Feeding “Big Data” privacy concerns and paranoia this summer is the whistle-blowing story of Edward Snowden. In June, the 29-year-old former defense contractor exposed the National Security Agency's massive domestic surveillance program. Google has subsequently filed a First Amendment court petition.
Around the same time, research firm InfoTrends released findings of a five-month, U.S. study forecasting that 8.6 billion consumer bills and statements will be paperless in 2017. This conclusion is based on more than 2,000 consumer surveys, 267 business surveys, and some 20 in-depth interviews conducted with key stakeholders in the transactional communications value chain.
Will bills and statements ever be all paperless? The transactional communications market—including bills, statements, legal notices, letters, payment due reminders, and confirmations—continues to evolve due to changes in consumer behaviors and business policies, pointed out InfoTrends, as well as advancements in technologies and services. “Bills and statements are opened and read more than any other business communication,” commented study director Matt Swain. “As consumers increasingly interact with their providers on the Web, via mobile apps, through e-mail attachments, and using consolidated channels, it is critical for providers to have a multichannel communications strategy that optimizes print and electronic channels.”
Truth be told, the OEM players don’t like the term “transpromo,” especially since the medium has come under heavy fire. HP prefers “data-driven direct mail,” while Xerox opts for “transactional marketing.” Software vendor GMC likes “targeted messaging services.” Others refer to it as IT output and marketing. Whatever euphemism is picked as a description, there is no denying its power in print and in the mailstream. There’s also no denying the industry trends of increasing electronic migration, shorter run lengths, and more color.
“The cost per page for color inkjet print is very competitive with the cost per page for roll-fed black and white,” noted Jamie Harris, VP of diversified services in North America for GMC Software Technology. “We have had a service bureau replace over 20 continuous forms lasers with two wide-web full color inkjet printers. The savings in hardware leasing and maintenance, along with the reduction in floor space needed for printers, more than made up for the slight difference in the raw cost per page.”
Pat McGrew, formerly with Kodak and now production mail evangelist within HP’s Inkjet High-speed Production Solutions Group, admitted that “transpromo got a little data happy, and there was a backlash. People felt like retailers and credit card companies were watching what they bought all the time. It got a bit too invasive, perhaps.” But there are noninvasive ways to capture data used to inform customer communications, McGrew added. “The automotive, grocery, and retail industries have learned how to use limited pieces of data that are still highly relevant. There are best practices for aggregating data and creating profiles,” she noted.
The market for transpromo print is in decline (see chart), marked by fewer equipment installations and faster, more productive printing systems. High-speed production inkjet web widths started at 30 inches in 2008 and now go up to 42 inches. With their enhanced speeds (up to 1,200 fpm on a 40-incher) and improved imaging quality, these digital devices are taking more work from the offset platform. The inevitable end result: less paper output. In the United States, fewer than 19 billion printed documents will be delivered through the end of this year, compared with 19.5 billion in 2012, according to InfoTrends. Next year, that number is expected to be below 18.5 billion and dropping steadily.
Average transactional job run lengths have come down to the point that it no longer makes sense to order and store pre-printed stock, said GMC’s Harris.” Also, the burden rate due to time lost to swapping between pre-printed stocks means that white-paper workflows make more and more sense,” he noted. “We offer an application within GMC Inspire called Inspire Consolidate, which is able to merge multiple short jobs into optimized long-run jobs to take best advantage of the speed and flexibility of white-paper inkjet production.”
There still is plenty of printed transactional output to be had in 2017 and beyond. “The decline is occurring at a rate of about 3 percent year over year,” said McGrew, “but there are still many billions [of pages to be printed] over the next 10 years.” Her counterpart at Xerox took it a step further: Expect transactional print marketing in to be around in the year 2033, projected Shelley Sweeney, VP and GM of Xerox’s Service Bureau and Direct Mail Sector.
