I sometimes find myself discussing mail as a communciation channel with friends, associates and colleagues. The reaction from most people is farly predictable: mail is “kind of un-hip.” With some prompting people might admit to the famous “mail moment” that the USPS describes when we are reaching into the mailbox in hopes of “getting something useful” or “fun.”

Of course, sending mail is “out of the question, except for birthday cards” and that kind of thing. It’s “laborious” “ponderous” and “out-dated.” (Sorry, I’ve been reading at Zagats a lot lately). Please bear with me.

Mail has a branding problem. Because it doesn’t have to be that way.

My ten-year old daughter Stephanie met a little girl in Florida while we were on vacation. This morning she was almost late for the school bus because she was sitting at the kitchen table writing her a letter (while I was online checking and answering email) and we both lost track of time. She “had to finish” her thought in writing even as I was shouting for her to “get her jacket on.” She has a pen pal and she was just dying to tell her all about her weekend in NYC (a Broadway show and a couple of nice restaurants). Not via phone or email but in a letter. To be mailed. That’s good stuff.

There is so much you can do with an old-fashioned paper letter. Ernest  Hemingway relaxed by writing letters to friends. The correspondence between John Adams and Thomas Jefferson (at least as described by HBO) was personal, deeply moving and of historical significance. Writing things down either in longhand or on a keyboard gives it meaning.

And it’s not just words, words, words. You can draw on the paper, as I did when I wrote letters from Belize to my girlfriend (now wife) in 1988 when I spent the summer there. In fact, our relationship is somewhat based on letter mail. When I went down there I was seeing a couple of other girls, too, but as I wrote letters, at first to each of them, then to two of them,  and finally only to Rorie, I realized that she was the one I “liked best.”

By summer’s end I was writing to her exclusively. And this was one-way communication. I was moving around so much all over the Yucatan peninsula I didn’t have an address for her to reply to. But I knew how she would react to my cartoons, my travels, my loneliness at being so far away (and in Belize being surrounded by Cubs fans during a pennant race with my Mets). We got engaged the next year.

Because mail is “intimate, personal”  and “highly targeted.” At least love letters are. But here’s the thing: if you are in business, love letters are exactly what you want to send to your customers (your best customers and even good customers).

Think about great advertising: it can be funny, profane, moving, even syrupy at times. You look at an ad from another era and it may look corny (You want to buy the world a Coke?). Messaging is very contextual. It’s “of its time” and “specific to a place or a culture” and is “fleeting” in its relevance and should aim at “looking the recipient in the eye” and “inspiring confidence.”  

Kevin Roberts, the CEO of Saatchi & Saatchi, said as much in his 2005 book "Lovemarks":

"Lovemarks transcend brands. They deliver beyond your expectations of great performance. Like great brands, they sit on top of high levels of respect -- but there the similarities end. Lovemarks reach your heart as well as your mind, creating an intimate, emotional connection that you just can't live without. Ever."

And this is from the guy who wrote, “Be all you Can Be” for the US Army and made a jingle out of the words “Army, Navy, Air Force, Marines.”

Seriously, though, lovemarks is an interesting concept. You want to gain intimacy and generate an emotional bond between your customers and your products and services. The best brands forge that kind of bond. When she was two years old, my daughter, like many kids, would see the “Golden Arches” and start “watering at the mouth” for “crisp, salty” french fries and a little plastic toy. She knew that Dunkin Donuts sign meant “delicious” chocolate syrup and “colorful sprinkles” on soft fried dough.

That’s branding. What does your brand “mean” to people? Are you “competent”? “Luxurious”?  “Innovative”?

Your brand message must be “consistent” and truthful. Brands build trust and that trust can’t be broken more than a couple of times before it isn’t a brand anymore (just ask the airlines). Your lovemark or brand must be “targeted correctly” (I filled up my Audi this morning “sixty bucks” and I’m still in a fetal position over it—did I mistakenly believe I am an Audi person)?

Mail can do this: it can be targeted, intimate, personal, effective and well-recieved.  It can help you build your brand (with Megaspirea dynamic envelopes you can “brand-on-demand” without keeping boxes of letterhead and pre-made branded envelopes) and mail can deliver love and respect to your best customers.

The episode with my daughter and her pen pal reminded me of an old Peanuts cartoon. Sally is writing to her pen pal and explains to Charlie Brown that they tell each other about life in their respective countries. Charlie Brown retorts, “You sound like a couple of spies to me.”

I’m going to begin an awareness campaign around mail use called the “Megaspy” program. Become a Megaspy and send letters to a pen pal. Use all the resources of the web and computers (insert pictures, for example) or write it by hand. Look for it soon and sign up. Because “mail is hip.”

Apr 15, 2008

Structuring the Business Around the Customer

A Story about Evangelists and Verticals

About five years ago I was invited to a high-level meeting to discuss the re-organization of our business division into new business units. Also attending were the company president and various VPs of sales, marketing, operations, GMs of various business units, etc. I was the only manager there; my role was to formulate an internal communication plan designed to roll out the new organization to employees.

After the new divisional VP of Sales outlined his plan for the sales organization, which was to include separate units for software and equipment sales, I quietly asked if he had considered re-organizing around “verticals.” He said that he had but rejected the idea. I politely persisted, asking if it didn’t make more sense for his sales people to gain expertise in a particular vertical market so as to better serve their clients. The VP repeated that he had rejected the idea. One of his colleagues stepped in by suggesting that, in his experience, verticals were the way to go. As far as I know, he was never invited back to any of their high-level meetings either.

I recently spoke to a former colleague who is still with the company to see if she was going to be at the On Demand Exposition or Mailcom. She replied that she was not because they had recently re-organized sales and marketing around vertical markets and that she would only be attending shows in her particular market.

