooding@insightforums.com 800-886-2196 x7 www.twitter.com/egooding www.Linkedin.com/in/elizabethgooding www.thedigitalnirvana.com
Editor's Notes
- Corporate customers today are trying to do more with less. They need to support more channels without adding staff or budget and they are looking to deliver information to their customers using increasingly broad means. Traditional methods of information delivery are quickly being usurped by the use of newer technology in our industry, and customer information and marketing material is being combined in new ways. Learn what is driving these changes for customers and how you can position yourself to survive and perhaps thrive in the future.“I am an independent consultant conducting research researchon vertical industries like healthcare, credit cards, financial services and insurance, I spend a lot of time helping clients in those industries streamline their communications processes and choose outsourcing partners.It gives me an opportunity to see the marketing from both the buyers and the service providers perspectives across multiple service offerings.I recently took over editorial responsibility for the digital nirvana blog which is an offshoot of whattheythink sponsored by Oce Printing Systems. That also gives me the opportunity to meet with other analysts, consultants and owners of printing organizations and marketing service providers.What’s interesting is that I come across abject despair and unbridled optimism in nearly equal parts.
- Change is with us whether we like it or not, and the likelihood of whether change turns out to be a good thing or a bad thing for us as business people has a lot to do with how well we understand it. So – let’s set the stage with some of the changes that we are all pretty aware of – and then talk about what’s driving them so that we can get a better sense of how we can take advantage of change.
- Everywhere you look there are postings on line (ironically) posing options on the future of print. Some suggest that print is on its last legs while others say that we will never be able to do without print. I don’t know what the future holds – but I do know that the current model is not delivering success to an awful lot of companies – there are a lot less printers out there than there used to be and mailing volumes are projected to keep dropping.There are 3,000 to 4,000 less printing companies than there were 2 years ago.
- Year over year changes in direct mail reflect economic factors as well as cultural changes.insurance companies upheld direct mail volumes throughout 2009, despite budget cuts and the growing strength of social media.MintelComperemedia saw modest changes in insurance direct mail during 2009: life insurance offers rose 9% from 2008, health insurance offers increased 4%, and property and casualty direct mail declined 5%. In contrast, credit card direct mail fell by approximately one-third.Financial Services overall is a pretty ugly picture - but was already bouncing back by the first quarter of 2010.Andrew Davidson conducted a webinar last September titled “Seven Predictions for the Future of Credit Card Marketing.” If you’d like a copy of this presentation, please email press@mintel.com. His predictions were:Direct mail is coming back2. There will be more integrated marketing campaigns3. The brand message will become more important4. The CARD Act will lead to creative new products5. The national wallet will shrink6. The subprime segment will redefine itself7. The card industry will adapt to the environmentWith a 47% increase in direct mail compared to Q3 2009, credit card issuers demonstrate increased confidence in the economy and willingness to extend more consumer credit. However, last year's direct mail volume still pales in comparison with recent years. MintelComperemedia reports that the total number of credit card offers sent in 2009 falls 66% behind the number sent in 2008. Pre-recession (2004-2007), card mailings topped seven billion annually; last year, they didn't even reach two billion.Many top credit card issuers increased direct mail volume during Q4 2009, but the biggest bumps compared to the same period of 2008 came from Chase (up 87%) and U.S. Bank (up 64%).In the first three quarters of 2009, insurers mailed approximately 360 million Medicare marketing pieces to non-customers, a 29% increase over the 280 million from Q1-Q3 2008. In full, MintelComperemedia anticipates a 24% increase in estimated mail volume comparing 2009 to 2008."Insurance companies haven't backed off aggressive mailing strategies for Medicare. Instead, many insurers appear to have cut costs by lowering their spend on individual campaigns," states Daniel Hayes. Going to a single color, eliminating artwork, and recycling past campaigns helps free up dollars so issuers can send out more direct mail.Daniel Hayes, VP of insurance services at MintelComperemedia, comments:"Insurance companies continue to rely on direct mail to communicate with clients and prospective clients. In the face of social media, direct mail is still one of the best ways to put an insurance offer in front of an unfamiliar client. It can even drive people towards a company's social media website. Direct mails strength lies in its ability to present ample information and to cement a companys brand message with other media forms."
- Ad spending is down between 7 and 27% depending on the type of media – with the exception of Internet Display ads which are up by over 5% for the same period.So – most marketing budgets have been slashed outright (and we’ve seen the impact on direct mail volumes) but in many cases we’re also seeing the effects of budget shifting from one channel to another.
