Seven Tips for Selling to Direct Marketers (PDF, 2

Tips for Graphic Arts Providers

Seven Tips for Selling to Direct Marketers Seven tips for selling to direct marketers

Direct marketing delivers the growth graphic communications providers need and the results marketers crave. Here are seven tips to help you win the business, supported by stories of graphic communications providers who are growing by attracting new customers and building loyal followings for themselves and their clients.

2 Tips for Graphic Arts Providers For years, it was enough to simply deliver attractive printed collateral pieces and/or advertising promotions. However, the economy has changed the landscape. Today, there are higher expectations and a confusing array of media choices for marketers and their customers.

One trend is clear. The momentum has dramatically shifted from budgets allocated All Media Spend to general advertising to budgets that are allocated to direct marketing. According to the Winterberry Group, a provider of 200 General Advertising syndicated research for the direct marketing Direct Marketing community, investment in direct marketing 180 continues to rise from 2009 in comparison to $163.9B general advertising year over year. 160 The economy’s effect on marketers has required them to be more efficient, 140 presenting wonderful opportunities for graphic communications providers who provide data-driven marketing programs. 120 $112.6B However, marketers are vastly different from traditional graphic communications 100 contacts. Winning their business requires 2004 2005 2006 2007 2008 2009 2010 2011E understanding their business objectives and personal motivations. The best opportunities 2010 DMA Statistical Fact Book; Winterberry Group Outlook 2011 come to those who can establish a consultative relationship, in which the graphic communications provider helps to develop The tips are: campaign strategies. 1. Target the right prospects 5. Leverage data to drive results This brochure offers seven tips for 2. Demonstrate your market knowledge 6. Capture powerful synergy by integrating developing successful relationships with multimedia campaigns marketers—and examples of graphic 3. Communicate your value proposition 7. Build windows of opportunity communications providers who have had 4. Overcome objections from success applying them. prospective customers

Tips for Graphic Arts Providers 3 Current trends present new opportunities

The marketing department and its surrogate creative agencies have long been the greatest source of corporate opportunities for graphic communications providers. While that’s still true today, the marketer’s needs are changing, due to three converging trends. • More consumers use “always-on” electronic media. • The media landscape is increasingly varied and complex. • Marketers have an increased need to show return on their investment (ROI).

The upshot: Today marketers need to engage of Direct Marketing Report, every $1 spent in However, working effectively with customers in a broad array of sometimes direct marketing delivers almost $12 in sales marketers requires not only the print and confusing and unfamiliar media—as well as revenue, compared to a little more than $5 design problem-solving skills graphic in traditional media—and to do it on a tight delivered per dollar of advertising. communications providers are known for but budget that is squeezed by the challenging business problem solving, as well. The top Direct marketing campaigns that use digital economy. More than ever before, they providers understand their customers’ sales media, such as e-mail, the Web and social need to justify their spend—or suffer the and marketing programs, and recognize areas media, play well in this world. Not only are consequences. The average tenure of chief of opportunity from their customers’ point they trackable, but with the right tools, results marketing officers hired at the largest U.S. of view. Often, their involvement in projects can be presented in real time. What’s more, advertisers since 2005 is just 22 months, begins with strategy discussions, further digital media—including pieces printed on according to a 2010 Adweek report. upstream from traditional print procurement digital presses—can be highly personalized at the end of the creation process. In this environment, marketing budget with relevant messaging that has been shown allocation has shifted dramatically from time and time again to boost results. The following are seven tips to help graphic general advertising to direct marketing. One communications providers succeed working For graphic communications providers, reason: Because direct marketing campaigns with marketers in today’s dynamic direct these trends present new opportunities seek responses, they are measurable at the marketing world. to establish sustainable differentiation by individual ad unit, enabling marketers to track becoming trusted advisors on new media, ROI and justify their spend. And according to on effectively mixing new and traditional the Direct Marketing Association 2010 Power services, on optimizing ROI and on reporting results in boardroom friendly ways that justify the programs.

