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April 2007

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Variable Data Printing: One on One with Your Customer

The emphasis in today’s marketing is to talk one-on-one with your customer. It is being done under various names – One-on-one, Customercentric, CRM, etc. – but it all has the same objective, talk directly to an individual, address their specific needs and solve their business or purchasing problem. Whether it’s business-to-business or business-to-consumer, a personalized message gets their attention and increases the probable return on the advertisers investment.

Ted Walker at the Pressroom stated it clearly, “We are all the center of our own world and as advertisers learn to tap into and make themselves aware of that individual, they’ll succeed more. We all have filters to block out advertising because we see so many each day. This (personalization) is going to cut through that filter because you are talking to me.”

The technology available in the printing industry has progressed to where an advertiser has almost unlimited opportunity to change message and graphics to every individual on their mailing list. The ability to address the recipient by name has been available for several years and, by itself, is no longer unique. I almost expect a direct mail piece to start “Dear Ken” and that alone no longer gets my attention. Now, with a picture of the fishing rod I want with a great fly stream in the background, you have my attention.

The database
So if this type of direct mail advertising is so great, why aren’t more advertisers using it? Simple, it all starts with the advertisers database. It may take several years to gather all of the necessary data to do a totally personalized mailing of several thousand pieces. If you are a jeweler, the graphics in your mailer may contain Navajo jewelry for the person that usually buys Navajo jewelry or gold necklaces for someone that prefers that item. This sort of data is not collected overnight. Every business needs to collect customer information over a period of years to take full advantage of one-on-one advertising. The caveat to this is, be careful not to over personalize and scare your customer because you know too much about them.

Preparing to print
All printers interviewed for this feature made the same statement. “Get your manufacturer involved early in the process to be sure the database supplied is in a form that is compatible with their software and equipment.” Poor data files make it exponentially harder, and sometime impossible, to do variable data printing. The database not only needs the address information, but there must be a field for every change in graphics and text. If this is properly set-up, the printing itself takes no longer than traditional offset printing.

Delivering the message
The completed database is the primary change in direct marketing. What has not changed are many of the traditional rules of direct marketing. The mailing list, testing of copy and offers and good graphics are still key to the success of the project. The rules for the creative have not changed. The offer, the color, the copy, the freebee are all still as important as ever. The difference is now the advertiser can tailor the message and graphic to an individual.

In today’s advertising environment, there will be a greater return on direct mail efforts when the message is integrated with the Website, email newsletter and other media. Similar graphics and message need to be included across all avenues.

For the past 20 years, Gary Wright at G.A. Wright Marketing has been testing every aspect of direct mail advertising. A resent test asked, “Do copy and photos personalized to the recipient pull better than more generic applications?” The report states: While new technology is best utilized with customer databases that contain lots of personal information, it can also be used in acquisition efforts where information is often limited to name, address and in this case, industry type. G.A. Wright took a list of women’s apparel retailers and split it into two groups with about 7,000 records in each lot. The control campaign featured a two-color generic envelope and letter which references ‘retailers” in general. The test campaign featured a two-color envelope, which referenced “women’s apparel stores”, and the letter was personalized to the actual retailer as well as featuring four-color pictures of a women’s apparel store.

The results: The test campaign, which was highly personalized, generated 27%, more responses than the general approach. With higher relevance comes a greater response rate. As today’s technology enables easy storage of data and highly efficient digital presses, testing personalization and the overall ROI generated is possible for businesses of all sizes.

Another G.A Wright test supports the need for using your own database. G.A. Wright had an in-house database of respondents who had requested information about the company but who were not clients. They decided to test their in-house database against a compiled business-to-business list. The big question turned into how time affected response rate. Would a prospect that requested information years ago be as likely to re-request information as a prospect that had made an inquiry within the last year? G.A. Wright’s in-house database was tiered into five segments based on the last year a request for information was made. The segmented lists were then tested against the compiled prospect list.

The results:
Compiled list response rate .306%
Percentage of increase on in-house database:
Current year 1230%
One year back 816%
Two years back 357%
Three years back 315%
Four years back 173%
Conclusion: Strike while the iron is hot. A prospect that had requested information within the past year outperformed a cold prospect list by 1230%.

