2010 Data Driven Communication - TransPromo+

Editor's Notes

• #4: Data is the lifeblood of transaction communication. Each purchase on a credit card, each cycle for insurance payments, each swipe of a loyalty card at a favorite retail store, or each cycle for utilities causes transactions to lodge in data bases associated to the customer. The interesting thing about that data is that many companies fail to use it effectively. The billing and statementing systems ensure that accurate data appears on those bills and statements, but the value of the data is often overlooked. The Cutter Consortium released a study in 2006 that focused on the lack of strategies for using data in 2/3 of companies and further indicated that the reasons for that lack of strategy focused on an inability to demonstrate and ROI, turf battles and privacy concerns as the key hurdles. The important statistic is that a third of companies do have a strategy already in place and are using what they know about their customers to communicate with them more effectively. For any company that has access their customer database, there should be a strategy in place to take advantage of it. However, many companies have firewalls that prevent them from using the customer database directly. In those cases there are still solutions. The first would be to ask the data group to build profiles aggregated from the customer data to allow marketers an understanding of the characteristics of current customers. Another technique is to acquire external data that matches some aspects of the idea customer profile and use that to build a more complete view of both the customers you have and the customers you want to have. The team at Winterberry Group make the point that this is an opportunity for both internal and external print providers. A common complaint among marketers is that when they approach their print provider they indicate that they don’t know how to do anything more than print the bill or statements. Those who can go beyond the simple print and mail function to offer data mining, data enhancement, offer development, and metrics management have an advantage. Key challenge: 64% of companies lack a formal strategy of using their customer data!* In fact, the following responses were gathered in answer to the question, “What challenges do you face in getting projects that use customer data for analytical purposes approved?”** It is difficult to show acceptable ROI - 43% Inertia and resistance to change - 42% Turf battles over data ownership - 34% Privacy concerns - 29% Other - 12% These challenges represent opportunities for communications providers. ( work from slide) The Business Value of Customer Data January 4, 2006 - Arlington, Massachusetts http://www.cutter.com/press/060104.html. The survey, analyzed by Cutter Benchmark Review Editor, Dr. Gabriele Piccoli and Cutter Consortium Senior Consultant Ken Collier , was devised to investigate the perceived value of customer data in organizations worldwide. With this foundation, Piccoli and Collier tackle the issue of customer data head-on and benchmark current organizational practices. They set out with the goal of determining the challenges that organizations face when it comes to collecting and using customer data and provide some guidance and ideas focusing on the strategic possibilities of customer data use.
• #5: One reason to do this is to improve customer loyalty and customer retention. Fred Reichheld, a Bain & company consultant and professor at the Harvard Business School tells us that if you can improve customer retention by 2% the impact of that increase in customer retention is the same as reducing overall operating costs by 10% because customer acquisition programs bring net new customers, not replacements to lost customers.
• #6: Data from WinterberryGroup.com 2008 These trends should give you some ideas about the opportunities that exist. Using data is integral to creating informative, educational and promotional content for essential mail, which extends the value of the document. We focus on the print component of transaction communication even though in some parts of the world there is an interest in e-delivery of these transaction documents. All of the trends in adding content to transaction documents bring value to these documents regardless of how many ways they are delivered. When you look at the type of content to add to these regular customer communications, consider the relevance, timing and individualization aspects. What message do you want your customers to keep “front of mind” in their relationship with you? What is the most relevant conversation you can have with them? Can you create a set of messages that will resonate with different demographic slices of your customer base? Because bills and statements document the essential business relationship, this is where the opportunity to influence your customer is most dramatic.
• #7: The trends we have talked about so far center on the use of data to create more compelling messages for the recipients of transaction mail. Because transaction communication is expected, it is opened and recipients tend to spend more time with it. The trends in using data to give these documents more value center on six key facets that touch these trends. The actions for product line owners and print providers to consider are: the use of data to trigger customer information, education, and promotional content, the integration of all marketing messages to ensure consistency across all channels. The goal will be to reduce customer churn by making those competitive messages less attractive; adding more value to the monthly transaction communication helps achieve that goal. Do not under value the importance of the operational issues, including the cost pressures and the emerging environmental pressures. For organizations struggling with the costs of producing printed communication and thinking that e-delivery may eliminate some of those costs, remember that consumers tell researchers that they like print. Savvy marketers around the world have learned to right-size their print communication to maintain that regular conversation and offer customers the ability to pick the channel they prefer. In most surveys about 2/3 still want print in the mix. To keep print attractive, take a good look at what you print, how you print, and where the opportunity to optimize may be. Those same questions may lead you to approaches that are more environmentally friendly! If you have questions about any of these areas, let us know. We have experts who can discuss the how to optimize your production workflow, and how to address your environmental issues.