E-communications preference such as electronic bill presentment and payment are not necessarily generational, as Xerox learned last year. Its 1:1 Lab partnered with Miami University to market to high school junior honors students. Surprisingly, perhaps, some 60 percent of the 16- and 17-year-olds targeted said they prefer hard-copy communications to electronic alternatives. (See “Press ‘Print’ for Transpromo”)
Even 20 years from now, when most of us will have a lot more gray hair and wear older people’s clothes, we and our younger consumer counterparts likely will be opening printed statements that arrive in the mail, Sweeney said. That’s because the use of transactional data packs a 1-2-3 punch, she added: 1) applying “intelligence,” 2) using relevancy, and 3) adding full-color printing. It’s not just the print medium working by itself, of course. “The opportunity is most powerful when different media sources are combined,” she noted. “I don’t think the printed component is ever going to go away because paper will still deliver the highest response rates. Plus, even young people want a paper trail.”
Healthy and Thriving
HP’s McGrew agreed. Respected industry research in the late 1990s predicted the death of transactional printing by 2003, she recalled scoffingly. “Analysts said nobody would send bills in the mail by 2005. But with online bill payment, you log in, push a button, and leave – there’s no engagement,” explained McGrew. But employing a multichannel combination of online and offline communication allows for the creation of a cycle of engagement via special “discounts and deals.” Savvy transactional marketers use the print medium to drive customers online, she noted, “where they are then entitled to get more information. For example, a printed bill can include an offer for a five percent discount on gasoline purchased for the month if customers set up an online account. The next month could be five percent off groceries or landscaping supplies.”
There is also the “mobile” element of mobile communications to consider. “A person in his or her late 20s may have had as many as 10 different phone numbers,” McGrew points out, “not to mention email addresses.” Younger people seem to like changing and experimenting with their online personas. Each may have four active Twitter accounts, for example. “There’s no guarantee that and e-bill will find them,” she noted, “but they’re confident that paper and the USPS will. Contrary to popular belief, not everyone hates mail – definitely not the majority.” Even though many people may prefer to pay their bills online, McGrew explained, they still want to receive printed statements in the mail.
Harris concurred. “Issues with electronic delivery will continue to cause a very significant number of recipients to still demand paper statements, even when they might pay online,” the GMC executive stated. “A surprising bit of research showed recently that a large portion of the Millennial generation, once they are on their own and have to pay their own bills, still want physical delivery of important documents like statements. E-mail addresses change frequently and there is no equivalent to the USPS forwarding service. Bill notifications get routed to spam at the e-mail border server, even before they make it to a local e-mailbox. The associated penalties and fees make e-delivery less attractive to the end-user ….”
McGrew concluded that the proverbial pendulum has swung back. “Opinions have changed, and all online all the time is not the answer,” she observed. “Banks and credit card companies want to cut costs, particularly postage, but they cannot keep people online. The Internet goes up and down; it gets hacked.” Also, the general public is more aware now that digital is not necessarily “green,” she said. On the legal front, opt-out print legislation has proven difficult to get passed.
“Data is the single most important element,” Xerox’s Sweeney continued. “It’s the driver.” And having access to the data is the sweet spot, she continued. “Then you can add logic to it, monitor it, refine it, and tweak it. This is an ongoing process.” The number of print firms and service bureaus in the high-volume transaction market is limited -- not even in the hundreds – partly because of the complex data/analytics component skill set (which smaller print service providers can acquire, Sweeney stressed) and partly because of the Internet and 4G network security challenges involved.
The cost of “care and feeding” the creative content into the transpromo solution can be an impediment, Harris of GMC added. “In many ways, this is the biggest issue faced by companies as they manage a transpromo workflow. One of our earliest and very successful users found that, after about two years of using transpromo aggressively on all statements, they were managing over 150,000 pieces of content. GMC is able to assist in this task with an application called Inspire Content Manger, which allows web users to upload content through a browser interface. This shortens the creative and approval cycles dramatically,” he explained.
“Going a step further … Inspire Interactive allows web users to directly create and edit transpromo content via their browser. Once created, the web user can specify effective dates and rules around how a particular piece of content is to be displayed on a statement,” Harris continued. “Inspire Interactive’s instant proofing will show them what their message looks like when it appears on the live statement.”