True genius is rarely appreciated in its time.

In my last column I mentioned a contradiction in American business regarding the customer. In the first few years of this decade there were numerous pronouncements about customer-centricity and putting the customer first even as businesses were outsourcing and off-shoring customer call centers to save money. Replacing experienced customer service representatives with staffers in another part of the world where the major qualification for hiring is the mastery of an American regional accent must seem, at least in retrospect, to negate that rhetoric. I’m glad to report that many CSRs are now coming home.  

Business organizations that are structured around divisions, business units, countries, and regions are not as effective as organizations that understand that customer relationships are a strategic priority and act accordingly. Customer segments—such as verticals or other categories—are what the customer-centric company structures around. Management discussions are focused on customers, not product lines or shareholder value, which should follow customer value in the mission statement. If a stock is under-valued or is otherwise under-performing, the answer may not be in re-branding or in re-structuring the business units—except to the extent that the organization re-structures around the customer, commits to valuing each customer relationship, and delivers value to that customer.

Your most profitable customer is a loyal customer; organizations that value their customers will be valued in turn by investors, who understand the value of customer relationships. In the print and mail business, for example, customers tend to align themselves with a particular vendor by saying that they are an X shop or a Y shop. It is in their interest to establish fewer, deeper relationships with suppliers as long as the supplier values their business and seeks to deepen the relationship. The best sales stories I heard in my half-dozen years writing and editing case studies were when the sales person took the suit off, put the gloves on, and worked side-by-side with the customer to understand them better.

I had a conversation yesterday with a gentleman who was exploring the concept of Transpromo. He said that all he wanted from his phone bill was usage reports and that, given the limits of their working relationship, a phone company could offer him no more good service at a reasonably low price, and wondered why he would ever look at a phone bill for advertisements and promotional offers.

Fair question, to which I replied that if the phone company wanted to strengthen their relationship with him they could provide him with service announcements—a plan that better suits his usage profile, perhaps, or an incentive to upgrade his telephone. In fact, the possibilities are virtually endless. The fact remains that his relationship with his telephone service provider could be better and it is up to them to make it so. He may not be receptive at first but if they are persistent, honest and understand his needs they will eventually overcome his doubt.

Likewise, when you are in the business of providing software or equipment to telecoms, it makes sense to understand their communication needs and meet them as best you can. Having personnel that can become a trusted advisor or an evangelist, as my friend PC McGrew has become for Kodak, is a very worthwhile investment for organizations seeking to strengthen relationships. Emphasizing her knowledge of the customer's business situation—and their vertical market—instead of just her own product line, makes it possible for her to deepen existing customer relationships. In fact, her in-depth knowledge of the customer has led her on several occasions to contact me in order to integrate our product lines in a way that will deliver value to her customer. An evangelist needs to have the ability to coordinate multiple business units from both inside and outside the company in order to deliver customer value.

Just as vendors want to reach decision-makers within their client organizations, clients want to gain access to expertise that applies to them without having to navigate corporate bureaucracies, which means that quality customer service, or products--as opposed to price-- is your key differentiator.

Apr 8, 2008

When Waters Get Rough, Marketing can be a Lifeboat

A woman I talked to at Xplor Document University, whose company I would describe as a hot prospect for the Mailliner, told me that she had grave doubts about adding something new during a recession. She said that her business, which serves the financial services market, is all about cutting costs and helping clients survive and not about “soft” benefits, such as marketing.

I explained all about the cost reduction aspects of Dynamic Envelope Creation and sent her a copy of the Madison Advisors report on the true costs of traditional inserting. There is a compelling business case to be made for Dynamic Envelope Creation without getting into the marketing aspect of it. But it did get me to thinking: the last few conferences I’ve attended in the print/mail industry have largely been about Transpromo, yet businesses still consider marketing a luxury item, something to be added in the good times, not now.

Big business is fraught with contradictions. A few years back, American companies were embracing ideas about “enhancing the customer experience” and adopting CRM technology and talking about “one-to-one marketing” saying the “customer is king” while simultaneously off-shoring customer service to places like India and the Philippines. It made no sense then and it makes no sense now. There is nothing like a good customer service call to reassure a customer that the company is competent, conscientious and capable. On the other hand, according to a survey conducted by Purdue University a number of years ago, some 63% of customers said that they would cease doing business with a company after a single bad customer service call. I’m with them.

Likewise, it may be that just when Transpromo (or whatever you want to call it) is becoming accessible to the average company due to improvements in technology and color print coming down to a reasonable price point and other factors, we may see its progress stalled because the economy is in bad shape. And, as with the example above, this would be both a contradiction and a shame, because the benefits of steady helm marketing are far from soft and actually mean more to a brand and the bottom line of a company in a down economy than they do when times are good.

I’ve discussed blue oceans in this space before so I’ll spare you the explanation. But an economic recession can be a “blue ocean” opportunity. It’s an opportunity to separate oneself from the pack, to rise above the din and send your message with a clear voice in a way that gets heard and understood.

As one technology develops others become obsolete. Things can change so fast in business that it is easy to ignore this simple fact. When times are good there is little impetus for change. After all, no one likes change. Success masks a lot of disconnects, inefficiencies and outdated processes. But, when times are tough opportunities abound.

Recessions, for example, provide rich opportunities to fine tune or even completely overhaul faulty processes while providing ample proving grounds for new technologies. One can no longer ignore inefficiencies once business conditions go south. Systemic problems and organizational challenges must be met in order to survive.

Marketing is an easy cut for many businesses. It is easier to spend less money on trade advertisements and collateral than it is to cut other expenses. Marketers are among the first to become unwanted overhead, especially when the relationship between marketing and the overall bottom line is relatively unclear.