• #8: Source: Gartner CRM Study, 1998 This chart is from a Gartner Group study conducted in 1998 when Customer Relationship Management (CRM) was in its early days. It was meant to depict the opportunities for CRM and went along with a study that explained the opportunities available to an organization that brought their knowledge of their customer into a rigorous process – the indication was that the higher the number of customers and the more complex the interaction the more opportunity their was to use data about the customer to create a more valuable relationship. In the years since this study, the accuracy of the prediction has been shown in countless studies that show that using information you have about your customer to inform the offers and the total communication experience for that customer, the more value that customer will bring. If you look at resources like www.loyaltyrules.com, which is run by Fred Reichheld, a former Bain & Company consultant who teaches at Harvard Business School and writes frequently on the lifetime value of customers, you’ll see confirmation. Reichheld says that customer retention should be the goal for every company. Keeping customers longer and increasing what they spend brings more value that constantly churning customers. The team at Peppers & Rogers Group concur. Their book Rules to Break and Laws to Follow reiterates the power of knowing your customer and using that knowledge to benefit the relationship. Why are Telecom, Banking and Insurance and Utilities (and Funds Management in Europe) considered the best targets? Look at the nature of the customer relationship. In each sector these companies tend to have multiple data points. They know the customer name and address, but also have access to spending patterns. Of course privacy is important, but it is possible to take data points and aggregate them to create profiles of types of customers – some call these customer personas. These personas, when based on live data, can be used to create marketing programs that are more likely to keep customers longer and produce greater ROI* and ROMI** results. Notice that we are talking about using customer data to build profiles. Data is a most important element in creating effective customer communication that gets results. Bills and other essential mail tend to hold customer attention for more than a few minutes when first received – the challenge is to hold their attention a bit longer and deliver a few additional messages. Let’s talk about data for a moment. ROI – Return on Investment, generally includes the investment in the means of production ROMI – Return on Marketing Investment, an evolving concept that has short term and long term components. Short term ROMI is a simple index measuring the revenue, market share, contribution margin or other metric for every dollar of marketing spend. Long term ROMI tends to take the longer view and include incremental brand awareness, purchase intent and other less tangible factors.
• #10: These examples fall generally into a category called TransPromo, the integration of transaction data and promotional messaging on a bill or statement. For many companies the jump from base stock forms replacement to TransPromo is too drastic, which is why we developed a crawl-work-run approach that many Kodak customers use. The basic characteristics of transaction mail you already know, and we have discussed the value of considering a base stock replacement strategy. When you begin with plain paper it becomes possible to rethink your approach to formatting the information you must provide to your customer, and to consider adding more information content. At the most basic approach you can add static information content that informs your customer about programs, services and even current DM and web campaigns. If you want to add a bit more sophistication you can use data about the customer to determine what informational message you will use. We think the best fits are conservative financial services. Building on experience in getting targeted information on to the document, the next logical step is to add customer education content. Some of our customers add charts or graphs that compare monthly spending to average spending, while others compare market factors to the customer spending or portfolio. The options are endless; it just requires practice mining the data and learning the interpret the customer data base! TransPromo is the appropriate choice for companies with robust marketing departments and deep knowledge of their customers. You can begin with a limited number of demographic buckets and offers, but to be successful a TransPromo program requires ongoing review and analysis of the responses and constant tuning of the offers. When done well there is a step beyond TransPromo – Fly! To fly the requirement is to completely integrate the on statement marketing with direct mail campaigns, online campaigns and mass media campaigns so that all of the messaging to the market has common elements.
• #12: We know that people process numbers and factual data with the left side of their brain.
• #13: People process color and emotion with the right side of their brain.
• #14: So, if you use both good data design and good design with color, people will learn faster and more completely.
