Transpromotional Printing — Printing that Fills the Bill

Transpromo, adding marketing messages to bills/statements, is a rarity in today’s business climate—a printing segment that promises strong growth. Unfortunately, that spending is likely to come out of a company’s traditional direct mail budget. It’s also not clear if commercial printers are well positioned to compete for this business.

According to research done by InfoTrends, a Questex Co., color digital output of transpromo work totaled more than 1.6 billion pieces in 2006. It’s projecting the annual output to approach 22 billion pieces by 2010, for a 91 percent compound annual growth rate.

Several factors contribute to the bullish outlook for this market segment.

1) Bills and statements enjoy nearly 100 percent delivery and open rates, and consumers are interested in the contents, making this is a desirable target audience.

2) The majority of consumers have yet to embrace online billing and payment, so companies have to do these mailings. That makes them very motivated to offset the cost.

3) Recent changes instituted a very favorable postal rate for sending a second ounce at the First Class rate. This makes it very cost effective to increase the size of bill/statement mailings to accommodate marketing messages.

Although not yet a driving factor, there’s also the specter of proposed “Do not mail” legislation.

Working against these positives is the ingrained corporate mindset of being extremely aggressive on the cost of such documents. As a consequence, the per-page cost of full-color output can send potential users into sticker shock. They must be convinced that the conversion will have an ROI, which typically involves a long sell cycle.

Providing a turnkey solution is one method some service providers have implemented to overcome this resistance. In essence, they give customers favorable cost terms for production of the documents in exchange for the rights to sell marketing messages in the available white space.

There’s Work to be Done

While the demand side of the equation is decidedly positive, there are challenges facing commercial printers when it comes to being players on the supply side. There already is an infrastructure in place for production of traditional bills and statements, although just with good-enough print quality and not in full color. Since executing a piece requires mailing, database and variable data services, companies in those areas of the business are also sizing up the opportunity.

For the most part, printing system vendors believe the same devices will be suitable for both graphic arts and transpromo printing applications. Variable data software (commonly used by digital commercial print shops) plays a role, but the work is chiefly prepared in specialty applications from firms such as GMC Software Technology, Exstream Software and others.

InfoTrends recently put on a TransPromo Summit in New York City that drew several hundred attendees, including current and potential users and service providers, as well as hardware and software vendors. Taken as a whole, the sessions served as a good primer on the business and production issues companies face in capitalizing on this opportunity.

Several success factors kept being raised by speakers regardless of the topic specified for the given session. Among these: Messages must be relevant and channel agnostic; having a good database is critical; pieces must be well designed for the purpose (marketing); and customer education is still required.

In addition, several speakers cautioned that development efforts don’t end when the first piece is mailed. Messaging must be refreshed on a regular basis and should be adjusted to reflect any response to date from a recipient.

Broader use of color is considered to be one of the elements that defines transpromo vs. traditional statements, but it’s not an absolute requirement. Spot color and black-and-white components may be sufficient. Also, there isn’t just one standard for color print quality, asserts Lynne Andrews, variable color market manager at R.R. Donnelley, in Chicago.

Color demands can vary depending on the transpromo application (purpose, revenue potential, etc.) and company, Andrews explains. It makes sense to adjust production values based on segments within the same customer database.

Higher quality, full color digital printing (Xerox iGen3 in Donnelley’s case) and better paper can be used to produce pieces for top tier (highest value) customers, Andrews says. Mixing in ink-jet color may be acceptable for the middle tier, and lowest-tier pieces can be produced entirely by that process.

The choice of production vehicle can have design considerations, such as aqueous ink-jet printing not supporting the same amount of color coverage as toner. It’s not a case of simply doing the existing piece in color, since design changes may be warranted to keep costs down, Andrews points out.

An alternative way of thinking about transpromo color is to break it down into three levels—full, anywhere and select, in declining order of cost, says Cheryl Kananowicz, vice president, sales and corporate communications, DST Output, El Dorado Hills, CA. It’s different from offset color, so clients need to be educated on the application and production of digital color, she contends. “The designer needs to be aligned with the (service provider’s) manufacturing team.”

Expertise in information design, production technology, results measurement techniques and postal optimization is required to craft an effective program, according to Kananowicz. She recommends that clients start on a smaller scale with a clearly defined plan, rather than going big and having to cut back as the full scope of the project becomes too daunting.

Follow the Money

Speaking from experience, Harry Stephens, president and CEO of Datamatx in Atlanta, says it’s important for service providers to get a prospect’s IT and marketing people together at the same table when making a presentation. “You can get knocked out of the running by IT for $.005 a page, so you need the budget that marketing can bring to a project,” he explains.

Stephens says its important to start with a program that will succeed in order to get buy-in and counter the mindset of keeping statement costs to the absolute bare minimum.

As a data center and transactional segment evangelist at Eastman Kodak, Pat McGrew is an advocate at large for the transpromo market segment and not just Kodak’s efforts. She points out that the traditional statement was never actually designed in the true sense.

“People just used as many characters as they could make fit on a line. They focused on jamming data onto a piece of paper,” McGrew explains.

The redesign process for converting a traditional statement into a richer transpromo piece can take six weeks to six months, depending on the condition of the current statement, approval process involved and output device used, says the evangelist. Other speakers at the TransPromo Summit see the implementation timeline ranging from six months to two years, not including the sell cycle.

McGrew agrees with reallocating some marketing dollars to a transpromo program, but advises against completely turning off direct mail campaigns. “Companies should leverage the benefits of each (medium) and do less, but more effective, direct mail,” she says.

Bringing the discussion full circle, Nick Romano, president of the Prinova consulting firm, says its important to keep the purpose of these documents paramount when planning and executing a transpromo program. “Getting the customer to pay the bill is still the main objective,” he observes. PI