- So – if online is where the money is going – where is the budget coming from?According to a 2009 survey from Forrester Research – Direct Mail spend is the most likely to be reduced by marketers to fund spending on online channels.The MintelComperemedia research showed overall direct Mail volume down 28% – but overall spend may be down even more – particularly if you are factoring out catalog spending.Volume is not the only impact on spend – there is the whole service chain before the piece get’s into the mail.
- Offset printing may have the best quality – just like a high fidelity sound system has the best sound qualityBut it is being overtaken by digital printing - just like the iPod and other portable music players are the growth industry for music –even thought their sound quality is greatly inferior. digital printing is going to continue to encroach on offset even if the quality only improves marginally over current capabilities.Another parallel is the importance of software and workflow to the success of the media With the iPod Itunes controls how music is purchased and managed and the customer experience.With digital printing (and other types of printing) web to print software and customer service portals give suppliers a competitive edge.Third party “buying hubs” are emerging which are beneficial for customers – but help further commoditize the back end production.
- Technology is more integrated: Build the envelope around the statementHave different people build sections of the same document simultaneouslyVisual print testing toolsComposition softwareWorkflow softwareProofing, color management and testing toolsPrinting infrastructuresFinishing equipmentCollaboration and content managementEstimating, Measurement and trackingLet’s talk about key drivers in a couple of these areas
- INSERT STATS from PODI PURL response ratesA June 2008 campaign by pharmaceutical maker AstraZeneca integrated direct mail with digital media to educate physicians about its migraine relief medication Zomig. The company sent a dimensional paper mailer that included a Web thumb drive that health care professionals could plug into a USB drive. The Zomig “power Key” directed them to a protected Web site where they could learn more about the medication, access other treatment resources and order product samples.The campaign began producing results almost immediately as physicians started logging into the Zomig Health Care Professional site within five days of the launch.“The paper mailing gives information people can use quickly,” says Kyp Systems CEO Lou Vastardis. “But the Web key technology connects recipients to a Web destination that lets them become instantly immersed in a richer information experience.”Sometimes the value-add direct mail brings to an integrated campaign is user convenience. Agency Neo Marketing created a promotion to encourage car owners to come in to the Montrose Auto Group of Alliance, OH, for a price quote on their current rides. The campaign sent direct mail out to lists of auto owners in the region who drove cars of the make and age Montrose was interested in purchasing — and who might then be good prospects for a new car.The mail pieces contained a unique reservation ID and directed recipients to a Web site, www.BuyBackYourVehicle.com, to schedule an appointment for a car inspection and a possible offer to buy. Entering the ID at the Web site auto-filled a form with the owners' publicly available information.Key Findings: · Email to a house list averaged: a 19.47 percent open rate; a 6.64 percent click-through rate; a 1.73 percent conversion rate; with a bounce-back rate of 3.72 percent and an unsubscribe rate of 0.77 percent. · Response rates for Direct Mail have held steady over the past four years. Letter-sized envelopes, for instance, had a response rate this year of 3.42 percent for a house list and 1.38 percent for a prospect list. · Catalogs had the lowest cost per lead/order of $47.61, just ahead of inserts at $47.69, email at $53.85, and postcards $75.32. · Outbound telemarketing to prospects had the highest cost per order or lead of $309.25, but it also had the highest response rate from prospects of 6.16 percent. The highest response rate for a house list was also telephone, at 10.41 percent. · Paid search had an average cost per click of $3.79, with a 3.81 percent conversion rate. The conversion rate (after click) of internet display advertisements was slightly higher at 4.43 percent. · Response rates for B-to-B campaigns were generally higher than for B-to-C campaigns. Lead generation and high-end average sale campaigns also had higher response rates. · Nearly 60 percent of direct mail campaigns in financial services aimed to produce a direct sale. The average response rate was a comparatively low 2.66 percent to a house list and 1.01percent to a prospect list. DMA’s Response Rate Report Trend Report was conducted through a survey that was emailed in March and April 2010. When the survey was closed, DMA had received 473 usable responses. DMA’s 2010 Response Rate Trends Report costs $260 for members and $470 for non-members. To purchase, please click here.
- Credit card industry statistics – In the 12 months that ended in September 2009, the number of Visa, MasterCard, American Express and Discover card accounts in the United States fell by 72 million Response to offers on new accounts are at <0.5%Voluntary attrition at 8% in Q4 2009Involuntary attrition at +9% in Q4 2009Debit cards are capturing more transactions (lower revenue)Rewards programs are saturatedCompanies were in expense reduction mode even before the financial crisis hit fever pitch Taken together – we see a need for more effective and efficient marketing with more focus on customer retention and cross-selling while taking advantage of customers growing preference for online communications which have the added benefit of being lower cost channels.