However, while cutting marketing dollars is an easy call for many business leaders to make, it does a disservice to the company by failing to promote key messages and by not positioning the company for success. Short term, near term, long term: marketing matters.

Cutting out marketing directly affects both consistency and differentiation, two of the most important components of a successful brand. Successful brands turn opportunities into increased sales and profitability.

Companies that spend huge amounts on marketing during the good times and very little on marketing during bad times compromise their chances for long-term success. Companies that spend steadily over the years, even if the overall expenditure is lower, reap the benefits of consistent and successful lead generation, lead qualification and closed sales. Consistency contributed to a strong, stable, credible brand and provides clear differentiation during down economic conditions, when each dollar spent has a larger impact on the target audience.

The transactional document is a corporate asset. It is paid for, accounted for, and often serves multiple purposes: revenue generation, regulatory compliance, customer contact. Adding promotional messages—especially to the outside of the envelope—means that you show up while other companies cut their advertising budgets. And as Woody Allen once said, 90% of life is just showing up.

If you are thinking about adding Transpromo messaging to your customer relationship strategy, continue to do so even as the economy recedes over the next few quarters. Add the technology, re-design the documents, consider the envelope…you’ll be in a better position to clean up when things look rosy again. That’s blue ocean thinking.

Mar 25, 2008

More Talk about Blue Water and Grapefruit

Why Friend-to-Friend Mail Can Be a Reality IMO

One of the great things about going to industry events like On Demand and XPLOR is that you get to see people you haven’t seen in a long time—many of them people with whom you used to work. It’s a small industry. There are always old faces in new places.

After I presented on new technology—a speech mainly about grapefruit and blue water (see previous columns for an explanation)—I took a walk on the show floor and ran into an old colleague. I was pleased to learn that he regularly reads this column and was doubly pleased that he agreed with most of what I have written about in this space. But then he kind of chuckled and said that my idea about reviving mail as a “peer to peer” or “friend to friend” channel was abjectly (he used another word) ridiculous. He has a son in college and said there’s no way the kid would ever send a letter. The most typical communication between them—requests for more money—were all made via cellular telephone or email.

I’ve always been one to appreciate cheerful skepticism, polite doubt, even wanton cynicism, so appreciate the feedback. I’m getting used to it. In one of the panel sessions I participated in for XPLOR I brought the idea up and claimed that it would save the USPS: it passed by without a single comment by attendees or panelists. Later on, another ex-colleague politely told me that it’s too far-fetched to contemplate: mail is dead. But I remain optimistic.

The reason is technology. I predict that the same technology that “killed” mail will revive it: the Internet. The Internet will enable us to automate the mail and offer mail as a service. If we automate this currently manual process and eliminate the folding, stuffing, addressing and stamping, then what is left—personal content—is all good. And millions of people will respond to it when it happens. The USPS will see a rise in first-class mail and our mailboxes will be full of letters from people we know because it’s fun to get mail. And you have to send mail to get mail.

But let’s not get ahead of ourselves. The first step is to automate. Using the Internet to automate the mail creation process will first benefit small businesses that need to leverage postal mail as their main customer communication channel.  Consider this quote from Andy Coleman,Director of Strategic Accounts, eBay:

“In the early days, our sellers would get an email from eBay, hand write the address on the package, get in their car and drive down to the post office, and that was their mailstream. The technology we’ve put together with Pitney Bowes has enabled us to provide automated tools allowing sellers to become more efficient with that process and so increasing their business, which in turn increases our business and helps us grow.”

The increasingly fragmented business world we now live in has led to growth in the small business sector: the growth rate of additional small businesses is about 5% per year. One of the first things small business owners experience is sticker shock over the cost of postage for the direct mail that drives new business and for transactional mail, which is still considered more reliable than sending an invoice or bill as an email attachment.

In the UK, Sureprint, LLC provides mail as a service for many small businesses. They formed strategic partnerships with the providers of small business accounting and accounts payable software and service: Sage, Pegasus, JD Edwards and Oracle. Rather than printing communications and inserting them into envelopes, billers hit the enter button on their desktop computers and their mail is printed and processed in a centralized location, co-mingled with other pieces in order to gain postage discounts, and mailed for them. The service costs less than what they would spend doing it for themselves.  There is no reason to believe that “Mail as a Service” (MaaS) will also work here in the USA. 

I believe that the same technology provided by Sureprint can be applied in a way that will attract people—especially young people—who may already be in search of a more tangible way to express themselves than texting or talk.

Here’s a truth about technology: it tends to find a niche. Radio was supposed to be dead after TV came along but it found a role and continues to thrive. Email replaced some kinds of mail—for example, email alerts carrying a link to a billing site have replaced some statements and email attachments replaced the overnight mail that used to carry important contracts from businesses to clients. But like other media, first class mail will find a niche.  One could say it already has: greeting cards for special occasions. But why is it still used for sending greeting cards? What is it about mail that makes email greeting cards still mostly unacceptable for this application? It may be that mail has a formality to it that other forms of communication do not. If you don’t believe me simply send your mother an e-greeting on Mother’s Day and see if she appreciates it.

Formality may also be the reason that most bills and statements are still sent through the mail. It may be bad form to informally ask someone to send you money. There is also a trust factor. The bottom line is that consumers prefer getting bills in the mail. As a case study I recall an effort a few years back by a mortgage company that wanted to lower its postal mail costs. They offered a number of raffle tickets for a fancy sports car to anyone who added online statement presentment. The campaign was a huge success. As a follow-up, they offered even more tickets to anyone who turned off the paper. This campaign was a dismal failure. The consensus among consumers was “I like the car but I need my house.” Paper is trustworthy, tangible and familiar. We’ve learned that presentment and payment are two very different activities, each with a preferred channel. And we’ve learned that there are rules or, at the very least, customs, that are tough to change.  