• #18: Here's an(other) example of TRANSPROMO communications integrated into the billing statement. You can see how STATEMENTS FROM CHRYSLER FINANCIAL have evolved over the past two years. In January of 2005, they abandoned the pre-printed sheets that had been printed digitally in black-and-white and began printing in color. The next month, they began using images, first for a cross-selling campaign. This example shows a dramatic color photo of the "all-new 2006 Dodge Charger." They followed that with a NASCAR promotion, then other monthly promotions. What you see here is the rebirth of a transactional statement as a promotional medium. More and more companies are turning to color variable data printing to maximize their return on their precious opportunities to reach and influence customers, adding value to the pages they print.
• #20: Kodak's Graphic Communications Group 02/10/10 Pioneering role in Europe, thrilled went with Kodak. Two Kodak Versamark VL2000 Printing Systems into a new era in the production of complex financial reports, portfolio statements and other documents for private banking clients. In the bank business, it is our challenge to find a way to add value to our communications materials and maintain a cost-effective operation. Previously were creating monochrome daily account statements, now VL2000s have the opportunity to print in full digital colour at a reasonable cost. Furthermore, digital colour printing with the VL2000 gives the opportunity to align to market demands and take business to the next level with high impact printing on demand. Have created successful projects with the Versamark VL2000 System including a special wealth reports project, complete with colour pie charts and graphics, for a private banking company. Low operational costs make the VL2000 particularly economical for applications like multipage financial statements, credit card bills, and direct mail applications, and there are many new projects in our future, such as TransPromo applications. One area where anticipate more successes with VL2000s.
• #22: Background: Bunnings is the largest retail hardware chain in Australia with over 200 stores and 1,000 suppliers. It has an account base of over 40,000 trade customers. Commenced with multiple base stocks and highlight colour laser images Versamark platform Advertising space in heavy demand Discussing adding promotional pages within statement pages Goal is to make billing process revenue positive
• #23: Brand Transformation Presentation The market for TransPromo is the crossover between statement and bill printing and the marketing collateral that has traditionally been delivered to customers in separate mailings on by stuffers in the envelopes. With TransPromo we take it to new territory by building powerful statement marketing offerings that help our customers embrace color for all of their customer-targeted printing. * JP Bewley , VP of Consulting Services, Raine Media at VDP Conference 11/13/06
• #24: Brand Transformation Presentation The market for TransPromo is the crossover between statement and bill printing and the marketing collateral that has traditionally been delivered to customers in separate mailings on by stuffers in the envelopes. With TransPromo we take it to new territory by building powerful statement marketing offerings that help our customers embrace color for all of their customer-targeted printing. * JP Bewley , VP of Consulting Services, Raine Media at VDP Conference 11/13/06
• #25: Brand Transformation Presentation The market for TransPromo is the crossover between statement and bill printing and the marketing collateral that has traditionally been delivered to customers in separate mailings on by stuffers in the envelopes. With TransPromo we take it to new territory by building powerful statement marketing offerings that help our customers embrace color for all of their customer-targeted printing. * JP Bewley , VP of Consulting Services, Raine Media at VDP Conference 11/13/06
• #26: Brand Transformation Presentation The market for TransPromo is the crossover between statement and bill printing and the marketing collateral that has traditionally been delivered to customers in separate mailings on by stuffers in the envelopes. With TransPromo we take it to new territory by building powerful statement marketing offerings that help our customers embrace color for all of their customer-targeted printing. * JP Bewley , VP of Consulting Services, Raine Media at VDP Conference 11/13/06
• #30: Not all data-driven communication has to be complex. The application shown here is from Salmat Business Force on behalf of their customer, Guardian Pharmacies and their Plus Points loyalty program. The original application was a static, offset printed newsletter and a single page loyalty statement that had little personalization. After a redesign by the team at Salmat, the new application is a one or two sheet mailer that starts with plain paper and customized to meet the needs of the demographic profiles that have been identified in the Guardian customer data base. Guardian tells Salmat that they routinely get higher than 56% response to offers made to their customers because they tune the offer to the demographic. Note that this involved rightsizing and rationalizing the communication. One piece was eliminated – the offset newsletter – and the points mailer became the communication medium for a monthly, targeted conversation. It is possible to take this even farther by adding 2D barcodes ( QR codes or similar technology), RFID tags and other technologies to track responses.
• #31: In any organization there is room to grow once you being using data. Kodak customers around the world have been using data to create comprehensive customer communication campaigns for many years. One company that does it very well is Rotomail Italia, where they work on campaigns that involve using the data to tune the offer made to prospects and then following through by constantly updating what they know and what they learn about these prospects as they become customers. Once a customer moves from prospect to customer, the best practices tell us not to stop learning about that person. Ask for more information, buy information about similar types of consumers to build a better view and make better decisions about how to tune offers. All of these types of activities deliver more return on the marketing investment.