- The economic crisis – which in theory we have emerged from – has spawned an area of regulations intended to keep this sort of thing from happening again. Much like Sarbanes Oxley after Enron – we know have all kinds of new consumer protection initiatives coming through in finance and healthcare.Complying with these regulations will cause large investments in technology and changes to business communications that span all communications channels.Many executives are very frustrated with the amount of work facing them – but I personally would like to send the regulators a box of chocolates because they always manage to keep me in business.Most of my new projects are a direct result of one or another of these initiatives – and you should be aware of the customer pain points that can allow you to benefit from these regulations too.For example – healthcare companies need to make the shift to marketing to individuals instead of corporations – this is completely new for many companies and they don’t’ have the database or the marketing or even an understanding of what they can and can’t do.They need help. Can you help them?
- Everywhere you look there are postings on line (ironically) posing options on the future of print. Some suggest that print is on its last legs while others say that we will never be able to do without print. I don’t know what the future holds – but I do know that the current model is not delivering success to an awful lot of companies – there are a lot less printers out there than there used to be and mailing volume are projected to keep dropping.What I do know is that there are also a lot of companies that are quite successful despite the recession and the shift to digital media. For several years NAPL, Infotrends and many others have been preaching that printers need to become marketing services providers. I disagree – or at least a look at it from a somewhat different perspective.I think that those firms who have the capability and culture to be marketing services providers already are and those that don’t have the capability and culture shouldn’t go there.Does that mean that you shouldn’t change or adapt? No.It means that there is more than one way to approach the market and you need to find one that fits for you. It means that you need to have a really solid understanding of what your customers want and need in order to position yourself. It also means that you might not offer all of the services that you offer now in the future – and very likely that you will be offering new ones that you haven’t even considered yet.Let’s look at some of the things that clients across the country of all shapes and sizes are saying that they want.
- Everywhere you look there are postings on line (ironically) posing options on the future of print. Some suggest that print is on its last legs while others say that we will never be able to do without print. I don’t know what the future holds – but I do know that the current model is not delivering success to an awful lot of companies – there are a lot less printers out there than there used to be and mailing volume are projected to keep dropping.What I do know is that there are also a lot of companies that are quite successful despite the recession and the shift to digital media. Let’s face it – if a outdoor advertising can shift it’s business model – anyone can.For several years NAPL, Infotrends and many others have been preaching that printers need to become marketing services providers. I disagree – or at least a look at it from a somewhat different perspective.I think that those firms who have the capability and culture to be marketing services providers already are and those that don’t have the capability and culture shouldn’t go there.Does that mean that you shouldn’t change or adapt? No.It means that there is more than one way to approach the market and you need to find one that fits for you. It means that you need to have a really solid understanding of what your customers want and need in order to position yourself. It also means that you might not offer all of the services that you offer now in the future – and very likely that you will be offering new ones that you haven’t even considered yet.Let’s look at some of the things that clients across the country of all shapes and sizes are saying that they want.Clients want to do more with less.They want to use their budgets as effectively as possible and they want to work with vendors who can help them manage the complexity.They want to work with suppliers who are, in a sense, willing to be their own competition. Helping them reduce the overall volume of print while making the remaining volume more effective.They want to look at their overall marketing spend and the services that go along with that – not individual campaign buys. This is changing the overall Marketing Services Value Chain.
- They have a whole bunch of vendors – often multiple vendors for the same type of work.Patricia Seybold Customers.com “Make it easy for customers to do business with you. Make it easy to delivery business for customers”PURLS, CURLS, QR CodesDriving communications online where they can be more easily measured.Engaging customers in the design of
- And increasingly, clients are measuring these types of campaigns and finding them very effective.
- Department Store Chain’s Consumer Credit Card Statement Case Study:What DST did:Redesigned from one-page 7 x 11” monochrome to two-page, 8 1/2 x 11 color “TransPromo”Approximately 350,000 monthly private label card statementsEliminated pre-printed stockGraphical messaging, in-line coupons, which helped to reduce the number of insertsConversion within 90 daysResults within 5 months:Sales increase of $560,000: statement coupon redemptionEvery $1 spent on statement coupons = $11 sales increaseCardholders paid bills faster, reducing days outstandingLower account churn, decreased account closures year-over-yearIncreased flexibility, eliminated preprint rigidity, inventory storageRealized a 10% drop in calls for early stage delinquency
- Will they now start offering direct mail?
- Understand the full marketing value chainGain vertical industry knowledge where appropriateOffer the services you can provide in an expert fashionPartner with other “experts”Use your own capabilities to market your expertiseUse social media to keep tabs on clients and industryBe a problem solver – marketing, operations, sourcing, sustainability, financial.
- And you’ll have more customers!