Perhaps not coincidentally, mail has more than held its own as a direct marketing channel: people who receive direct mail buy one-and-a-half times more merchandise on retailers’ web sites than those who were contacted only by electronic channels; and, with all the recent chatter about transpromo replacing direct mail, it must be acknowledged that transpromo mail will not  help businesses add a single new customer. Transpromo can be a great cross-seller, a great up-seller, a great way to strengthen the consumers’ relationship with your brand, a great brand-builder….but transpromo does not help you acquire new customers. So direct mail will likely persist.

The catalogue of the near future is very far from the classic JC Penney/Sears catalogue model: it will be much more targeted and personal, with catalogues of four to six pages becoming more prevalent than those with dozens or hundreds of pages. Personalization and predictive modeling will put an end to spray and pray  tactics that greatly bother us when we go to the mailbox.

And where personal messaging has changed, it has changed continuously with new channels forcing older forms into a niche: ie., while first faxes and then email replaced some letter mail, they have in turn been replaced by instant messaging and texting. For younger people, email is just as passé as mail:  texting, with it’s unique diminutive language, is much more fun and vital and immediate than email. But LMTYS: texting is fun because inventing a new language is fun: all the abbreviations are fun to use and learn and teach others. Millenials like to influence one another—they like being hip to new things and passing them on. My kids use expressions like “sketchy” and “awkward” to describe things that we used to say were unfortunate or bad.

But something is missing. If texting is an “in” thing, where the hipper you are the more you get the foreshortened lingo, it’s also true that the level of creativity is not very satisfying. And if reductive langauge is en vogue now, IYKWIM, the next big thing might just be more expansive: ie., using the letter page and (even more so) the envelope page and (even more so) the stamp itself as a broad canvas for creativity. The only limits are the limits of ones imagination and the templates that they must be squeezed into in order to be machine-sortable and deliverable. The most difficult part won’t be generating the letter, which is done on MS Word, or obtaining payment through PayPal or similar channels. These are already the engrained habits of the millenial generation.  The difficult part will be associating a physical street address for a generation that is more used to working with an email address. But that can be overcome.

I see nothing to hold back this initiative.

The revitalization of friend-to-friend mail depends on applying the technology, partnering with social websites, co-marketing the service to young people and allowing them to use the imagination to create unique pieces that will impress their friends and stimulate a response in kind: after all, everyone loves to get mail. And like my mother always told me: you have to send it to get it. YKWIM?

Mar 11, 2008

Message From XPLOR: Simplify Production

Plain white processing plus Dynamic Envelope Creation add up to Big value

Last week the XPLOR Document University, which was held last week at the AIIM/ON Demand Exposition and Conference in Boston presented print/mailers with a good opportunity to catch up on the latest topics.

Predictably, the key word was “transpromo,” with a surprising number of attendees apparently hearing the term for the first time. A brisk walk on the show floor also revealed the vendor communities embrace of transpromo as a concept, selling point or industry re-invigorator. At several panels that I took part in or had the opportunity to attend, transpromo was variously touted as the next new thing or decried as an old thing with a new label.

For my part, I chaired a course called “Mail in the Middle” which is about how using the print/mail data center as the hub of activity for integrated customer communication makes business sense. Not many people saw my introductory presentation because I was scheduled opposite a keynote address by Patrick Buchanan. But I quoted the very fine Gartner CRM analyst Scott Nelson, who suggested that the integration should take place in a location that could influence the entire ecosystem. What better place is there than the one that drives the major channel of customer experience, the mail?

I thought that Mark Fallon did a tremendous job of showing how mapping the workflow can increase productivity and that Avi Greenfield and Roger Gimbel delivered great value in their presentations on using variable data in communications. Andy Perceval, the General Manager of Sureprint LLC, flew in from London to present on how the hybrid mail model can be a boon to data center managers. I think that Andy is on to something and that the future of mail depends on this kind of thinking. Last but not least, Pat McGrew, the transpromo evangelist from Kodak, and Karl Schumacher from Megaspirea, informed attendees about “Second Generation” transpromo which will utilize personalization enabled by dynamic enveloping and “onserting” instead of inserting.       

Karl Schumacher gave a very content rich presentation as part of another course, Operations: Improve Productivity and Reduce Costs, chaired by Terry Johnson.The presentation, Trends in Mail Finishing, proceeded from the theory that simplifying the mail—whether direct mail or transactional mail—is becoming a necessity these days because all the various shapes and sizes of mailpieces are driving the industry into the ground. Karl advanced a notion that he trademarked, called LCD Mail™ or Lowest Common Denominator Mail.

LCDMail reminds me of the constraints placed on marketers by a very successful mail operations executive with whom I served on a panel at a Mailcom a few years back. He had developed a world-class Automated Document Factory and did so by following three rules: a mail piece could be any color as long as it was white, black or an infinite shades of gray; it could be any size or shape as long as it fit into a number ten envelope; and, c) it could contain any content as long as said content was relevent to the recipient.

Based on what I have come to believe I wrote a piece a while back called “Advice to Mailers: Don’t Forget Your Mantra Simplify the Process, Reduce Complexity, Make Content the Only Variable” that can be found in the Outputlinks archives.

Karl Schumacher’s XPLOR presentation was built upon the same premise. Karl was more concrete: he had numbers and he explained them. And, since I believe that Schumacher’s presentation offered more value than many others that I attended, I’m going to reproduce the argument here for the benefit of my readers.

