Given all the hoopla in the ’90s about how technology would enable one-to-one marketing, you’d think by now everybody would be receiving personalized catalogs. But few catalogers have embraced the strategy — even though it’s come a long way from low-rent-looking ink-jet messages.
It’s not that catalog mailers don’t want to customize their books: The interest in personalization “is much greater than 10 years ago,” according to Bruce Jensen, vice president of U.S. sales for printer Transcontinental’s Catalog and Magazine Group. The latest print personalization options include automated ink-jetting, inserts, onserts, binding and versioning, and variable color data management, Jensen says. “It’s tied into the capabilities of technology, equipment and the ability to use a customer database.”
Surprisingly, the customer database appears to be the stumbling block for many catalogers. Investing in the latest technology and equipment for print personalization is the easy part. Most mailers are struggling with building a dynamic database and understanding how to use it for personalization.
Few catalogers have the IT resources to build dynamic databases, says Jim Treis, executive vice president of sales and marketing for Menomonee Falls, WI-based printer Arandell Corp.
“To run personalization, you have to have ink-jetting, streaming personalized messaging, put together by customer record,” Treis says. Many catalogers don’t have the capacity to build and maintain dynamic databases, so typically only the larger mailers with expanded IT departments are using them, he says.
While it’s possible to have an outside firm build and maintain a dynamic database, that can be expensive, Treis notes. It’s also not always practical “because of how often you’re changing programs.” It’s not just building and maintaining the databases, but also keeping them flowing, he adds.
Do you really need a fancy dynamic database? You do if you want to do personalization right, according to many experts. You need the database to track customer purchases and create offers for them based on what they bought in the past.
For instance, if you know a customer bought a specific blouse, the database could suggest items such as a skirt to match, or other fashion accessories to go with the outfit. You can create a personalized message to the buyer promoting products she is likely to buy.
The trick is being able to get the information and the offer out quickly, Treis says. “The best time for a sale is right after someone has ordered because they’re hot.”
The good news is that digital printing technology is faster and cheaper today than it was just a few years ago, and the quality is much improved. Take ink-jetting, for instance. Advances such as optical readers for merging personalized pieces with static pages, as well as higher-resolution imaging capabilities have resulted in much better quality of the end product, Transcontinental’s Jensen says. “It’s much better today than it was 10 or 15 years ago,” he says, and it will continue to improve in quality. What’s more, it’s been getting faster, “which is a huge plus for digital printing,” he says.
How are mailers using the technology? Transcontinental is using barcodes on personalized cover wraps combined with static body pages, Jensen says. This creates highly-personalized catalogs, “which show the previous buying history of that particular customer.” Indicating the customer’s previous purchase on an offer “creates immediate recall for reorders,” which is especially effective for b-to-b customers, he says.
Indeed, says George Zengo, president of catalog, direct marketing, and retail services for Chicago-based printer R.R. Donnelley, mailers have several choices in customization technologies, from ink-jetting to digitally-printed signatures, he says. In direct mail, “digital print personalization and customization is quite common in single color ink-jet today.”
As delivery mechanisms have become more powerful, for instance, with high-resolution four-color inkjet, “the cost per page has fallen,” Zengo says. Overall, Donnelley is seeing customization and personalization becoming more prevalent across the board, he says. “As positive responses climb against falling digital print costs, the medium becomes even more popular.”
AT WHAT COST
There’s no question that the technology is there, but the cost is still keeping many mailers out of the personalization game. As Treis notes, “we just don’t see a lot of people using it because they’ve got other uses for their money right now.”
With digital printing, the initial prepress work and setup of the press is less than with a conventional press, says David Spencer, CEO of research and marketing support consulting firm Spencer & Associates Publishing. But the continuing cost of the digital run can be much higher. “It’s really a function of how many copies you’re making,” he says.
For 100 copies of the same page, digital printing is probably less expensive, whereas 10,000 copies of that same page are cheaper to run on an offset press, Spencer says. For that quantity, digital presses run about 5 cents per page, he says, where an offset page costs less than 1 cent per page. The toner makes up the majority of cost involved with higher quantities of digitally-printed pages, he says.
Until digital toner costs come down, “it’s basically prohibitive for more than a 5,000-copy run,” Treis says. Technology will allow for longer digital runs in the future, but it’s not cost-effective yet. “There are so many digital presses out there, but those consumables are still too high for the industry.”
