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Customization: The next frontier for sales and marketing

Peppers & Rogers Group reports that companies using customized digital printing, digital collateral management or enterprise personalization are having a lot of success.

With a left-wing political slant and a need to make an impact, the editors of Reason magazine did something out of the ordinary recently. For its June issue, each of its 40,000 subscribers received a different personalized cover. The differentiating factor: Each cover showed an aerial photo of the subscriber's house. The story the concept was illustrating was "They Know Where You Are," a survey of what the magazine bemoans as the deteriorating state of privacy in American society.

The issue also illustrated something else: That printing technology has reached a point where mass customization is not only attainable, it is becoming an effective business tactic. Imaging hardware giants like Hewlett-Packard, Xerox and Kodak are betting that multinational companies will want to customize billions of dollars' worth of billing statements, business to consumer advertising collateral and internal sales documents. The process is underway with companies like American Express, Sears, Merrill Lynch and Cigna using the new technology to improve marketing efficiencies, cut costs and even increase revenues by becoming more relevant and effective to their consumer base. @5208

"Look at a company like Citigroup that wants to increase its customer base by a huge percentage over the next 10 years," says Michael Charest, Exstream Software sales vice president financial services. "In order to get there, they're going to have to cross sell and upsell their services. And any company, if they want to grow their customer base, is going to have to start looking at their documents as real estate. Because they are your real estate."

So just as Reason magazine used its cover real estate to portray subscriber real estate, companies can accomplish one-to-one relationships using customized sales and marketing collateral. According to companies like Exstream, the success stories for using customized digital printing, or digital collateral management or enterprise personalization, are building rapidly. "Digital collateral management represents personalized marketing," says Derrin Fund, managing principal, Xerox Global Services. "It enables the marketing department to have maximum control of their content."

According to Hewlett-Packard marketing vice president Jean Luc-Neyer, savings from using digital printing strategies can average between 40% and 50% over traditional printing and mailing. He also says clients such as Subway are reinvesting the savings they see from the process into more marketing efforts. So marketing costs are saved, and the marketing effort is doubled.

To understand Luc-Neyer's points, you need to understand the process. Let's take a car company, such as GM. If GM is introducing zero- percent financing on their line of minivans, traditional thinking says it blasts a few million on TV, print, and radio ads to let the world know about the new deal. But how many people who, after being exposed to those ads actually buy a minivan? Or aren't interested? Digital print allows targeting to happen in campaigns.

It begins with the database

But before you see the targeting, you need to have a database that makes customization worth it. If your database is out-of-date or improperly segmented, you won't maximize a customized digital printing effort. Example: If GM has an up-to-date file on customers who leased or bought a minivan three or more years ago, those make good targets for their new offer. If that database is wrong, and the customer gets a customized offer for a minivan, what's their perception of GM's marketing?

"Data consolidation is the biggest hurdle," says Group 1 Software DOC1 marketing VP Ann Jurczyk. "If you don't have clean data, and if you don't add analytic capabilities, you can't be sure that you're getting the most efficiency."

Now let's go back to process. Let's say GM decides to supplement its TV and print campaigns by sending four-color flyers to the best targets for the minivan offer. It contracts with a digital printing vendor to produce the flyers and mail them to the segments of its database that either have children under 12 or have purchased a minivan more than three years ago. The creative for that flyer does not reside only at the printer, as traditional offset printing would have it. The creative resides in a software program that lives on the marketing department desktop. The mailing contains the customer's name, previous models purchased, and even a menu of new models and options that relate to household income.

The goal, in this campaign, is for the customized offer to result in higher interest from the target audience. When it's time to follow up to the segment that responded to the offer, the creative can be reconfigured on the desktop and sent digitally. This supports Neyer's claim that costs can drop dramatically and then be reinvested.

"The promise of this whole process is in the possibilities not yet realized," Neyer says. "Why should a 2% response rate be acceptable for a direct mail campaign? Digital printing raises that bar. These questions and possibilities don't get raised enough." The digital management process is also growing to include Web services and other online applications. Business-to-business applications are particularly suited for these tactics. A growing number of companies have seen the value of delivering customized, personalized and real-time data to customers. What began as "data warehouse" efforts to computerize records matured into "document management" systems as faster computing and cheaper network storage made it easier to control the flow, security, use and revisions of documents that underpin daily work. The addition of video, audio, HTML, XML and other electronic documents begat "digital asset management" or "content management." And all that data can be made available immediately -- along with the entire history of the document's creation, revision and all the parties who shared it.

Copyright © 2004 Carlson Marketing Group, Inc. All rights reserved. Peppers & Rogers Group is a Carlson Marketing Group Company.

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