Variable printing cost
Marketers must learn to evaluate the cost and success of variable data printing, not by the cost of the manufacturing, but by the return to the bottom line. Yes, it does cost more to manufacture variable data printing, but the response and close rate can be much higher.

The marketers selling proposition to management is the concept of spending more for manufacturing and bringing a lot more to the bottom line. Plus, as the database is refined, fewer pieces are needed to contact a far more qualified list.

Jason Scherer at L&M Pressworks stated it clearly, “Which would you rather do, send out a 100,000 piece “spray and pray” mailing and hope you get a .01% response or send 10,000 personalized pieces and get a 5% response from far more qualified leads.”

Gary Wright, in one of his many test cases, did a mass mailing to retailers with a red-hot premium offer that drew a tremendous response that buried his sales staff in totally unqualified leads. This not only generated a huge cost for the premium but also returned nothing on the investment. This points out the need to be sure your database includes the right people and any premium offer is pertinent to your sales objective.

As in any print project, the biggest savings can be made in pre-planning and taking finished materials to the printer. In variable data printing, the database is the key and a very necessary expense for success. Spending time and money on preparing the database correctly can save on the manufacturing costs. Printers are more than willing to work with you in advance to be certain everything is in order before the project starts.

The future is here!
According to Jason Scherer at L&M Pressworks, “I’m excited to see where it all goes. Some of the work is simply amazing and the results people are seeing are amazing. There has been double-digit growth of the past five years and that is not going to let up for the next five years.”

Gary Wright at G.A. Wright said, “If marketers start using information in thoughtful but not in offensive ways, they can build a relationship with the customer and be more responsive to what the customer wants. The integration of various media via telephone, mail and email let (marketers) interact in a variety of ways and we are doing more and more with a variety of channels.”

Ted Walker at the Pressroom states, “We’re going to see more and more of it, it’s going to grow. The printing is just one part of it as there are Websites and other places where they (marketers) can collect information and the good part is it will be integrated.”

“The future is variable data, it may cost a little more per piece but it is a lot more successful and effective which is more important than cheap,” said Bill Jones of Vision Graphics. You may get a .5 to 1.5% return with name only on the piece, but with personalized graphics and message, that can increase return by 135%.”

Mining the database
G.A. Wright had an existing database of prospect information as well as existing clients. The database had been used primarily to handle communication with existing clients and follow-up with prospects. But it was not actively being included within the monthly lead generation program. Through the use of data mining, the prospect database was tiered into multiple segments such as past clients, past prospects that had requested promotional services, past prospects that had requested product information as well a segments based on industry. These segments were included in the monthly lead generation mailings. In addition to mailing monthly to these new segments, the use of personalization was also utilized in order to boost response rates.

The results:
2001 prior to data mining
Pieces mailed – 2,080,986 @ $0.36 ea.
Leads generated – 8,902
Gross profit/pieces mailed - $0.45

2002 after data mining
Pieces mailed – 1,945,290 @ $0.38 ea
Leads generated – 8,573
Gross profit/pieces mailed - $0.51

2003 after data mining & personalization
Pieces mailed – 1,643,382 @ $0.38 ea
Leads generated – 10,488
Gross Profit/Piece mailed - $0.66

G.A. Wright was able to reduce the number of pieces mailed each month by targeting their best prospects. As a result of data segmentation and personalized mailings, even as production and postage costs increased, they were able to control costs and increase leads at the same time. Productivity per piece mailed increased 49% over the course of two years.

The database is king! It takes time to collect the information needed for a truly good database. In the long run, the time is worth the effort. This does not mean you have to hold off marketing with variable data printing until the database is complete. You can start testing various uses of the information you have that will give you direction for future use of the data. The key is to work with the experts that will manufacture the finished product so your files are properly prepared.

As one-on-one marketing increases in importance, so does communicating with your customer as an individual. Personalizing a message makes it relevant and helps solve your customer’s problems or fulfills their needs. This automatically increases your results and ROI needs, a much easier sell to upper management. Don’t forget to test, test, test to continue improving results.

Any company, large or small, B2B or B2C, can benefit from variable data printing in their marketing program. There is no print run too small or too large, as long as it fits your budget and marketing needs. When integrated with other efforts, there are even greater results. The key is to start now, as this is the future for building a personal relationship and maintaining your customer base.

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