Indeed, gifts and housewares mailer Miles Kimball would like to do digital print personalization, but marketing manager Ryan Hennig says the cost outweighs the potential gain right now. The Oshkosh, WI-based company tested some digital variable printing, he says, “and it’s a fairly expensive option. From our test results, we see gains, but it’s hard to gain from a cost standpoint. We use ink-jetting on our covers to vary promotions and to speak to customers in different ways.”
For example, Hennig says that to use a digital variable printing for its catalog cover would cost more than four times the price of an ink-jetted cover printed via standard Web offset. Digital printing would cost Miles Kimball about 14% more for an entire campaign. “It’s significant enough where we’d need a large gain,” he says. “We’re hoping the cost of that technology comes down.”
The cataloger already knows that personalization pays off for it. Just putting a customer’s name on a cover still generates a lift in response, Hennig says. “The most effective campaigns are ones that speak directly to the customer; for example, thanking them for their last purchase, and gearing a promotion around that.”
Hennig says this year Miles Kimball has been more specifically targeting various customer groups, “acknowledging them as our best customers, saying thank you, and giving them a special promotion such as free shipping off their next order, or a percentage discount, or a $5 gift voucher.”
CUSTOMIZE VS. PERSONALIZE
While personalization might make an impact, R.R. Donnelley’s Zengo says customization of the offer is more likely to increase openings, readership, and order rates. “Customization is a fundamental law of good direct marketing,” he says. “The closer the linkage between a recipient’s buying habits and the offer on the page, the more likely a sale will occur.”
As far as customization, Zengo says R.R. Donnelley is seeing more variable cover options, as well as dot whacks and other applied variable offers. Mailers are using more of these strategies in place of versioned catalog covers to improve overall campaign economics, he says. “We are also providing more versioning options through ink-jetting.”
Personalization is particularly effective in new customer acquisition, Zengo says, “when mailers are looking for tools that may break through the competitive clutter. As consumers become more sophisticated, the personalization feature seems to have less effect than good customization.”
Whether you call it personalization or customization, the bottom line is most mailers will remain on the sidelines until costs come down for the latest technologies. “The capabilities have increased significantly, with digital variable printing, and we’re moving in that direction, but we’re not quite there yet,” says Miles Kimball’s Hennig.
But Hennig hopes to try digital printing soon. “We need to test into it, and we need to approach it correctly if we’re going to be able to speak one-to-one to our customers.”
Printers could do their part by helping customers understand what technology can do for them, Jensen says. “Maybe we need to better explain to customers these methods.” It’s a combination of technology, customers getting smarter, printers training sales reps on technology, and catalogers being smarter as to how they mail, he says, “now more than ever.”
4 FACTORS to consider
Print personalization is much more than slapping a person’s name on a catalog — it’s about customizing a presentation to a customer or prospect. “The most successful campaigns exist because of a tight link between list and offer,” says George Zengo, president of catalog, direct marketing, and retail services for Chicago-based printer R.R. Donnelley.
A well-targeted list, Zengo says, will be selected by segment codes on each record in the master file, and these codes will trigger a particular offer, graphic look, and format feature so that the final product in the mail is customized to the recipient. R.R. Donnelley’s customized printing work is typically based on these factors:
Customized offer options: Based on RFM (recency, frequency, and monetary) data, the offer algorithms can adjust for timeliness, quantity, discounting, deadlines, product add-ons, promotional incentives, and premiums. Catalogers can use the technology to focus promotions such as credit, free shipping, merchandise clearance, and discounting.
Point-of-purchase drivers: In addition to selling products, catalogers also use their books to drive store and Web traffic, and to track the associated response to the campaign or promotion. Catalog tracking tools include use of barcodes on the offer, as well as faux credit cards and other removable offers in the form of dots and labels that are redeemable at point-of-purchase.
Customized graphic options: Data triggers will pull in stored fixed images that complement lifestyle, geography, seasonality, and product usage. For catalogs, this can include ink-jetting variable text, as well as graphics such as maps.
Customized format features: This includes use of variable inserts, signatures, covers, fragrance inks, and dots to improve lift in a catalog. You can also use these features to drive changes on a Website landing page, where customized URLs, PINs, or key codes can present different Web pages, as well as pre-populate a Web page.
Bottom line, Zengo says, you want to use customization to present the most relevant offer, and meaningful copy and graphics to a specific reader, he says. “This moves the mailer even closer to realizing the benefits of one-to-few or one-to-one marketing.”