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Oct 1, 2008 12:00 AM
Transpromotional documents (or transpromo as everyone calls them) are untried novelties for most print service providers. But not for One2One Communications (www.one2onecom.com) of Bolingbrook, IL, whose vice president of sales, Travis Howe, was a speaker at the recent TransPromo Summit in New York City.
One2One, according to Howe, has been talking to its customers about putting personalized marketing messages on their transaction statements for the last six years. “We already know about it,” he says.
InfoTrends (Weymouth, MA), the organizer of the TransPromo Summit, wants other print service providers — especially those catering to companies generating transaction documents on a modest scale — to be as comfortable in transpromo territory as One2One. And that certainly was one purpose of the two-day (August 13-14) symposium: to persuade printers of all sizes that they now have the means, the motive, and the opportunity to break in.
InfoTrends, the print market research firm that launched the TransPromo Summit last year, foresees a boom in demand for bills, statements and other mailed documents that digitally merge transaction information with variable content tailored to the buying habits or group characteristics of each recipient. The output of these response-triggering messages, says InfoTrends, will reach 22.8 billion pieces by 2012, with more than half produced by or for customers generating them in relatively small quantities.
Howe says One2One — a billing statement specialist that produces more than 600 million statements, letters, targeted direct mail pieces, and delinquency/disconnect notices per year — is glad to be in on the ground floor of the trend. It has created successful transpromo campaigns for customers in the cable broadcast and automotive industries, and soon it will move to all-digital production of transpromo mailers with the installation of an InfoPrint 5000 color printing system.
Howe generally agrees with the TransPromo Summit's assertion that success in transpromo isn't just for specialized producers like One2One.
But, he attributes the company's transpromo prowess to an asset that general commercial printers typically don't possess: an IT department up to the stiff challenge of developing the software and managing the volumes of variable data that transpromo campaigns are built upon. The department's programmers, for example, have the skills needed to write code that shows individual recipients of statements from One2One's cable customers how much they'll save if they take advantage of special offers.
Howe also notes that many potential users of transpromo documents simply don't know the format exists. This market reality is reflected in the fact that after six years, transpromo still represents only a small percentage of One2One's total volume (although Howe is confident that it will grow).
But just how tough will it be for printers that aren't specialists in IT, VDP and related disciplines to capitalize on what InfoTrends calls the mid-market for transpromo services? The conference offered numerous examples of success in high-volume transpromo projects where the metric was hundreds of thousands or millions of pieces per mailing. The presentations, along with product displays in the exhibition area, introduced tools and services that weren't available to transpromo users even a year ago. These included output, data management, and personalization solutions that make it easier for smaller and less experienced print service providers to break into the transpromo market space.
But in one way or another, every presentation pointed up the fact that producing effective transpromo documents is as hard as it looks — not insurmountably difficult, but undeniably challenging in a number of technical areas where many printers are novices if not total strangers.
InfoTrends group director Barb Pellow, who keynoted and chaired the summit, admitted that although the good word about transpromo is spreading, “Implementation is lagging adoption in many people's minds” because the concept still is not fully understood. That's partly because of its inherent “simplexity” — the tangle of technologies and processes behind the straightforward, attractively printed piece of paper that the recipient of a transpromo document sees.
“We need to figure out a way to make transpromo simple,” Pellow told an audience of nearly 300 transpromo document owners, print service providers and vendor representatives. Only then will marketing managers feel “serene” enough about transpromo to leverage its power.
InfoTrends believes there is a great deal of transpromo power to leverage. Its market research, said Pellow, shows that the average U.S. household receives 21.2 transaction documents per month, each a potential transpromo “touch point” if properly personalized and enhanced with color.
Pellow expressed some dissatisfaction with the term “transpromo” because it doesn't convey the fact that these documents also can be used in ways that aren't connected to explicit promotional offers. Utility customers, for example, could receive educational messages about ways to reduce monthly bills. Subscribers to health care plans could benefit from information about coping with medical conditions and obtaining generic drugs. For customers of financial service providers, there could be news about products that will contribute to retirement savings.
According to Pellow, transpromo documents can be generated by trusted local sources including doctors' and dentists' offices, church groups, credit unions — even lawn care specialists. These are typical of the 2.9 million small businesses that InfoTrends assigns to the mid-market niche for transpromo services and that many commercial printers already count as customers.
Pellow went on to say that about 54 percent of document owners surveyed for a recent InfoTrends market study reported generating between 1,000 and 99,000 transaction statements per month. Roughly the same percentage said their annual spend on transaction documents was under $500,000. Most significantly, nearly two-thirds of all respondents indicated they plan on adding promotional messages to their transaction documents in the next 36 months.
Thus, Pellow concluded, there is a “tremendous opportunity” to bring small-quantity producers into the transpromo fold — if they can be persuaded to like what they see when they look at their side of the simplexity coin.
Detailed analysis of the transpromo opportunity is contained in InfoTrends market reports available exclusively to paying sponsors or subscribers, and extracts from these studies were shared, sparingly, at the TransPromo Summit. However, InfoTrends did field an AMERICAN PRINTER follow-up question about what its research suggests regarding the number of printers actually engaged in transpromo printing.