4 Tips for Graphic Arts Providers The Brief—but Rising— Today’s CMOs are expected to oversee a Average Tenure of CMOs much wider range of integrated marketing and communications functions than in The average tenure of CMOs is 22 months the past and to lead corporate strategy, according to a 2010 Adweek report. not just communications strategy. And for CEOs, the average tenure is 53.8 months according to Spencer Stuart, In adapting to these new roles, failures executive search consulting firm. to establish shared expectations or to fit into corporate culture are frequent CMO tenures are shorter than those contributors to early CMO exits. The of other senior executives because recent longer tenures, Spencer Stuart “over the last decade, the overall notes, are partly due to more effective complexity and sophistication of the CMO performance and partly to the down marketing function have grown by economy, which has slowed the job market leaps and bounds,” according to a and reduced marketing budgets. Spencer Stuart “blue” paper.

Tips for Graphic Arts Providers 5 One: Target the right prospects

A wide range of business-to-business marketers, consumer marketers and non-profit and membership organizations use and benefit from direct marketing programs. How do you decide which targets are right for you?

First, be clear about what direct marketing Know your customers Sell more to your customers can do for an organization: Which customers are your most profitable? Selling more to current customers is almost • Drive measurable results in the form of Which generate the most revenue? Which are always easier and less expensive than sales (orders, donations and subscriptions), your least profitable—the ones that regularly initiating a new relationship. By taking good sales leads or traffic to a Web or social eat up an unjustified share of your resources? care of customers and becoming experts in their markets, you give your firm the strong media site. Ranking your customers in these easily reputation that often leads to referrals. • Extend the reach of a sales force to tracked categories provides a fact-based cost-effectively service lower-value means for prioritizing them as targets for Take it to the next level by sitting down customers, cover orphaned territories or new services. It may also lead you to scale with your top customers to learn more markets, help nurture or shorten long back relationships with your least profitable about them. Ask them what their business sales cycles or simply produce more clients, freeing resources for the more objectives are and where they want to take qualified leads. profitable work you seek. the business. Work on solving their problems to help them get there. • Develop a relationship with the customer to Knowing your customers also means nurture that customer’s loyalty and lifetime understanding their world—their industry, Your current customers also are the most value, while growing “share of wallet.” their challenges, their competitors and the logical targets for beginning sales of new ways their competitors communicate with services. Offer incentives to segments of your Then begin to think about how these services the targeted audience. Joining an industry customer base to make them feel “special.” can be applied on behalf of your current association can help you to better understand This is a great way to test and refine your customers—and prospects. Four guiding rules their industry, making you more valuable offerings, based upon their candid feedback. can help you through this process. to them.

6 Tips for Graphic Arts Providers Direct Marketing Advantages • Drives measurable results • Extends the reach of the sales force • Develops and nurtures customer relationships

Tips for Graphic Arts Providers 7 Target prospects like your Also consider your company’s resources. Do Among trade magazines, Target Marketing high-value customers you or your staff have contacts in particular Magazine publishes an annual list of the top When you begin targeting new business, industries? Does work you currently perform 50 mailers other than catalogs. The leaders try to find prospects that resemble your have any similarities to work done in in 2009 and 2010 came mostly from financial highest-value customers. With them, you can other industries? For example, if you ran a services (Citigroup, Mutual of Omaha, etc.), leverage your good reputation and relevant successful direct marketing campaign to a media (Dow Jones, Time, Conde Naste, etc.), skill set to establish immediate credibility retail establishment based on membership, merchandise companies (Home Depot, as an experienced partner who can add value you can apply those same services to Suarez Corporation, Bose, etc.) and right out of the gate. hospitality, airline or non-profit membership not-for-profits (Red Cross, Salvation Army, businesses. Just be sure to tailor your AAA, AARP, etc.). Be smart when prospecting examples to the targeted industry. 2010’s major new entry to Target Marketing outside your comfort zone Most successful providers focus initially Magazine’s Top 50 Mailers List In selecting new areas to target, consider on a few industries and expand as their (non-catalogers) was Proctor & Gamble. industry segments that are natural fits success warrants. Much of the information It debuted at the number 2 position, beaten for direct marketing services. Who are the you need for deciding which industries out only by the number 1 mailer Citigroup. biggest mailers in your markets? Which to target is readily available from trade industries are the healthiest and the most P&G launched Rouge, its health and associations and publications. recession resistant? Which are just emerging beauty magazine, with product coupons and have strong potential upsides? Focus For example, the DMA publishes information to drive traffic to retail stores. The concept on the areas that offer the greatest on direct marketing ad spends by vertical was extensively potential return. market in its annual Direct Marketing tested in the U.S. Statistical Fact Book and its biennial The and Canada. Power of Direct Marketing. They project It is targeting up that the vertical markets with the highest to 11 million direct marketing ad spend compounded households annual growth rates from 2009 – 2014 quarterly to will be manufacturers, financial services, foster long-term retail, utilities and healthcare. The highest relationships spend in 2010 was for banks and credit with beauty institutions, communications, entertainment care consumers. and recreation, healthcare, personal and professional services, manufacturing, store and non-store retailers, automotive manufacturers and retailers, computer and electronics manufacturers, religious and membership organizations among others.

