First Data — Making a Statement

AT FIRST DATA, there is no question the future of customer messaging is viable and vibrant. The giant firm ($6.5 billion in sales in 2005) recently completed the spin-off of its profitable, but non-core, money transfer unit, which is enabling the Omaha-based company to focus more attention and resources on its fundamental credit card processing and customer messaging capabilities.

Those activities are substantial. The firm sits atop the pinnacle of the steadily growing credit card processing world, handling the transactions of more than 415 million card accounts on behalf of 1,500 institutions and retailers.

Its presence in the customer messaging industry is equally impressive. First Data prints and mails more than 1.7 billion account statements and customer letters a year. Its annual postage bill of more than $500 million makes it one of the largest customers of the U.S. Postal Service.

“In this increasingly fast-paced and fragmented world, the monthly account statement is a reliable and effective customer relationship tool that delivers real and sustained value for customers and businesses alike,” says Dan Oswald, senior vice president of market strategy.

Oswald is one of the key managers responsible for selecting the technologies needed to support the company’s renewed focus on customer messaging.

“Customers like hard-copy account statements because they are regular and relevant,” he continues. “They come at predictable intervals, are fully confidential, can be opened immediately or conveniently saved for a later time and, most of all, contain detailed transaction data and promotional materials pertinent to the customer and the relationship.”

Value-Added Statements

“Businesses also value the account statement channel,” Oswald says, “because it creates a strong linkage with consumers who are increasingly elusive due to a new and mobile lifestyle and advances in technologies—such as TiVo—that hinder the delivery of traditional marketing messages.”

Virtually all consumers open and read account statements, and studies show that the average consumer spends more time reading an account statement than other forms of traditional advertising, including TV, direct mail, direct e-mail and text messaging or SMS.

To capitalize on these trends and opportunities, First Data is increasing its investment in new hardware and software to create a one-stop shopping form of customer messaging solutions for its banking and other clients.

On the print side, the company is acquiring a second high-speed Kodak Versamark digital color printer. While others in the industry still debate the relative merits of digital color for transaction-based mail, First Data has been prototyping dozens of possible uses of the promising new technology.

“One of the challenges, as well as the benefits, of serving such a large number of customers,” contends Oswald, “is we must continually scour the globe for new and cost-effective solutions. A few of our clients insist on being the first with any new technology, so we must be out in front to meet their needs. Others want absolute assurance that any new technology is proven and well imbedded in the industry when implemented. So we must test and refine to make sure the new technologies will succeed in our rigorous, high-volume operation.”

On the mail finishing side, First Data has purchased a “significant number” of the high-speed, high-integrity APS intelligent inserting systems from Pitney Bowes.

“These new, higher-speed systems will boost our throughput and capacity, so we can accomplish more work, at even higher levels of quality, in less time and while using an overall smaller footprint on the shop floor,” reports Tim Rosenthal, SVP of output services.

The First Data investment in new printing/mail finishing equipment will yield faster and more efficient processing. But it is the company’s effort to boost the effectiveness of the account statement itself that is likely to have the greatest impact for customers and accelerate growth for First Data.

The heart of the firm’s one-stop-shopping innovation is called the Strategic Communications Solution. It is composed of the four components of effective messaging today: document composition, customer segmentation, color printing and electronic delivery options.

Variable-design Software

Correspondence Director is a software tool that enables variable design and messaging capabilities. It encompasses key features such as weight and white space management, logos, signatures, variable lines of text and paragraphs, as well as images and graphic devices like boxes, lines, shading and data-driven charts and tables.

Their patented First Data DecisionQuest component, also a software tool, enables target marketing to virtually any customer segment. It allows organizations to quickly develop and launch campaigns and offers involving on-statement messages, images such as checks and coupons, and the enclosure of special envelopes and pre-printed inserts.

“There is virtually no limit to the way an account statement’s targeted messaging capability can be used,” according to Oswald.

For example, an organization could use the account statement to help boost sales in a specific region by announcing the opening of a new, nearby retail location. Or it could extend help to customers in areas impacted by hurricanes, floods or other disruptions.

Relief could take many forms, such as enclosing extra checks with the monthly statement, extending a temporary increase in credit limits, allowing a late payment without penalty, or printing important safety or emergency contact information.

To bring added attention to specific messages within the account statement, or to make the entire account statement more visually appealing, the solution incorporates the use of high-speed color printing in full color and at high quality. It also features the capability to utilize selective perforations, along with MICR printing, to give each page in the account statement a range of one-to-one messaging options that include both coupon and check alternatives.

The fourth component of the solution, called eMessenger, responds to the lifestyle needs of busy and mobile customers by allowing them to select from a range of options to receive the secure delivery of account-related data. These include fax, e-mail and the Web. Customers can also opt to receive activity- or event-related notices via a wireless device such as a cell phone or PDA or via e-mail.

Aside from fostering good customer relations, and lowering the cost of customer care and the paper-based delivery of messages, electronic alerts can also serve to reduce the risk of fraud by alerting cardholders to unusual account activity. The event-related alerts can include notices about pending or late payments, or even special offers related to recent purchases. PI