Digital Printing, the Marketing Edge

Digital Printing, the Marketing Edge Hewlett-Packard Company Frank Williamson

April 21-22, 2010 ď‚Ť San Antonio, TX

ask yourself?

• Where is my business today?

• Where do I want it to be in 12 months?

• How am I going to get there?

• Click to edit Master text styles

“ In the past, printing was based – Second level on• the quality of the output. In Third level the future, printing will be based on how the quality of the output impacts the outcome.”

Gerald Fruehwirth Ontario Association of Quick Printers

© 2008 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice

Progressive Profitable Printing

guidance for 2010: move back in control

Moving from 2009 to 2010‌Moving from: 1.

Budget Bust to Budget Build

2.

"Watching" Digital vs. "Doing" Digital

3.

Organization Chaos to Organization Command

did you know that?

* 30 - 40% of bestseller books printed never get sold * 60% of newsstand magazines are wasted * Between 25% & 65% of all Marketing materials go unused * 97 - 98% of catalogs do not generate response * $17B of print is obsolete annually in the U.S.

top marketing challenges

•

Measurability – desire to choose advertising mediums that will offer measurable response rates and accurate ROI assessment

•

Rising costs and tighter budgets – desire to cut inefficient or immeasurable campaigns

•

Need to retain existing customers –retention, crossselling, up-selling

•

Need to acquire new customers

trends in direct marketing • Use multiple channels – email, web, direct mail – 71% use direct mail – Web marketing and direct mail are very close in percentage of marketing spend

• Postage comprises about 26% of direct mail costs – Print related costs represent around 46%

• By 2012 55% of direct mail printing will be full color – The use of color is directly tied to the return on investment

• About 43% of direct mail spending is with external service providers – Primary selection factor is the ability to provide a full range of services Source: Trans Meets Promo… Is It More Than Market Hype?, InfoTrends, 2009

factors when deciding to produce direct mail outside How important are the following factors in making the decision to produce direct mail OUTSIDE your organization?

Source: Trans Meets Promo‌ Is It More Than Market Hype?, InfoTrends, 2009

quality of color direct mail pieces How would you characterize the quality of the color direct mail pieces that you send?

Source: Trans Meets Promo‌ Is It More Than Market Hype?, InfoTrends, 2009

with color, marketing effectiveness increases significantly •

Color strengthens brand image and improves message clarity

•

Color gets attention: Increases willingness to read by 80% – Improves memory by 75% – Outsells black and white advertising by 88% Color Case Study: Cable TV Company –

• Compare B&W direct mail vs. color direct mail pieces.

The call to action asked customers to sign up for digital phone service • The cable operator experienced a lift of 27% in response rate for the color group over the B&W group • Faster responses for the color group: 50% of the color offers replied in the first 2 weeks of the 4 week campaign, vs. only 2% of the B&W group Source: Infotrends, Loyola University School of Business; case study presented in 2009 TransPromo Summit

reasons for using digital color in statements Why are you using color in your statements?

Source: Trans Meets Promo‌ Is It More Than Market Hype?, InfoTrends, 2009

POD publishing

• True Print On Demand (POD):  

Represents one-off printing

 

There is no physical inventory



It is relatively rare, but it accounts for a growing segment of the market

The book is not printed until an order is received

It is only feasible with highly automated digital print

-

Photography Books, documentation Collateral, brochures, fulfillment Amazon.com, BookSurge, Lulu.com

training/instructions manuals & technical documentation • Lack of awareness around the cost of document obsolescence  Inventory of unused pieces – 5-20% of original order is thrown out

• Obsolete content  Information changes the minute a job goes on the press

• Going digital significantly reduces the amount of obsolescence  Some manufactures of big ticket items only print manuals for items that are shipped - Only print what they need for the next day/week instead of month or year

variable data applications • Print quality is a critical factor –The economy has driven print buyers and document owners to scrutinize every dollar being spent • High emphasis on ROI • Print quality is a key metric of value and is also very subjective

–Marketing professionals obsess over quality • Always comparing digital to offset • Not always aware of the improvements that have occurred in digital

–Speed and productivity are always important • To handle tight deadlines and growing quantities

personalization adds value Benchmark information for relevant marketing programs • Guidelines you can use to estimate response rates. • Static mailings range from an avg. of under 2% to 4.5%. Relevant campaigns range from an avg. of over 3% to 13%.