8 Tips for Graphic Arts Providers

Personal Rewards Program Drives Business for Hair Salon Chain

Fantastic Sams provides its franchises with Creative theme: Variable themes for different direct postcards and e-mail to help them foster offers selected by franchises. Example for customer loyalty. haircolor promotion: “It’s fall. The colors are changing.” Customer: Fantastic Sams, a haircare salon chain in North America Media: • Postcards Providers: Group3 Marketing and Visions, Inc. • E-mail Challenge: Process: 60,000 to 90,000 postcards and • Reduce guest churn at franchises additional e-mails are delivered every six weeks. • Increase business at franchises Owners select the customer audience and offer Strategy: Develop two loyalty programs: and enter custom messages via the Web. Guests First™ to influence buying behavior Use of data: Variables include name, of new, active and lost guests, and Fantastic images, offer based on purchase history, Rewards™ to drive retention salon location, reward status or amount; the Audience: Current and lapsed franchise selects segments Fantastic Sams customers Results: Offer: Variable discounts and other offers • Response rate of 14% to 20% selected by franchises • Advertising to sales ratio of between 6:1 and 14:1 • Fantastic Rewards Members spend almost 33% more per transaction • Strong upsell performance

Tips for Graphic Arts Providers 9 Two: Demonstrate your market knowledge

Knowing that offering relevant insights is the best way to get a prospect’s attention is one thing. Finding those insights is another.

But you can. On a deadline, targeted research Where do I find information to be more On the Internet, you can also learn a lot can unearth the nuggets that make you relevant to a prospect? about your clients and targets. And by sparkle in front of a client. Longer term, Much can be learned via simple Web observing how they use the Web and social getting involved in the industry enables searches. The Web puts an amazing amount media, you may learn where they need you to continually enhance your market of information at your fingertips. Many marketing help. knowledge and form insights on trends. industry participants—including trade A number of organizations conduct and Plenty of resources are available to help you associations, postal services and service publish original research, some free, some build and nurture your industry knowledge. providers—present valuable research data on fee-based. The DMA and the Winterberry their Web sites. Some of the most valuable Group do research on media spending sites, along with some key trade publications for direct marketing and offer other and books, are listed in the Appendix. research-based insights. Synovate conducts thousands of interviews and focus groups

WIIFM: What’s in it for me? When marketers were asked about the most effective way for agencies to engage them in sales discussions…

92% said they might respond 85% said they would respond 55% said they would if the agency had produced positively if the agency wanted never respond to an approach some research or insights in to inform them about a recent focused primarily on the their vertical category case study in their category agency’s creative awards

Source: MediaPost, The Winterberry Group

10 Tips for Graphic Arts Providers annually to predict actual business results colleagues and potential customers. from various techniques. Print in The Mix Generally, the more you put into an industry Credit Card Solicitations aggregates credible research and information group, the more you get out of it. Nearly Doubled on the role and effectiveness of print in the The DMA (www.newdma.org) is a leading “Credit card solicitations nearly marketing media mix. Web sites for these and trade association for direct marketing in doubled last year to 2.73 billion, others are listed in the Appendix. the United States. Members get free access from 1.39 billion in 2009, according Read to stay current and have relevant to online training, reports and conference to market-research firm Synovate’s conversations. Some excellent sources presentations. Live training can accelerate Mail Monitor, which tracks direct for getting new ideas include magazines, your path up the learning curve in just a mail. And a double-digit gain is books and online newsletters. Some few days. You can also join DMA councils expected this year.” examples include: that specialize in any of numerous – Source: Wall Street Journal, vertical markets. www.wsj.com article “A New • Magazines—Target Marketing, Landscape for Credit Cards,” Multichannel Merchant, Philanthropy Organizations similar to the DMA can be January 23, 2011. and BtoB found worldwide. Canada has the Canadian Marketing Association, and in Europe the • Books—Made to Stick by Dan and Chip Federation of European and Interactive Heath and Nudge by Richard Thaler Direct Marketing represents numerous Be Your Target’s Customer • Online newsletters—WARC for country-based associations. Additional direct A great way to learn about specific targets international marketing focus, Chief marketing industry organizations are listed in is to become their customer before you Marketer and National Mail Order the Appendix at the end of this white paper. try to sell to them. You can gain first-hand Association News Many cities have local direct marketing clubs experience of their sales approach and the See the Appendix for more recommendations. and associations that meet regularly and benefits of their products and services— offer networking opportunities. And many a level of knowledge your target will Get Active in the Industry vertical markets have associations you can appreciate and, possibly, expect. A good path to becoming an industry insider join. Links to many of these organizations can You also score points when the target is to get involved in industry organizations. be found in the Appendix. asks the inevitable question, “Are you Many regularly provide venues for industry my customer?” experts to speak, as well as networking To further refine your knowledge and better opportunities, where you can meet with understand an industry’s challenges and opportunities, participate in and/or join vertical industry associations. There are associations focused in gaming, automotive, not-for-profit, retail and more. See the Appendix for a list of associations.