Madison Advisors was tasked by Megaspirea with examining the hidden costs of traditional inserting. They created a TCO analysis that examined the associated costs of using pre-manufactured envelopes and inserts. The study can be obtained by sending me an email at scottg@megaspirea.com.

The Madison Advisors study did not look at the purchase cost of materials and production but instead produced data that most operations most likely had not considered. The costs they looked at can be divided into four categories: Acquisition (Design and Procurement), Holding (Receiving and Storage), Usage (Staging and Handling) and Obsolescence. The study did not differentiate between envelopes and inserts, but certain sensible adjustments were made to normalize the results.

The Madison Advisors study indicated:

The per envelope cost is calculated at about $.0083. The largest expense - $.0068 - is the Usage Handling (insertion) and represents the actual labor in deploying items on traditional inserting systems.

“The aggregate hidden costs of printing, managing, storing and staging of traditional paper inserts and envelopes are significant,” said Kemal Carr, President of Madison Advisors, in a press release about the report. “The industry spends nearly a billion dollars a year on this process, a cost that could be eliminated by the Mailliner 100. Add in the additional production cost savings and the potential savings are huge.”

Karl Schumacher decided to do a little further research and provided a proof of concept for a potential client. I’m not at liberty to reproduce the name of the prospect or many of the other specifics, but the numbers nicely parallel those found in the report by Madison Advisors. In this case, however, Karl went a little deeper and added the cost of the envelope—a security envelope with a window shielded by a glassine plastic strip. 

A working estimate for the envelope, printed with one-color return address/logo, is $.018 per envelope bought in a quantity of 10,000,000 per year.

Karl further calculated the production per piece of an in-line printed envelope created dynamically on a system like the Mailliner 100:

- Envelope Paper (in roll)                        $.004

- Printer Click (including toner)                $.004

- Envelope Glue                                      $.0014

- Paper Trim Waste                                $.001

                                                            Total:    $.0104

Therefore, the envelope production cost savings is about $.0086.  Schumacher then went on to calculate the production costs involved in creating inserts, as opposed to creating an inline “onsert” directly on the statement. Plain white processing combined with dynamic enveloping eliminates envelope and insert processing. Therefore, the processing savings would beabout  $.0166 per mailpiece in terms of “material logistics and handling” if it contained both envelope and insert.

The ROI on using dynamic enveloping as opposed to traditional inserting is compelling: for this particular mailer transforming two monthly applications, the cost saving was over $400K.

The conclusion is that migrating a mail operation to a plain white roll, black on white print, duplex and 2-up therefore eliminating inserts and pre-made envelopes, is that productivity gain far outweighs any other consideration. The fact that openability (and therefore customer response) metrics can be expected to grow using this method is a bonus. The business case for LCDMail or plain white mail or whatever you prefer to call it is easily made without bringing transpromo into the argument. Whatever the merits of transpromo, they are an additional benefit for those that have already improved their processes.

Feb 26, 2008

Total Cost/Total Value: How do you Choose Technology?

Last summer my 1999 Honda Passport was finally showing some signs of old age—the dashboard went completely dark and stopped giving me those vital metrics, the headlights stopped working, there were some awful noises coming from the hood and it began to smell like burned oil--and so I found myself looking for a new car. The process of choosing a car is of minor interest here because where some similarities between that and a topic I am to discuss at XPLOR Document University at On Demand in a couple of weeks: “How do you Choose New Technology.”

Before a new technology is introduced into the environment, one must first assess the organization’s overall business objectives. These might include the need to boost productivity, quality, and profits, and almost certainly include the need to reduce costs. For me, it was: a) just getting to work and b) getting to work without people staring at my car. Having to get home before dark was also becoming problematic after the summer solstice. I was also getting tired of pouring money into the car, which was looking more and more like a bad bet.

Next, managers must identify steps or changes required to attain those objectives. The implications can be as simple as business process enhancements or as complicated as a total business transformation. It may even call for the formulation of an entirely new business model. For me, the move from a junker and a clunker to a smooth new ride was surely a life-changing event. The main question was how far was I willing to go? 

Before a decision is made to purchase capital equipment—to adopt a new type of mail finishing system, for example—overall business objectives must be assessed, which includes not only the print operation and data center but also the marketing department, strategy, finance, IT, real estate and operations and various other departments, lines of business and perhaps dozens of other stakeholders.

No sound business decision is ever made in a vacuum.

For me, consideration #1 was four wheel drive.  I need that because I live about three-fourths of the way up a mountain in the deep woods of semi-rural Connecticut and my driveway is a real tough climb in the winter. Some days I can’t drive up the driveway wat all ithout four wheels turning all at once. This consideration eliminated many, many kinds of otherwise eligible vehicles, including most hybrids, which I was hot on for awhile.

Does your organization have a “must-have” when it comes to new technology? Does it need to fit into your current environment? Does it need to be purchased, not leased? Does it need to be “state-of-the-art”?  There are many possibilities for “must-haves” and you need to understand the main criteria of your organization before making a decision.

I also wanted a ragtop, mainly because I never had one before but drove a rental once on vacation and I liked being out there in the open with the wind blowing back what is left of my hair. Not a must-have, but a nagging desire. That, too, eliminated some contenders. In fact, at this point in the process there were only a few possibilities left.      

I ended up buying an Audi A4 Quattro Cabriolet. It’s red, which I’m a little ambivalent about, not least because I feel like a target (I had never heard that red cars are more liable to get speeding tickets but I’ve since heard it’s a myth, knock wood).  It’s an adorable car and I enjoy driving it, especially when the weather is warm and dry and I can put the roof down. More important, though, it has all-wheel drive (indicated by the quattro, get it?) and it’s been great this winter after several storms.

