Inline Slashes Cost for High-Volume Direct Mail

When we think about 1:1 printing, we often think about relatively small volume, highly targeted campaigns. Perhaps 10,000 pieces going out to a select customer group, whether because they match the client’s desired customer profile, they are the client’s “A” customer list, or they meet other criteria, such as being part of a campaign to re-activate a dormant customer list.

We tend to forget that 1:1 personalization is happening all around us on a massive scale—and now the quality is getting better and the costs are coming down.

This has reverberations on both sides of the equation. On one hand, it makes high-volume direct mail that much more effective, making the pitch for lower volume, higher quality personalization less compelling. On the other hand, it benefits smaller volume marketers by increasing the acceptance—even expectation—that marketing offers should be personalized.

This month’s case study comes from R.R. Donnelley Response Marketing Services (RMS). Its client, which is under non-disclosure, markets financial services through joint partnerships with affinity partners, such as trade associations, alumni associations, and consumer groups.

The Old Way

Typically, in applications like this, the envelope displays the name of the consumer group, alumni association, or other affinity partner. Inside, the offer is printed on the letterhead of the affinity partner so it appears to be endorsed by that organization.

The offer inside is often something relatively inexpensive, such as travel insurance, roadside assistance, or a rider on the recipient’s home insurance.

Each offer for each affinity marketer is run on a high-volume offset web, changing out the plates each time, with any personalization typically imprinted in black using inkjet, laser, or more rarely, toner. There may or may not be additional paper components inserted, as well.

Once printed, each set of components is moved to the bindery, where the components are matched using barcodes.

In these workflows, there is a high level of inefficiency and unnecessary cost. The marketer might take a two-million-piece run and break it down into dozens of individual runs for each affinity partner. It might have 50,000 of this, 100,000 of that, one million of those. Trying to get it all coordinated can be a logistical nightmare.

The New Way

To bring down the cost and streamline the logistics, R.R. Donnelley RMS developed a new, inline approach. Its proprietary process combines commercial offset web, inline four-color inkjet imaging, and cutting, folding, and gluing in a seamless stream. All of the components, including inserts, are imaged on separate lines, but at the end of the stream, the components reach the collation station together.

RMS’ four-color inkjet heads are capable of printing messages in a wide range of widths, from 1/3-inch up to full page. The offer might say something like, “Jennifer, act now and save 25%!” or “Bob, this is a special offer for [such as such] association only!”

This is a complex, inline process that enables the high-volume cost efficiencies and personalization in four-color without having to stop the press. RMS claims to be able to produce fully personalized packages with virtually 100 percent integrity.

The cost efficiencies can be tremendous. Instead of printing 100,000 pieces per run at $250 dollars per thousand, marketers can now print, say, two million pieces at less than half the cost. Marketers can also save on postage because they improve the density of their postal address strings. By sorting at volumes in the millions rather than the thousands, their postage can drop from $.24 per packet down to $.18 or $.19.

The Challenge

In this month’s campaign, RMS’ client had more than 100 affinity relationships: consumer groups, universities, sports teams, and member organizations. Its challenge was to combine the 100-plus color logos and graphics, terms, copy versions, and up to three financial product offers.

It also adjusted the offers based on income level, current customer score levels, activity triggers, and 50 state codes. This resulted in literally thousands of unique combinations.

Using its four-color inkjet, RMS imaged the outer envelope with affinity logo and offer copy, face and back, along with the letter/reply form with affinity logo. At the same time, it customized the static financial offer coming off the offset press inside the envelope with four variable features and specific recipient offer and selectable copy. Product brochures were added to each package using selective insertion.

The results? By combining more than 100 separate production volumes into a single stream, the client saved between $.10–$.22 per package in production costs alone. Plus, it was able to save $.03 per package in postage. This resulted in an overall postage savings of $33,000 per million pieces due to longer uninterrupted print runs and more dense postal sorts. The marketer achieved an incidental bonus to its cost-saving measures as well—a whopping 20 percent lift in response rates because of the customized offer copy.

Heidi Tolliver-Nigro is an industry analyst specializing in digital technologies. Her e-mail address is htollvr@aol.com.