Tips for Graphic Arts Providers 11 Three: Communicate your value proposition

The mark of many successful graphic communications companies is their ability to serve as trusted advisors who lead customers to new and innovative solutions.

So how do you do that? Begin with broad questions, such as “What is your greatest revenue growth Start by defining your business with a challenge today—new customers, customer value proposition that reflects a realistic retention or customer profitability?” understanding of what you do well and what you don’t. Articulate your identity and skill Other sales consultants begin with a set on your Web site and in your marketing validation process to prove—and fine tune— materials. Then use your own programs to their knowledge of the client’s business, develop leads. Your cutting-edge techniques an especially good approach if you have a should drive superior results—while delivering history of specialization in the client’s market. a positive example of your work to your Avoid showing samples unless they directly targets. It’s like a car dealer bringing a test support a solution you propose based upon a drive to the recipient’s home. tested understanding of your target’s When meeting new prospects, remember business. Remember, marketers want ideas that first impressions count. People form a that can help them boost the number of leads first impression in five seconds, then spend they generate, the number of sales they win the next 15 or 20 seconds validating that and the amount of ROI they can generate. impression, according to Dan Hill in his book Showing them how they can do that is the Body of Truth. If the validation is positive, way you begin to develop a relationship. then they will devote additional time. Likewise, when marketers take your sales call, they are asking themselves, “Is this going to be worth my time?” Before you get a chance to develop a relationship, you must resolve this question by demonstrating your value. So don’t talk about yourself. Talk about your prospect. Any number of approaches can work but in all cases, be curious about their business. Some graphic communications providers engage in a series of questions to identify the prospect’s pain point or problem as a first step toward proposing a solution.

12 Tips for Graphic Arts Providers Lead Generation Campaign Lands New Business for Insurance Firm

Renaissance Insurance finds fortune Creative theme: Based on Chinese take-out food in a dimensional mailer with customized and fortune cookies fortune cookies Media: Customer: Renaissance Insurance • Dimensional mailer containing Chinese food Providers: AlphaGraphics, take-out container, fortune cookies with Cornerstone Promotional Products customized messages, booklet and GoodFortuneCookies.com • PURL Challenge: Process: Dimensional mailer drives target to a • Generate leads from large PURL, to set up an appointment with an agent commercial prospects Use of data: Name personalization, customized • Increase sales messages in fortune cookies; very clean list (only one return out of 126 pieces) Strategy: Use dimensional mailer to break down traditional gatekeeper barriers, strong offer to Results: spur response • 35% response rate (appointment Audience: Owners, CEOs and principal made with agent) decision makers at prospective commercial • More than $100,000 in new business in first business clients six months Offer: $50 gift card to Best Buy, Target or • Projecting a 5% increase in commercial sales dys, a local BBQ restaurant, for making an appointment with an agent

Tips for Graphic Arts Providers 13 Four: Overcome objections from prospective customers

Marketers own the budgets. They are the decision makers. You need to expand your contacts in an organization to include them. In this regard, the short average tenures of top marketing executives cited in the opening of this white paper are both good news and bad. The good news is that you have a new chance to get in the door every 22 months on average. The bad news: You must continually resell and justify your services.