One of the ways that you can look at a purchase is by assessing total cost of ownership (TCO). A TCO assessment is inclusive not only of the cost of purchase itself but also the use and maintenance of the equipment, which includes the costs of training support, consumables, floor space, electricity, development, testing infrastructure, quality assurance, costs of disaster recovery, incremental growth and more. Once these are calculated, the cost of the equipment or technology itself may pale by comparison.

Collateral costs tend to add up quickly-- as I discovered this summer when pulled my new car up to the gas pump. I opened the gas cap and was faced with a little sign that said Use Premium Gas Only (91 plus) because lower quality gasoline can leave deposits on critical engine parts, which reduces engine performance. I’ve never used anything but Regular Unleaded in my life.  I also found out that wiper blades cost sixty dollars apiece, which was not the case with my Honda Passport.

To better understand the concept of TCO, consider this simple (borrowed—I didn’t make this up) analogy of the purchase of a grapefruit from your local supermarket: ie., to purchase a grapefruit your cost is not only the price of grapefruit itself but also the cost of the energy and effort it requires for you to find out which of the many kinds of fruit you would prefer to buy; where you want to get it and at what price; the cost of travelling from your house to the store and back; the time spent in the store, the waiting on the check out line and the overall effort made to pay for the grapefruit. It should even include the cost of storage space in your refrigerator to keep the grapefruit fresh. That’s TCO: total cost of ownership. 

When purchasing a printer, what are the toner costs? When purchasing an inserter, what is the cost of damaged or unusable envelopes? Last summer I asked the print/mail advisory firm Madison Advisors to create a TCO assessment of traditional inserting operations. They looked at four standard envelope handling functions to see how these cost components influence the total cost of utilizing pre-printed envelopes. The four functions are acquisition, holding, usage and obsolescence. How much is spent on printing envelopes? How much does storage space cost for storing pre-printed envelopes?  How much does it cost to forklift dozens of boxes of material to the shop floor? How much does it cost to destroy those boxes and/or to eliminate the excess inventory?

There is another way to evaluate a purchase—by looking at its value. So let’s look at the same grapefruit purchase we made above in another way. Not only does a grapefruit taste pretty good but it also offers a good dose of Vitamin C and other nutrients. Vitamin C not only boosts the uimmune system, it also prevents the free radical damage that is associated with asthma, osteoarthritis, and rheumatoid arthritis. There is also a reduced risk of death from all causes including heart disease, stroke and cancer.

The rich pink and red colors of some grapefruits are due to lycopene, which appears to have anti-tumor activity. Among the common dietary carotenoids, lycopene has the highest capacity to help fight oxygen free radicals, which are compounds that can damage cells.

Phytonutrients in grapefruit called limonoids have been shown to help fight cancers of the mouth, skin, lung, breast, stomach and colon. Grapefruit also contains pectin, a form of soluble fiber that has been shown in animal studies to slow down the progression of atherosclerosis. In one study, animals fed a high-cholesterol diet plus grapefruit pectin had 24% narrowing of their arteries, while animals fed the high-cholesterol diet without grapefruit pectin had 45% narrowing. Naringenin, a flavonoid concentrated in grapefruit, helps repair damaged DNA in human prostate cancer cells, according to a lab study published in the Journal of Nutritional Biochemistry. Grapefruit provides a good source of fiber, prevents kidney stones…

I could go on.

In other words, one gets a lot of value from a grapefruit. This kind of framework for assessing the value of a given project is called total value of ownership (TVO). Employing this model will help you assess whether technology investments are well-aligned with business objectives, people, processes and teams.

Total value of ownership comes not from the technology alone, but from the fundamental changes it helps achieve for the business--changes that are enabled and perhaps even driven by the adoption of that technology.

Personally, I like it when strangers tell me they like my car. That makes me feel good. My kids love pulling up to a friends house or their school in our little red sports car with the roof down. Their happiness is a plus. My daughter and I even experienced an owl flying about ten feet over our head for several yards last summer, a sight we’d never have seen with the roof up: that was a wonderful experience.  

Likewise, when an organization identifies a number of potential projects and compares them against other projects from the perspective of the entire organization, business units, and individual employees, the company has the opportunity to select the options that best meet its overall priorities and deliver the most value to the enterprise. Value goes beyond cost reduction to include revenue enhancement, improved product quality, higher levels of service, and overall customer satisfaction. Ideally, these evaluations should take into account all potential stakeholders, including individual employees, departments and business units, and customers. And if you work hard and plan correctly, you’re more likely to leave your competitors behind.

Communication associated with business transactions is becoming increasingly important as a vehicle for engaging the customer. Digital print technology continues to provide more flexible and personalized customer communications, improving customer loyalty through the use of more timely and relevant content. As variable data and the use of color grow in importance, organizations are increasingly looking at their document creation process as something more than just a necessary evil. It’s becoming a strategic asset worth making investments in to bolster future growth.

It’s difficult at best to determine the amount an organization spends on their document production process. For every dollar spent on capital equipment, another twenty dollars may be spent on supplies, service, procurement, IT support and infrastructure, facility costs and man-hours associated maintaining, preparing and operating the equipment. These costs get fragmented in other budgets and typically go unaccounted for by management.

So when Madison Advisors created their assessment of traditional inserting operations, they found that their analysis was complicated by the complexities and variations of the print/mail process, and further complicated by the lack the desire, discipline, or systems to reliably and accurately track and capture these costs on the part of most internal operations. Luckily, the external service provider market has more dependable cost metrics for these functions that can be used to create models utilizing the data.

According to their research, Madison Advisors says that the ability to eliminate pre-made envelopes by using Dynamic Envelope Creation can save just about a penny per mailpiece. If one were to extrapolate across the entire industry, eliminating pre-made envelopes would save close to half a billion dollars. Now that’s value.

