Case Study: SourceLink--Optimizing Marketing in De-regulated Industries

SourceLink, a provider of data-driven direct marketing services, uncovered a unique niche in offering firms born out of industry deregulation with incentive-based customer acquisition programs powered by variable data and high-speed inkjet printing. Market deregulation continues to change the way some markets operate. Those that were once heavily controlled by government mandates and regulations are finding that they must actively compete for business in a deregulated environment.

The overall impact of market deregulation is that businesses within that market can be more competitive, as they are bound by fewer laws controlling how they price and supply their goods and services. Examples of recently deregulated industries are the energy, utility, and telecommunications markets. Market deregulation has made utility markets (e.g., electricity and telecommunications) more competitive as it has opened the door for new players to enter the market, forcing all companies to actively compete to attract or retain customers. Deregulation expands consumer choice in who they can buy electric, telecommunications, or energy from. This means that customers can shop around for more competitive rates or special incentives for particular services.

SourceLink, a large privately-held CRM/Direct Marketing Agency and one of the top three suppliers to the U.S. Government Printing Office, identified an opportunity to help new entrants in recently deregulated markets capture clients (individuals and businesses) with customized variable data incentive programs. SourceLink is putting direct mail to work for utility, telecommunication, and energy companies by providing customized incentives programs with valuable rewards, including cash back, hotel, airline, retail, and even education rewards with contributions to 529 college savings plans.

Increased competition in deregulated markets has firms in these markets partnering with major airlines, hotels, and retailers to provide loyalty reward incentives to “switch” to their company. These programs require blending partner loyalty program databases with demographic and location information to create targeted offers to drive customer acquisition. According to Pat O’Brien, Senior Vice President and Chief Marketing Officer at SourceLink, “This is an application that is clearly enabled by a combination of our variable data management capabilities and high-speed inkjet technology.”

He continues, “The ability to handle a ‘white paper in and color out’ process has made it affordable to deliver rewards-based customer acquisition programs that would not have been cost-effective with traditional technology. We work with the deregulated firms to create matrices linked to demographic data and individual reward program affiliations.”

According to O’Brien, consumers are presented with custom incentives that offer rewards points in a selected partner if they sign up as a new customer. “Each offer is unique to the individual. In addition, each specific state requires different compliance language. In one of our campaigns, there were 17 different variables and 175 potential different versions. Full color is critical. Program partners want their image properly represented.”

As new firms emerge as the result of deregulation, they want to grow their customer base by incenting consumers to switch. High-speed inkjet and SourceLink’s complex variable data skills, plus the ability to take a roll of plain paper in and deliver full color out, is providing significant value to utility or telecommunications firms trying to incent consumers to change providers.

O’Brien concludes, “The Océ JetStream inkjet technology, combined with full-color variable data, opens up many new doors for targeted, niche, personalized products. It offers the ability to optimize marketing investments with affordable digital color and the associated improvement in response rates, time-to-market, and reduced call center traffic. For high-volume producers like SourceLink, it is also becoming an operational imperative for overall cost reduction.”