• #32: Image from Fenske media – they produce the Kampgrounds of America (KOA) direct mail campaigns. No matter what point in the data-driven communication path you are on at the moment, there is always someplace to go. Some great examples of using data to create highly personalized and targeted pieces come from our customers around the world. Fenske Media of Rapid City, South Dakota is a specialist in creating these types of data-driven direct mail pieces using some innovative solutions the include not only digital full color printing, but also selective perforation, laminating and even the addition of magnetic material to create refrigerator magnets. For KOA they routinely create custom mailers for KOA franchise holders – all managed through a web-to-print application – that target exactly the types of customers that the KOA franchisee is interested in. If you do all of your camping with a tent, your mail piece will focus on the value of camping at those KOA locations that cater to tent-based campers. If you travel with a caravan attached to your car, you get offers specifically geared to KOA locations with hookups that meet your needs. These are the best types of direct mail campaigns because the recipients are highly motivated. It becomes the job of the marketer to tune the offers to see the results.
• #33: Whether you start with a limited amount of data and grow your use of it over time or you jump in with multi-dimensional data-driven campaigns, the clear value is in managing the data and analyzing the responses. Every campaign should have controls and should have variations that give clear indications of which offers work.
• #34: Kodak delivers best-in-class solutions in every speed range, meeting every requirement from cut-sheet printing to the highest-speed continuous printing in monochrome and color.
• #35: The KODAK VERSAMARK VL-Series, one of our fastest selling product lines, and the award winning* DIGIMASTER EX300 Systems provide a systems approach for roll fed full-color, full-page variable capability with the durability of an offset press — and some of the lowest acquisition and running costs in the industry. The DIGIMASTER EX300 brings flexibility as the only cut-sheet black-and-white EP printer on the market capable of printing 300 9x14” duplex ipm. The Gray Resolution Enhancement Technology (GRET) produces 64 levels of gray for superb halftone reproduction, and the small particle developer allows reproduction of even the finest lines, smooth halftones and bold solids. And, operators love it. We have customers who tell us that when the Digimaster is sitting next to other equipment, operators maneuver to be assigned to the Digimaster. It’s reliable, robust, and versatile with a variety of paper supply and finishing modules. * 2007 Editor’s Choice Award
• #36: With one of the broadest portfolios of solutions, spanning electrophotographic and inkjet digital solutions, not to mention all of our solutions that support offset communication channels, Kodak has hardware that will meet your needs today and position you for the future. Remember that all of these technology platforms may meet a variety of needs, and often multiple technologies fit into the same environment to build the best solution set.
• #37: So you’re wondering just how big IS this Kodak VL family – well, we are now a six family members. The VL2000 is the same product that was launched last year at drupa and GraphExpo and is the matriarch of our family if you will. She’s strong, durable and quite the DOD workhorse. The number of our installations have been growing, and as all of you know in this room, the ACP has pushed for even more sales in 2009. For simplicity as well as market mind share expansion, my fancy term for making the market believe we have many more models available for our customers, we in CPM have opted to give unique numbers to each of the duplex systems as well. Think of how easy we’ve just made your language to everyone in the organization – the VL 2000 and all of her successors that have a number ending in 000 are for single engine configurations. For those products like the VL 2200, we know that the second digit, the 2, refers to the 2 nd engine and will be so going forward. The graphic shows this. Now some of you might be wondering why we opted not to have a VL3000 – are you sure all of us could have kept that straight, or better yet, straight in our customers minds, that we weren’t talking about a VT3000? Ok, you see my point. So with the VL4000 we have a nice even jump to the next product within the VL Series, which higher number should help you remember higher speed. So ultimately the VL6000 should indicate that we’ll have the highest of everything, speed and resolution, and that’s the intent. So the 000s are single engine, the 200s are double engine and when we have 2 , 4 , 6 we know that we’ve got a product that’s growing and getting better at each stage. While all this is great, the “so what” point I want you to take away from this slide is – the VL offers your customers the ability to start with a basic VL product and add print engines in order to increase productivity or with the VL6000, offer higher resolution or higher speed as needed. So if you think this may forget all these wonderful features: Sales Process GUIDE
• #38: So let’s start our discussion about our proven workhorse, the VL2000 and VL2200. Launched last year around the world at both drupa and GraphExpo, this four color printing system with a 600x600 resolution and a speed of 75mpm or 246 fpm has been our product targeted for the tranactional and direct mail markets for the applications of forms replacement and transpromo. Pat showed us in her presentation the many transactional and direct mail samples – all which were or could potentially be produced on the VL2000/VL2200. The point I want to drive home right now is this is a product that is available right NOW for sale. Remember this is a product that enables transactional / data center customers the flexibility of printing at one of the lowest TCOPs in the industry with print quality that in better than CIJ. One of the ways that Kodak is able to help our customers achieve this low TCOP is based on our inks, dye inks to be exact.