Kind of like zipping around in a red sports car with the top down.

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PRESS RELEASE: MEGASPIREA Featured Prominently in Power of Personalization Report

Norwalk, CT--(March 10, 2008)--One of the most important channels for personalized communication is postal mail and the highest level of personalization an organization can achieve--personalized envelopes--is enabled by Megaspirea, according to a new report by the CMO Council entitled, "The Power of Personalization."  

Scott Gerschwer, VP Marketing, Megaspirea, was one of fourteen marketing executives participating in the study, which proves that personalization is a highly sought after element of business-to-customer communication. Gerschwer states in the report that business owners can expect a great uplift in response rates after personalizing the envelopes carrying key customer communications, including direct mail marketing and transactional mail.

"Megaspirea is on the cutting edge of the personalization movement and provides a valuable tool for marketers eager to use the white space on envelopes to benefit the organization," said Gerschwer.

Qualified stakeholders can obtain the report by emailing info@megaspirea.com

What is New in Print/Mail Technology?
Mail is the Middleware Connecting Your Business to Your Customers

By Scott Gerschwer, VP Global Marketing

I’ve been giving a great deal of thought lately to what is new in print/mail technology. There are two reasons for this: a) I am preparing a presentation for the XPLOR Document University (XDU) at AIIM/On Demand, called “What’s New in Print/Mail Technology,” and,  b) I’m preparing a presentation to be given at Mailcom in May called “What’s New in Print/Mail Technology.” 

I also made a New Year’s resolution to revive person to person mail, especially for members of the younger generation, and I know that new technology is going to play a major role in making this happen. (You can read more about that on my blog at www.outputlinks.com)

The course I’m chairing at XDU is called “Mail in the Middle” and it’s about finding a new role for mail in the enterprise. Mail should no longer be thought of as an isolated business asset; it should be considered the middleware that connects numerous internal and externally-facing processes.

There is a great deal at stake here. Billions of dollars are spent each year across hundreds of channels in an effort to gain the mind share of millions of consumers—and the channel that continues to be among the most effective is mail. Yet corporate executives gripe about the associated costs, in many cases outsource their most valuable channel, and in general don’t see the value that they can glean from postal mail, which is hiding in plain sight right before their very eyes.

At a mail conference that I spoke at last year, with yet another postage hike on the way, the nervousness was palpable in the room when the managers and directors of mail services operations discussed the threat they faced from executives that wanted to outsource their bailywick because it wasn’t core to the business and could be handled at less expense by mail service bureaus..   

Not core? Not core? Allow me to digress.

A few years ago I organized an interview between a reporter from a major periodical and the CEO of the company I then worked for. The subject was Sarbanes-Oxley, which went into effect that year. I did all the required research and spoke with numerous resources around the company to get a full picture of our story. I briefed the CEO with talking points, none of which he actually needed, and joined him in his conference room to take the call. Within moments it was clear that the reporter had an agenda: that SarbOx was a painful mandate from the bureaucrats in DC and that executives should rage, rage against the dying of the light.

To his credit, the CEO would have none of it. SarbOx was an opportunity to shine a light on business processes and methodologies that were long overdue in their need for reform. It was a chance to improve business practices, perfect the art of accounting, strengthen relationships with stakeholders and was both necessary and welcome.

Not many other executives took that viewpoint, at least not according to the final article, but how wonderful was that opinion? And I’ll tell you that it wasn’t just a case of making lemonade out of lemons, it was the mindset of a great leader: every obstacle is a potential opportunity.

And as I think back on it, every few years you get these events that make you  shine that light.

Remember Y2K and what it did for IT? But, friends, that light can shine at any time and the time to raise the visibility of the many processes, many of them still accomplished with legacy systems, that go into making the company mail, is long overdue. The billing document is your blood. The mail is the channel that gets the revenue. The way you communicate your story to stakeholders on a monthly or quarterly basis says more about you than your Annual Report. The way you communicate with your customers is what gives your brand a face and a voice and a personality.

Here ends the digression. Because my point is this: MAIL IS CORE. If communicating with your customers is something you know that you should do--and do well--MAIL IS CORE.

Call it Gerschwer's Law: Organizations that deliver timely, relevant mail communications will differentiate themselves and outperform their competitors. Shine a light on this particular process and you will likely see that it needs to improve. That is where Megaspirea comes in.  

You have to first understand that you have only six seconds to make your pitch. You better make every image, every word and every second count. Undifferentiated, generic messages from your company are ignored and rejected while colorful, relevant, personalized mail gets opened and responded to.

I was at a direct mail service provider just recently—a very innovative comapny—and I saw the future of catalogues. Their philosophy was to do away with the volumes of waste and undifferentiated junk and to focus their efforts based on the best knowledge they had of what the consumer wanted. No more of the old five-inches-thick catalogue with everything in it under the sun. The catalogue of the future has five pages of items you are interested in based on what you already have and what you are looking at online when you browse websites for products. It’s part of a multi-channel approach and much more interactive than traditional catalogues ever were.

Mail that is tailored to the consumer --who they are, what their needs are and that speaks directly to their specific interests and preferences--is far more likely to get their attention in the six seconds they’ll give you and perhaps buy you enough time to generate a response.

Not  surprisingly, two-thirds of marketers (67%) say that database analytics that support online marketing efforts are their most pressing need, according to the fifth annual marketing survey done by Alterian, an enterprise marketing company. The survey polled 852 marketers online and in-person in North America and the U.K. in October and November about their priorities for spending and resource allocation in 2008.  Sixty-three percent said that increasing marketing effectiveness was the primary objective behind implementing such processes.

