A digital printer is like a gym membership — the only way to get results is to use it. But too few marketers are, says Jim Schleck, chief operating officer for Yoffi Digital Press.
Schleck should know — his firm supplies digital technology to printers. And, he says: “There are a lot more digital printers out there today than three or four years ago, but how the technology is being used hasn’t developed as quickly.”
What is digital printing, for those who haven’t heard of it?
It’s a technology that allows you to spit out materials from a computer file without film or a plate maker. Also referred to as on-demand, it is good for personalized mailings, labels, plastic cards, fliers, postcards, and statements.
But the equipment is only as good as the data it is fed.
“Let’s say you don’t know Tom Smith is married, has two kids, buys every Wednesday, and is African-American,” Schleck says. This is bad because the whole idea is to take “information, customer behavior analytics, and apply some kind of trigger to them so there is a continual flow of information,” he adds.
That’s one challenge. Another is that even printers don’t always understand the process. “A lot of people who have data and presses haven’t been able to put those two things together,” says Stefan Agustsson, Yoffi’s vice president of operations. “Printers aren’t direct marketers — they don’t understand data.”
He adds: “Without measurement, the technology is useless.”
Then there’s cost. Digital toner prices make the process “prohibitive for more than a 5,000-copy run,” says Jim Treis, executive vice president of sales and marketing for printer Arandell Corp. “Those consumables are still too high for the industry.”
Finally, the technology works best for niche firms such as a “real estate company that sends out 500 postcards with a picture of the house and the realtor,” says Dave Henkel, president of direct mail printer Johnson & Quin. That doesn’t include mass catalog or credit card mailers.
So why are we writing this article? Because some catalogers are testing digital printing and getting good results.
One is Mackenzie Ltd, the upscale food merchant. It uses the technology for small four-color pieces like certificates and promotional inserts.
What’s the payoff?
“Low cost for short-run work and super-fast turnaround: one day,” says president Laura McManus. “We see a lift in sales for the promotional insert cards that we put in orders.”
What’s more, the fast reaction time enables the company to “experiment with very low-quantity items without investing too much,” McManus says. For example, it may try laminated insert cards.
Then there’s Fairytale Brownies. It recently used digital printing for a 5″ × 8″ insert. “We use it on a project-by-project basis, says graphic designer Erin Kress. “I could see us using it more in the future if it’s something that’s a short run and we need it quick.”
This trend could accelerate as catalogers try to work around recent postal hikes. “Quantities and page counts are going down,” says Tom Bush, senior vice president of Suttle-Straus, a communications service firm. “People will be mailing fewer laser-printed catalogs, and those they do send will be highly targeted.”
He adds that sophisticated firms are testing personalized fulfillment kits and letters in tandem with personalized e-mail offers. And a few are redesigning their catalogs to meet letter-size standards, and highlighting specific products that the customer has a history of ordering.
“We have a couple of large catalog clients who use 10 different segmented offers based on customers’ buying habits,” Bush says. “That’s where the analytics come in.”
Granted, not many merchants have gotten to this stage, but Bush feels they will.
“Our experience is that personalization and multichannel distribution with e-mail will complement each other,” he says.
Bush notes that response rates are “several percentage points higher than the ones you get by sending out generic catalogs alone. And you achieve higher ROI by reducing print and postage costs to non-responsive customers.”
How high?
Schleck claims he has seen response rates improve by 6% to 12%. But personalization is critical.
“Today’s consumers are expecting that,” he says. “It’s not just about who you talk to, but how you talk to them.”
But the final cost depends on whether the piece is in black-and-white or color.
“Overall, it’s a multiple of five times for full color versus black-and-white digital,” Henkel says. “That number has declined considerably in the last few years since the first wave of color emerged, and we anticipate it will continue to decrease.”
But, he adds: “We still see a high demand for black-and-white, and less for color.”
Another benefit is speed. Short-run digital printings are “much faster” than offset, Bush claims.
“We get the files from the clients and that job can be done in a day or two, and 3,000 to 5,000 copies of digital is lower in cost than offset,” he says.
What’s more, marketers can reach their customers faster even if they have a small database. Content for digital printing remains in digital form — in PDF, PPML, PostScript — throughout the process.
And despite the obstacles, digital printing is getting better by the day.
“Giants like Kodak and Hewlett-Packard brought research and technology when they got into the market — far superior to what was there,” Bush says. “And it’s trickled down through the industry. Within two years, conversion from offset or inkjet to digital has been rising dramatically.”
Moreover, the end users are more knowledegable about it.
“Once they make that first foray into digital, they never go back. They see the fruits of responses.”
But Bush is realistic.
“The vast majority of small to mid-size businesses don’t get it yet,” he says. “Small to medium-size companies are slower to adopt unless they’re offering high-tech products or services.”
What does the future hold? “Highly personalized pieces may stay in the laser arena, but it’s largely related to how you’ve used your data,” Bush says. “Hire the brightest, smartest IT people and have your marketing focused, and grow much faster rates provided you have the full turnkey solutions and analytics on the back end.”