• #39: VL2000 – Product Overview This is the “speeds and feeds” of the VL2000 Some key points for emphasis: Drop on Demand (DOD) is a form of inkjet different from traditional Continuous Inkjet (CIJ). This is not a departure from Kodak IPS core strategy, but rather a tactical move, bringing 600 dpi to our customers who have this requirement now. Most of the other information is very similar to the VT3000, the transport of which the VL2000 is largely based. 250 fpm (75 mpm) – maximum current speed of the system Integrated fluid system and transport – VL2000 is a completely new design that encloses the fluid system, cleaning system and ink storage within the transport, giving a more tidy appearance and smaller overall footprint. Slack web pre/post – compatible with industry standard devices such as unwinders, rewinders, sheeters, fan folders and so forth from such brands as Lasermax/Roll Systems, Hunkeler, PFE/Orion, MBO
• #40: Product Feature Summary Key Points: MICR – Kodak provides an in-line MICR (printing of magnetically readable check numbers) solution that is unique in the industry and a tremendous value added application for transaction printers primarily in the US&C. Automated PWC – helps maintain the quality and printing life of the DOD print heads with minimal operator effort.
• #41: So what if your customers want even greater speed and higher resolution? What do you offer them? An image of a young Tom Murphy – no – but how about a model formerly known as Mercury? For those of you who have heard the rumors about Mercury, I’m happy to say that reality is on it’s way. While we are still in the early stages of product development for this product, we are shooting for the highest resolutions and highest speeds which means resolution greater than 600x600 and speeds greater than 500 fpm. Not to mislead any of you, the offering will NOT be higher speed plus higher resolution, it will be one or the other. I’m sure by now you’ve figured out that the VL-Series of products have been designed for the transactional and direct mail markets. We feel that this product also lends itself as a product for the publishing market, which I’ll explain in a moment. The applications, as you’ve seen and heard are transactional/transpromotional and for the direct mail market, forms replacement. The publishing application considered at this time is for books. No, not coffee table books, but rather mass market, trade and possibly some journal type pubs. With a greater optical density of blue/black dye ink over the brown/black pigmented ink, this could be a solid offering. While this premier VL model won’t be ready later in the year, I’d like you all to remember that this product will allow customers to run at the highest speeds OR at greater resolutions that translate into greater productivity or higher quality products.
• #42: While I don’t want to steal Tom Bouman’s thunder on the 700 Print Manager, you’ll get an in-depth session with him tomorrow morning, I did want to highlight just a few points. As most of you know from either attending one of the webinars that Tom held before GraphExpo or have found your way out to eCampus and picked up your technical expertise there, the 700 Print Manager will be the new powerhouse controller of the future. The power comes from its ability to act as a digital front end systems and as a press controller. This means there’s the ability to drive the system, the web transport and the writing engine as well as using it as a centralized production manager connecting to a production management server such as Kodak Prinergy. This controller also allows multiple technology outputs, which for someone like me who comes from the commercial press world, means that the 700 Print Manager can take care of driving my offset press, my CTP device and my Kodak Versamark VL system. This value proposition should REALLY catch the attention of all your customers. The initial release of the product, the Graphic Arts version is June and the IPDS for transactional work and Stream will be in Q4 2009.
• #43: Kodak subject matter experts and industry marketing specialists have been helping to change the way data centers approach their print needs for the last decade. Today, digital solutions enable tremendous opportunities for companies to make stronger customer connections by using the information they have about their customers to create individual conversations through personalized, data-driven communications (direct mail, solicitations, TransInfo/TransEd/TransPromo). Kodak has years of experience working with the largest printers in the world, and we can use that experience to create the most efficient solution for your current needs and to position for your needs in coming years.