One-to-One Marketing
We’ve all been exposed to Variable Data Printing (VDP). Who among us has not received a “personalized” letter: “Hello John! How are things at 31 Elm Street?”
But in recent years, VDP technology has advanced so far (and so quickly) beyond its primitive beginning that the marketer’s dream of true 1:1 marketing – a pitch tailored just to you and only you, reflecting your demographics and buying habits – is actually in reach.
Transaction Marketing: VDP Begins to Mature
The first market for more mature Variable Data Printing was transaction documents, such as credit card statements. “As a direct marketing company, we realized there was an opportunity to integrate statements into a customer’s marketing plan, “ says Theresa Cloutier, Senior Vice President of DMM, a New England direct marketing services company (www.thinkdmm.com).
Statement printing was already VDP, of course – each statement was different, reflecting the customer’s purchases – but this was basic mail-merge technology, entering data into fields on a pre-printed shell. However, the company mailing out the statements had plenty of data about its customers. Why not use that data to customize a marketing pitch, for example promoting travel to customers who had been buying a lot of airline tickets?
“At first, the color side wasn’t there,” says Cloutier, “and we still had to use pre-printed shells. But in the past couple of years, the color functionality has really come into its own.”
The Digital Printing Revolution
In 2003, when DMM began integrating 4-color digital printing into its process stream, the technology was still considered a poor cousin to high-end offset printing. Today, with the best digital printers, it’s hard to tell the difference.
What makes this revolutionary is that digital printers, operating at electronic speed, can print each piece differently. The Raster Image Processor (RIP) of the printer combines the “shell” information with the variable information and prints it on the fly. Now the variability of your mailing (including electronic mailing) is limited only by your imagination – and by your ability to manage the data.
Jim Hackett, President of Indivia, a direct marketing firm specializing in the strategy and implementation of individualized communication (jhackett@indivia.biz), gives the example of a bank in Chicago that wanted to sell more checking accounts. They had 11 different kinds of checking accounts, and had been marketing all 11 in a single mailing.
Indivia analyzed the existing customer base, and developed a demographic profile of the customers who had each type of account. They then matched that with the demographics of the prospect list, and featured a single checking account in each targeted mail piece.
Beyond that, they printed a picture of the bank branch nearest to each prospect, and varied the offer to further individualize the mailing. The unit cost was higher, of course, but in terms of new accounts opened, the ROI was “significantly greater” than that of the old, one-size-fits-all mailing.
“It’s a direct marketer’s dream come true,” says Hackett. “Print technology has finally caught up with database technology. Now it really is one to one.”
The Devil is in the Data
The first step in a VDP campaign is to figure out what you can learn from the customer data that you have. Ideally, you will be working with a customer relationship management (CRM) database that will allow you to slice and dice your customer and prospect information in different ways.
In order to design the campaign, you need to know what you know. “Don’t even start on the creative until you know about the population,” says Hackett. “In this new world, data drives everything – the strategy, the creative, the offers, the medium.”
You will also need a digital asset management (DAM) database to handle the variable text and images, and specialized software to apply business rules to the data stream and run the two databases and the digital printer in perfect harmony. VDP software can run from simple, off-the-shelf programs to $400,000-plus products that can do anything.
As you move up the ladder away from simple mail-merge, it becomes increasingly critical to have a skilled database programmer on your team, somebody experienced in data mining who can not only make sure that the whole system runs smoothly, but can help you identify opportunities in your data as well.
You don’t have to do it all yourself. Specialized variable data service companies such as DMM and Indivia can handle the technical aspects, function as project managers and help you analyze the results.
Crafting Your VDP Campaign
“It’s far more compelling to vary the images or graphics as well as the text,” says Cloutier of DMM, “but you need to get your clients to think differently. This is pretty new to a lot of them.”
After determining what the data can tell them about the customers and prospects, DMM and the client establish the goal and strategy of the campaign. Then a copywriter and a graphics expert create the variable elements. It’s not a good idea to flaunt the fact that the message has been personalized. “The point is to speak relevantly to the recipient,” says Carolyn Valiquette, General Manager of PODi, the Digital Print Initiative. “The designs have become more subtle, and the response rates continue to climb.”
DMM starts with a pilot program, with its own unique URL; the current (non-VDP) mailing is used as a control. An elevated response rate is the green light for full production. Fulfillment pieces going back to responders can also be personalized using VDP.
Conventional direct marketing campaigns typically produce a 1% or 2% response. Response rates of 20% and even 40% have been reported from VDP campaigns. “The cost per unit is greater,” says Cloutier, “but you have to get your clients to think differently. What they should be looking at is the cost per response.”
When a VDP campaign coaxes additional information from responders, the next campaign can be even more individualized. “Think of this as a value-based information exchange,” says Hackett, “a paper or electronic version of the best practices of your top salesperson.”
VDP Innovations
In its few years as a mature technology, Variable Data Printing has accumulated a number of innovative ideas and success stories.
The Boston Symphony Orchestra used a VDP campaign to reactivate Boston Pops patrons and convert them to Internet-based customers. The campaign yielded an 18% response and a 20% increase in online ticket sales.
Auto Nation, the largest U.S. retailer of new and used vehicles, was sending out 16 simultaneous campaigns to customers alerting them of upcoming service dates. These were laser- and offset-printed on pre-printed shells; because of constant changes in the product line, there were 4 million unused shells left over after a 2 year period. They replaced this with a single VDP press run, eliminating the need for storage and increasing responses by 35% and revenue by 65%.
A Canadian travel company sends VDP self-mailers to customers with photos of destinations they have recently traveled to, and a personalized URL (PURL) which leads them to their own personalized website, where they can take a tour of destinations and book their next trip online.
For its fundraising campaign, a private school in Florida used a VDP letter to each child’s family that included a vision statement from that child’s teacher; when more than one child in the family attended the school, the letter included a quote from each child’s teacher. The campaign netted an 82% parent participation rate and reached 140% of its goal in the first three months.
Three times a year, the CRM manager for Pontiac/GMC sends customized magazines to individual owners with information specific to their model, the dealership from which it was purchased, the stage of ownership and their geographic location.
Reason Magazine used VDP to send its 40,000 subscribers an issue with their name and a satellite photo of their home on the cover.
(sources: David Hazeltine, Yellowfin Direct Marketing; Indivia; XMPie)
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