The TransPromo Revolution

Over the past 18 months, a combination of new technologies, postal changes, and market conditions have created an environment in which transaction documents such as statements, invoices, and notifications can be used effectively to generate sales and long-term relationships. Now, companies are starting to use these communications to create ongoing, sustainable customer dialogues that promote products and services in addition to communicating transactional information. This transition is being coined the "TransPromo revolution," and it is resulting in the use of more attractive, easier-to-understand statements that also encourage buying and other desired behaviors.

Key TransPromo Drivers

There are four key drivers that make right now the perfect time to adopt TransPromo:

o The need for better ways to reach customers

o Advances in technology

o Savings on postal costs

o Challenges faced by the Chief Marketing Officer (CMO)

Reaching Customers

While the statistics are all over the map, one thing is clear: today's consumers are drowning in a sea of unrelated marketing campaigns. Corporate marketers are seeking new methods of communication that cut through the clutter of marketing messages that consumers are exposed to every day. As most companies are placing an increasing emphasis on marketing ROI, marketers must seek ways to communicate with customers in a manner that is likely to carry some level of certainty that the message actually reaches the recipient. Unfortunately, many conventional methods of communication can make it difficult to determine which messages are actually getting through. To further complicate the situation, consumers are becoming much savvier about filtering out unwanted information.

Nevertheless, one document that is always opened and read is a statement or notification. Because 95% of transaction documents are opened and read, they provide an excellent vehicle for reaching customers with other types of messages and information. Studies have shown that on average, a consumer will spend one to three minutes reviewing a bill--that is how much time the marketer has to capture a recipient's attention when using the transactional document as a marketing tool.

In addition, in InfoTrends' 2006 Future of Mail study, respondents were asked to evaluate two different types of statements. One was a traditional statement that generally arrives at their doorsteps and includes advertising inserts, and the other was a document with graphics and offers printed on the face of the statement that are relevant to their account information--in other words, TransPromo documents with "onserts." Not surprisingly, statements with personalized onserts were preferred by nearly two thirds of respondents. There is no question that TransPromo implementation carries an incremental cost, but many marketers are finding that their return on investment from TransPromo communications more than offsets this cost.

Advances in Technology

The technologies available in the marketplace today that can be used to facilitate TransPromo communications run the gamut from digital color toner and inkjet presses to software, content management, and workflow solutions. These technology options open the door for organizations to use the data contained within the transaction document to personalize customer communications with marketing messages.

Digital color presses are clearly a key enabling force that is driving the transpromotional market. Because the price/performance ratio and quality of these presses has improved, organizations can more easily and affordably colorize critical transaction information contained in these documents and add promotional messages--including text, graphics, and coupons--to capture a customer's attention. Study after study has proven that information printed in color is far more likely to be read and retained than information that is printed in black & white.

One past barrier to the growth of using full color transactional documents was the incremental cost per page that was encountered when using full color. Nevertheless, operating costs for these presses have since dropped significantly and are now as low as 3 to 10 cents per page. Recent survey statistics revealed that about 46% of businesses use some digital color for their transaction printing, up from 39% in a 2002 survey. Studies have shown that the effective use of color and personalization outsells traditional black & white messaging by as much as 80%, and color production costs continue to fall.

In an analysis of the cost (not price) of producing a TransPromo document, InfoTrends found that for a 4-page document in which pages 1 and 3 are printed in full color and pages 2 and 4 are printed in monochrome, the net total cost difference per document was only $.0654 over using pre-printed color forms with black print. The pertinent question is, are your customers worth an additional investment of $.0654 per document? For many organizations, the answer is yes. Some organizations are also finding that many new income sources offset this expense.

In addition, there are a number of new digital color print engines as well as enhancements to existing printers that are making it easy for organizations to colorize documents. Well-known vendors like Kodak, HP, the InfoPrint Solutions Company, Xerox, Canon, and Océ are delivering affordable, high-quality solutions to the market that are ideal for TransPromo production.

As a result of these advancements, document owners are projecting that by 2010, 33% of transactional documents will be printed in full digital color. In a nutshell, marketers agree that color matters, and most are willing to make the investment!

Savings on Postal Costs

One of the benefits of TransPromo is that it provides the ability to gain further use of transaction documents, which are already being mailed anyway, by blending promotional and other messages into one document. This consolidates the amount of mail the recipient receives. Inserts, of course, can also accomplish this, and mailers have gotten very good at stuffing envelopes with just enough material to stay below the one-ounce mark. Recipients, however, often tune out inserts (perhaps as many as two thirds of them), and many mailers feel that the effectiveness of inserts has declined substantially. TransPromo offers an opportunity for mailers to consolidate mailings and make use of a new tool that will (at least for some time to come) attract the attention of recipients because it is new, unique, and innovative. In many cases, the number of offers as well as the relevance of those offers can be increased without incurring incremental postal costs when employing TransPromo communications.

Challenges Faced by the CMO

TransPromo solutions can have a major impact on marketing effectiveness, helping to improve the CMO's job performance. Today's CMOs have one of the most precarious jobs in the C-suite, as they face the conflicting challenges of new channels of distribution, a 24/7 global economy, pressure to deliver identifiable ROI on their marketing spend, and the need to work with rapidly evolving technologies that are changing the face of marketing. Marketers are being required to more efficiently and effectively segment their markets, attract new customers with continuity campaigns that cultivate engagement, support multiple channels of distribution with comprehensive materials aligned to the specific channel, identify cross-sell and up-sell opportunities, and maximize the lifetime value of the customer.

Due to these challenges, CMOs in all organizations are looking for support in some very specific areas:

o Improving market reach

o Acquiring an integrated view of the customer and the ability to take advantage of technology to learn more about customers

o Compressing the campaign design-to-execution cycle to improve time to market (statements and transaction documents typically go out monthly, so this gives the CMO the ability to plan)

o Using low-cost electronic media such as the Web, e-mail, and SMS

o Measuring results from marketing campaigns

o Justifying marketing ROI

TransPromo communications present a way to support the CMO in all of these areas, making them a vital aspect of the print service provider's portfolio.

Learn More about TransPromo at ON DEMAND

To learn more about the TransPromo opportunity, attend ON DEMAND Conference & Expo March 3-6, 2008 at the Boston Convention & Exhibition Center. Leading providers of hardware technology and software services will be on hand during the expo to demonstrate the latest solutions that can help you make TransPromo a reality in your business. In addition, the ON DEMAND conference will feature a "Hot Topic" day dedicated to TransPromo issues. Co-hosted by Xplor and InfoTrends, session topics include market overview, new technologies, creating the right marketing mix, avoiding common mistakes, and end-user experiences. To find out more, visit www.ondemandexpo.com.

About InfoTrends
InfoTrends, a Questex company, is the leading worldwide market research and strategic consulting firm for the digital imaging and document solutions industry. We provide research, analysis, forecasts, and advice to help clients understand market trends, identify opportunities, and develop strategies to grow their businesses. Additional information about InfoTrends is available on the Web at www.infotrends.com.