Matt Swain, a senior research analyst for InfoTrends, cited a recent commercial print market study that included a question about the top five applications for black-and-white digital printing. He said only 25.4 percent of respondents included “transactional statements, invoices, and other transactional documents” among their top-five choices. When the same question was asked about color digital printing, the percentage dropped to 4.9 percent of respondents.
“If we then ask the question, ‘How many of these commercial printers are engaged in transpromotional printing?' the number will be further cut down,” Swain said. “It would not be unfair to say that less than 1 percent of commercial printers are engaged in transpromotional printing today, with an increasing number looking at opportunities in that space in the coming years.”
The scarcity of players is, of course, a clue to the extent of the opportunity that awaits those bold enough to plunge in before the rest do. But Swain also commented, as did many speakers at the TransPromo Summit, that success in the endeavor is very much about having access to transpromo data and knowing how to use it.
“This serves as a significant inhibitor from the commercial printer's perspective, as they generally do not have the skill sets to support the transition,” he said.
In her keynote, Pellow said that another inhibitor — in fact, one of the “great inhibitors” — to transpromo adoption is the difficulty printers have in explaining its potential value to document owners in dollars-and-cents terms. “Nobody understands what the ROI is in transpromo,” she declared. But subsequent speakers made it clear that the light of understanding is finally beginning to dawn.
At last year's TransPromo Summit, implementation case studies were few, and hard data about response rates and dollar dividends were almost nonexistent. The picture was much fuller and richer at this year's event, which offered an international selection of success stories highlighting what transpromo can do and how its results can be measured. Among them:
Humana, one of the largest health care plans in the United States, personalizes its statements to inform eligible recipients where they stand in relation to the gap or “doughnut hole” in Medicare drug coverage. The coupon-bearing statements also let them know how much they've saved by participating in Humana drug plans. As a result, customer satisfaction with Humana's statement-based communications has risen significantly.
Parajett AB, a 102-year-old printing company in Sweden, is testing a transpromo version of a loyalty program for 2.2 million customers of ICA Group, a large retailer to the Nordic countries. Monthly statements to a test sample of these high-spending ICA credit card holders now contain 10 discount offers based on each recipient's purchasing history. The pilot program, aimed at about 80,000 ICA customers, has produced a 35 percent response rate. The general monthly promotion, which draws upon a database of 4,000 product images, consists of 6 million A4 pages that Parajett AB has five days to print and mail.
Canada Post, the corporation that delivers Canada's mail, champions transpromo as the key to producing what it calls “Great Statements” — documents that go beyond billing details to strengthen the business/customer relationship. One of its customers operates the world's first fully automated toll road, the 407 ETR (express toll route) near Toronto. With Canada Post's help, the company customized its statements to reduce the volume of requests for information at its call center. According to Canada Post, call center volume dropped by 15 percent and administrative costs went down 38 percent.
Most Americans who move to new homes probably will receive the “welcome kit” produced by Imagitas (a mailing consultancy that is part of Pitney Bowes) on behalf of the USPS. The kit, a four-page booklet containing ads and coupons localized by zip code, is mailed to householders after they confirm their new addresses for postal forwarding. The variable information in the kits, although not personalized to individual addressees, has “block-level relevance,” according to Imagitas. Pitney Bowes also has produced 70 million copies of a “mover's guide” that carries neighborhood-specific advertising for the Lowes and Home Depot chains. These are distributed to consumers when they submit change-of-address forms at their local post offices.
Salmat BusinessForce of Sydney, Australia, has created more than 50 transpromo projects for customers in the Asia-Pacific region since 2003. To aid the fundraising efforts of one customer, the Juvenile Diabetes Research Foundation (JDRF), it created a diversified appeal for contributions that broke out segments of the JDRF donor base according to each recipient's relationship to the disease: patient; parent, friend, or relative of someone with juvenile diabetes; or no ties to anyone with the disease. Previous donations also were factored in, and each group received creative execution and targeted messaging that reflected the relationship. Compared with a generic control version of the mailing, the response rate from regular donors more than doubled. So did the average size of their contributions. The jump in response rates and donations far exceeded the cost of adding full digital color to the campaign.
Next year's Transpromo Summit is slated for August 2009. For more information, see www.infotrends.com.
Patrick Henry is the director of Liberty or Death Communications. Contact him via www.libordeath.com.
At the TransPromo Summit, InfoTrends forecasted a robust 68 percent CAGR for transpromo documents over the next four years, culminating in the output of 22.8 billion transpromo impressions in 2012.
But a 2008 study for PRIMIR by I.T. Strategies says, in effect, “Not so fast.” According to a published excerpt, nearly three-quarters of the consumers surveyed for the study said they didn't like the idea of seeing promotional offers printed on their bills and statements. Even those who were open to the “promo” part of transpromo told I.T. Strategies that they would not be more likely to respond to offers delivered in this way.
What accounts for the apparent clash of perceptions between the two Massachusetts-based market research firms about the outlook for transpromo? In this case, the devil is not as much in the details as in the definitions.