Walt Disney World welcome mailing letter • Business Need – Reduce cancellations on vacations booked at Walt Disney World Resort (WDW) – Increase Theme Park Ticket Sales – Increase WDW Ancillary Business Revenues

• Strategy – Welcome Mailing Letter - first in a series of customized communications sent to guests in anticipation of upcoming vacation – Communication designed to: • Reinforce decision to vacation at WDW • Reinforce their vacation choices • Recommends dining options, special events, entertainment and recreation

Walt Disney World welcome mailing letter • Results – Payback of 80.1 • $80 returned for every $1 invested in the program – Driven by incremental reduction in overall cancellation rate – Increased sales of specific vacation tickets by making targeted recommendations – Increased entertainment revenue by recommending specific entertainment options rather than all activities

Jay Pontiac Buick personalized direct mail marketing • Business Need:

– Increased vehicle service orders – Improved CRM through personalized service reminders

• Strategy:

– Use rich vehicle history data to predict services needed – Encourage retention via highly relevant content – Offer discounts on the service they need now

• Result:

– 21.2 % response – 43.4% of recommended services were sold – Over 10 new dealers ready to go live!

customer page growth by application in 2009 Marketing collateral

+48%

Photo +177%

Labels +77%

Books +107%

Direct mail +28%

It’s All About: Relevance Relevance Relevance

Š 2006 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice

relevance drives response • Relevance is the single largest lever on response in individualized marketing communications • Relevant campaigns show at least 3x increase in response over those that are just personalized Relevant

At least 3x lift Personalized

the value equation

• Relevant

=

• Customer Driven Revenue Growth

• Focused

=

• Customer Retention

• Well Timed

=

• New Customer Acquisition

value pyramid RTM Timeliness, Relevance, Easily Accessible

Where are we now?

How do we reach the top?

Personalized Marketing (variable data printing) 1:1 relationship w/customer Consistency in look and feel, lower cost Customized, Distributed Marketing Lower distribution costs, improved timeliness, branded globally, printed locally Short-run, Print-on-Demand, Marketing as Needed Less, inventory, improved targeting & timeliness Market to the Masses Run size, exceptional quality, cost performance

Value

how to get started: rethink your focus From

To

Time to print

Time to market

Cost per page

True cost of ownership

Just in case

Just in time

Reach the masses

Capture the individual

Print volume

Print value

Customer Reactive

Customer Proactive

Provider of just print

Provide solutions to problems - consult

Cost of the job

Results of the program

test case: return on investment Not Personalized

Personalized

Budget

$20,000

$20,000

# of pieces

50,000

20,000

Rate of Response

2%

10%

# of leads

1000

2000

150

300

$75,000

$150,000

Less cost of the project

$20,000

$20,000

Total Profit

$55,000

$130,000

# of orders (Used a 15% order ratio)

Revenue (Used a $500 order value)

*Increase in profit is 42%

trends, drivers, and forecasts • Mail remains an effective marketing tool • Direct Mail spending continues to grow, however, not as fast as online advertising • Direct Mail print volume will flatten out by 2020 • Direct Mail combined with the internet is more effective than either medium alone • Personalization and Relevance add value • In today’s economy “eyeballs” have value.

essential guidance for marketing execs in 2010  “Bundle” your new budget requests

with budget savings

 Do not lose control over

the “Three Pillars” of Marketing (Product, Price, Placement)

 Create new Sales Enablement Tools  “Go Digital” with strong corporate-led

digital marketing operations

“For years we have marketed to the averages.

In the new century we will market to the differences.”

Frederick B. Newell CEO Seklemian/Newell (‘The new rules of Marketing’ 1997)

Digital Printing, the Marketing Edge Hewlett-Packard Company Frank Williamson

April 21-22, 2010 ď‚Ť San Antonio, TX