Sweeney called the transactional marketing space “healthy, even thriving” despite decreasing volumes. “The space is evolving. It’s bigger than transpromo,” she explained, citing the creative example of European fashion retailer bonprix, which is using transaction data to personalize full-color wraps for its retail catalogs. Featuring up to 64 different customizable fields, the variable imaging and messaging is produced on a Xerox CiPress 500 Production Inkjet System at Print-to-One, the German VDP subsidiary of print firm CW Niemeyer Druck. After aqueous coating is applied, the six-page cover wraps around offset-printed body pages. Coupons and response cards are integrated within the catalogs. Bonprix is one of Europe’s leading mail-order providers, serving 14 million customers in 40 countries
Since last July, Print-to-One has been using its CiPress 500 to produce direct mail and other inkjet marketing pieces that mimic the look and feel of offset print on uncoated, matte stock, Xerox reported. For the bonprix mailings, 130-gsm CrownForm Laser woodfree media from Crown Van Gelder is used. Digital press runs range from the high hundreds of thousands to the low millions. The 11 percent response rate is four times higher than prior static versions, and some 90 percent of what customers have purchased is products depicted in dramatic photography on the personalized covers. Xerox pointed out that CiPress output is certified deinkable by INGEDE.
Online to Offline
At the upcoming, quadrennial PRINT 13 show in Chicago, Xerox’s focus will be on workflow, reported Gina Testa, VP of Graphic Communications. (See the CiPress in Booth 1202 at PRINT 13, September 8-12.) For the bonprix work, its FreeFlow Print Server is employed along with the Inspire enterprise communication platform from GMC Software Technology.
Also at the PRINT show in September, GMC will demonstrate (in Booth 4840) its latest solution. “Inspire Dynamic Statement is a new type of dynamic communication that harnesses disruptive technology -- and which you’re going to see more of in the future,” said GMC’s Harris. It is able to present the recipient’s personal information in an attractive, user-configurable format that works both online and offline. McGrew from HP has stressed that toggling from “O to O” (online to offline, and vice versa) is critical to the customer engagement cycle.
Harris continued, “We have taken advantage of the most pervasive Internet technology, HTML5. This new standard allows a user to interact with their statement and supports both embedded as well as hosted content -- really the best of both worlds.” Extra content also can be embedded so that, even in an offline mode, transpromo content can automatically tailor itself to the place and manner that the statement is being viewed. “For example, when someone clicks for details on a grocery transaction, a related offer can appear in the messaging area,” he explained, “and when they click on an airline ticket purchase, a related travel offer can display.
“Just offering ‘print on paper,’ even if it is in color, on time, and priced right, is not enough to hold onto accounts. Inspire Dynamic Statement can be a “point of difference” that can give a printer a powerful advantage over their competition,” Harris added.
Should You Offer Transpromo Services?
Should traditional print service providers (PSPs) offer transpromo? If so, how can they sell it? IWCO Direct QuadDirect and RR Donnelley Business Communications Services (BCS) are three large printing companies who play in this space, but none was willing to share their trade secrets with MPR readers. From three production sites, Donnelley BCS reportedly outputs some 30 million pages annually for one of its financial customers. “We’ll pass on offering guidance to others in our industry about what they might sell and how to do it,” was communications EVP Doug Fitzgerald’s email response to an interview request.
But Jamie Harris, VP of diversified services in North America for GMC Software Technology, offered some advice from the vendor perspective. “Targeted messaging services [transpromo] are another piece in the printer’s portfolio that can position them beyond the price/delivery trap. In order for their buyers to pay money for the service, however, it needs to be packaged correctly,” Harris suggested. He agreed with HP’s Pat McGrew and Xerox’s ShelleySweeney that the strategy needs to include coordination across paper and electronic delivery channels.
“Metrics and analytics are a given for electronic delivery. For print, trackable web links in the print piece, use of barcodes such as QR where appropriate and when they link to something of value to the reader, along with consolidation of all fulfillment data are something that enterprises value,” Harris noted. “Allowing a client’s business users to control their own message areas via a browser interface brings together an offering that goes beyond [the] ‘dots on paper’ that anybody can provide.”
Harris did not even mention the old standby of selling white space because, he warned, “this is incredibly difficult to be successful at, due to the fact that neither the typical enterprise client nor the typical printer have the expertise or resources available at hand to market what is actually advertising. To date, successful transpromo has been much more of an ‘inside-out’ rather than ‘outside-in’ sell. The offers tend to originate from within, say a phone company, than from without such as from Samsung or Apple promoting new devices on the phone bill. That being said, our clients who have done it well have been rewarded very profitably both themselves as well as for their clients.”