Matt Swain, an analyst for InfoTrends, notes that transpromo documents don't have to contain promotional offers per se — alternatively, they can carry informational and educational messages that the document owner wishes to share.
This is how InfoTrends defines transpromo, and transpromo which its 68 percent CAGR forecast includes. Swain says that if the PRIMIR study had positioned its questioning in the same way, “InfoTrends expects that a higher percentage of respondents would have liked the idea of promotional, educational and informational messaging (not ‘offers') appearing directly on their bills and statements.”
Marco Boer, the I.T. Strategies consulting partner who conducted the transpromo-related research for the PRIMIR study, presented a narrower definition to those polled in an e-mail survey. Here, a transpromo document was identified as “a transaction statement that they had to respond to, and it had to have an offer relevant to them.” (Generic onserts such as one-for-all coupons did not count.) About 20 percent of respondents reported having seen a transpromo document fitting the I.T. Strategies description, Boer says.
Sifting the open-ended answers to the question about acceptance, Boer found that 72 percent of respondents feared that adding offers to bills and invoices might make the statements harder to read and understand. Some, he says, even found the notion of targeted promotion “too creepy — it's like they know too much about me.”
Swain acknowledges that the term “transpromo” can be problematic. “In many cases, it scares people away, because they do not want to have anything to do with promotional messaging,” he says.
But well executed transpromo “is more than cross-selling and up-selling,” Swain adds. “Both InfoTrends research and case histories have proven that it is an ideal opportunity to inform, educate, communicate and promote.”
Boer says I.T. Strategies has refrained from making its own market projections for transpromo because of the “quicksand” of definitions in which it seems to be stuck. But, he doesn't dispute the potential of what he calls “true transpromo”: color-rich documents that make extensive use of variable data and can be seen as something more than just “a slightly updated version of direct mail.”
“Intuitively, it makes a heck of a lot of sense,” Boer says.
The Transpromo Summit blended case histories with general advice on the dos and don'ts of transpromo implementation. More than 50 speakers and panelists took part in the four-track program. Suggestions follow.
For document owners, this means every voice — marketing, IT's, creative, production, and management — must be heard and respected to properly align internal resources behind a transpromo strategy.
Sometimes spot color or even plain black-and-white will do as long as the best use is made of the non-transactional “white space” in a transpromo document.
Transpromo is direct mail, and direct mail works best in multi-channel marketing campaigns that also employ personalized URLs, sales calls and other trackable elements.
A transpromo document must contain a mechanism to trigger a response that can be measured. These mechanisms and the results they produce must be evaluated and revalidated continuously.
InfoTrends foresees the price of an A4 (letter sized) inkjet impression declining to a point where the process, especially in continuous-feed configurations, will be competitive with offset in long runs.
As letter rates go up, so does the desirability of reducing the weight of transaction mailers by replacing inserts — traditional bill stuffers — with “onserts” — promotional messages merged into the transaction content without adding more paper.
As Pellow put it in closing remarks, “There are a lot of marketers who are naive and don't understand what can be done with technology.” Their naiveté can be remedied, but only through concerted efforts that teach them about the nature and benefits of transpromo from the ground up.
Most transpromo documents are printed, but they don't have to be — they can be rendered electronically for online presentation, as well. And while there are few guidelines for choosing and using transpromo color on the CMYK print canvas, there are even fewer governing the paperless RGB space.
This was the knowledge gap that a team of graduate students from Pittsburg State University (Pittsburg, KS) set out to fill. InfoTrends invited the students, who are pursuing master's degrees in printing management at Pittsburg State, to present their research in a general session about their efforts to identify an effective color gamut for transpromo documents.
With the help of a grant from the Electronic Document Systems Foundation (EDSF), the three students — Purushottam Deo, Prathamesh Hajirnis, and Rohan Ratnapal — devised an online survey that asked respondents to rate the color schemes of a series of mock credit card statements containing promotional messages. The responses indicated that the colors people favor come from only a small portion of the RGB gamut: darker and lighter hues of the additive primaries; lighter hues, tending toward pastel shades; and, especially, greens and blues.
The students concluded that online transpromo documents don't necessarily have to contain color to be effective, but a few well-chosen colors can increase attention and response. Colors outside the range of respondents' preferences can have the opposite effect. The research team says the same holds true for printed transpromo projects.
The grant in support of the project was one of several ESDF made to student groups this year. EDSF is an organization that provides grants, scholarships, mentoring, and other aid to those researching the effectiveness of document-based communications. The Pittsburg State white paper, produced under the supervision of Professor. Jesus J. Rodriguez of the school's Department of Graphics and Imaging Technologies, will be available for download at the EDSF website (www.edsf.org).
Sponsors and exhibitors at the TransPromo Summitincluded Crawford Technologies, DST Output, Exstream Software, First Data, GMC Software Technology, InfoPrint Solutions, Kodak, Metavante, Océ, Pitney Bowes, Prinova, Printable Technologies, Ricoh, RISO, RR Donnelley Business Communication Services, RSA Solimar Systems, Xeikon and Xerox.