But, people, haven’t we been here before? Does anyone remember CRM? Most CRM tools were databases mixed with analytics and segmentation algorithms. But CRM had the dubious distinction of being the first post-Y2K IT projects to utterly fail to deliver value. But the problem wasn’t with the investment in the tools. It was that there were no processes in place to take advantage of them.

Scott Nelson, the very bright CRM guru from Gartner research, once told an audience that only 15% of companies that implemented CRM had tied it to their paper mail processes. Five or six years later, 67% of marketers appear ready to make the same mistake. Smart companies will use database analytics to target more, mail less and get more responses, gaining profit while eliminating junk mail and making consumers more receptive to marketing messages by mail.   

What’s new in print/mail technology? Tools that give businesses the ability to create relevent mailed collateral, improve one-to-one communciations with their customers, and improve the content and the timing of every mail piece. 

It’s already happening. I was in Las Vegas last week for the PODi Application Forum and I’m pleased to say that, based on what I saw on the exhibit floor, Megaspirea has the one of the most innovative new technology offerings in the industry. It usually takes people a few minutes to recognize that we are not a print technology but once they do you can really see the wheels turning.

This is what drew me to Megaspirea in the first place—the incredible buzz that the Mailliner 100 drew at IPEX 2006. I went to Manchester a consultant and came home an employee. As our technology develops and finds innovators to team it with the necessary tools—software and digital print—we will deliver material value in this industry.   

###  

There will be numerous opportunities to see Megaspirea executives at the upcoming Spring conferences, as the major events feature presentations by the team.  

Clare Woodman, President and COO of Megaspirea, Inc. will discuss "Finishing Developments in Mailing Applications," at the On Demand Conference and Exposition, March 3-6 at the Boston Convention Center. Ms. Woodman's panel discussion takes place on Thursday, March 6 at 10:10 a.m.

"Clearly, Dynamic Envelope Creation has captured the interest of the mailing industry and when combined with other developments can deliver a great deal of value for all stakeholders, including not least, the recipient, who can gain by not having to deal with unwanted messages," said Ms. Woodman.

Scott Gerschwer, VP of Marketing, will present at both XPLOR's XDU at On Demand (see below) and at Mailcom, where he'll discuss "New Trends in Mail Finishing" along with Kemal Carr, president of Madison Advisors. The course, PM417, is on Friday, May 2 at 9:15 am.

Karl Schumacher will present twice during XPLOR, delivering a class that is part of a two-day course entitled, "Operations: Improve Productivity and Reduce Costs." The course begins on Monday, May 3 and Tuesday, May 4. He is also presenting, with PC McGrew, as part of the "Mail in the Middle" course chaired by Scott Gerschwer (details in the press release below).

"As an organization, Megaspirea has great experience and great credibility within the industry," said Mr. Gerschwer. "We're sought after for the depth and breadth of our knowledge."

The Insert as the Nexus for Direct and Transaction Mailers

By Clare Woodman, COO, Megaspirea

Although they are converging, direct mail and transaction mail operations are still two very different worlds. As these worlds collide, those in charge are not always prepared to make their new initiatives successful. Go to story >>>

Scott Gerschwer of Megaspirea will chair a course on Mail Communication at the 2008 Xplor Document University Global Conference and Exhibition, which is being co-located with ON DEMAND, March 3-6, 2008. Go to press release >>>

Why is this Man Smiling? 

A new report by Madison Advisors says that Megaspirea can reduce his per mail piece by eliminating the need for pre-manufactured envelopes.   

 Read the Press Release
 http://www.megaspirea.com/page.asp?PageID=6629

The Shape of Things to Come...

Print Industry guru Frank Romano was an early believer in Megaspirea, first writing about Dynamic Envelope Creation in August, 2005. His latest column on whattheythink.com can be accessed at the link below.

http://members.whattheythink.com/evt/07/ge07/ge07romano3.cfm

Megaspirea a MUST SEE at Graph Expo

Megaspirea was a big hit at Graph Expo, one of only 32 out of some 750 companies exhibiting to gain MUST SEE status (and the only one in mailing equipment on the list).

It's fair to say that we announced our presence as a highlight of the show. 

We've got great momentum now and our post-show strategy is to invite interested parties to come see us at our manufacturing facility. Of course,if you can't come to see us we're always interested in seeing customer environments so we'll be happy to visit you at your convenience. 

    ( Make a Site Visit appointment online)

Bills & Thrills

Oct 1, 2007 12:00 PM, By Patrick Henry & AP staff

Transaction documents include commercial invoices, credit card bills, 401(k) summaries, loan payment notices and checking account statements. When envelopes bearing transaction documents arrive in the mail, the urgency of what's inside them all but guarantees opening, perusal and response.

Promotional documents containing sales and advertising messages arrive in the mail, too, but to a very different reception. They don't necessarily get opened and acted upon.

Marketers know that stuffing a transaction document's envelope with a free-standing, ride-hitching promotional document doesn't do much to improve the latter's chances of being read. But what if the two elements could be merged in the same printed piece, so there'd be no looking at the transaction without taking in the promotion as well?

http://americanprinter.com/inkjet-wide-format/printing_bills_thrills/

Megaspirea had a great Graph Expo, getting "Must See" status and word of mouth buzz that kept a constant stream of interested attendees in our booth. That Dynamic Envelope Creation is a revolutionary technology is illustrated in this article by the estimable Noel Ward on whattheythink.com.

  http://members.whattheythink.com/evt/07/ge07/ge07ward4.cfm

Megaspirea's VP of Global Marketing Scott Gerschwer has been selected by Output Links, an important industry news and information source, to write a bi-weekly column on mail and document output. His columns are archived at this link: 

• http://www.outputlinks.com/columnists/gerschwer