The world has changed. Marketers need Why don’t I just use e-mail, search As reported in The New York Times, accountability and results. You must be advertising or social media? “Different people respond to different prepared to put some “skin in the game” by E-mail, search advertising and social media media,” said Aaron Magness, director for helping to deliver results—not just providing are great marketing tools, but they fall short brand marketing and business development design, printing and mailing skills. of results direct mail generates in audience at Zappos.com in Henderson, Nev. And Here are a few of the most common targeting, new customer acquisition and according to Cameron Brown, president at questions and objections you are likely to lead generation from high-value business King Fish in Salem, Mass, quoted in the same face when talking to marketers. and consumer audiences. As the economy article, “So far an average order from the recovers, many marketers are going back catalog is more than twice the size of an I use advertising. Why do I need to the medium they trust—direct mail. average order that began on Zappos.com.” direct marketing? Furthermore, the 2010 DMA response report Advertising and direct marketing are two found that direct mail generated an average distinct disciplines that complement one response rate of 4.4% for house lists and another. Advertising builds the brand image 1.9% for prospects, compared to 1.7% for awareness, recall and loyalty. Direct and 0.6%, respectively, for e-mail, and marketing seeks to generate responses that 1.7%1 for prospects in search. Superior deliver revenue, as well as awareness. It response rates are a key reason why functions like a sales force. direct mail is still the largest single channel in direct marketing spend. Most successful marketing programs use both advertising and direct marketing. My agency says it doesn’t recommend direct mail—it’s too old-fashioned and not the way to reach customers who are increasingly online. Not all age groups have equally adopted new media. And no single new medium has replaced its traditional media counterpart. Even the leaders in online and technology- based businesses recognize this. Google, Dell, Microsoft, eBags, Zappos and many other famous online marketers all use direct mail.

14 Tips for Graphic Arts Providers 1 Sales under $1,000 Miami University exceeds Honors enrollment target by more than 30%

Miami University and Xerox 1:1 Lab utilized a Strategy: Reach prospective students via direct Results: relevant approach to draw high-performing mail, e-mail and a Personalized URL to entice • Increased applications by 4% college-bound students to their Honors program. them to a university visit and apply to the • Target enrollment overachieved by 31% Honors program Customer: Miami University of Ohio • Decreased production by 29% Audience: High school students fitting the Provider: b+p+t communication solutions profile for their Honors program Challenge: Use of data: Data triggers for the relevant • Increase enrollment to the Honors program content include name, major, gender, campus • Create a more strategic approach with a visit and student interests limited budget

Tips for Graphic Arts Providers 15 We tried direct mail and it didn’t work The Loyalty Effect. And not all prospect lists I’d love to do one-to-one marketing, for us. Why should we try it again? are created equally. Lists that have proven but it costs too much. As in most human endeavors, direct behavioral traits—such as lists of buyers, While one-to-one marketing campaigns marketing campaigns are not created equally. subscribers, donors and members—will do typically cost more than comparable Some are better than others. almost always outperform lists compiled promotions that use little or no from multiple sources, which nonetheless personalization, they often deliver a higher Ask to learn more about the campaign, and can be valuable in specific situations, such return on investment to more than cover the offer to analyze it. If you can see a sample as targeting specific geographies or vertical extra cost. of the promotion, pay particular attention markets. Best practice calls for testing to the strength of the offer (reason to To provide proof points, create your own different lists or list segments to determine respond) and call to action, and to the use of customer success stories, or rely on those which audiences actually generate the personalization. To prompt a response, pieces created by vendors and third parties. For highest response rate. need compelling offers that are relevant to example, the Xerox 1:1 Lab is a marketing the recipient. • The offer. The quality of the proposal or initiative that has completed tests comparing proposition in the promotion is generally the results from a traditional direct Ask about the distribution list. Poor data and believed to account for another 40% marketing campaign to the same campaign poor targeting are two common downfalls of of a campaign’s success. The offer is with customized content that is relevant direct mail campaigns. intended to melt away inertia, to compel to each recipient. In tests run in multiple You can also review with your prospect the the recipient to act. Offers consist of four industry vertical markets, the more relevant three key elements that are the foundation of key elements: the product; the price or approaches have consistently delivered successful direct marketing: payment terms; the incentives, such as free positive results. Even highly regarded direct- shipping, a gift or bonus, and sweepstakes • The list or target audience. Common mail leader Reader’s Digest Canada as much contest opportunities; and other industry wisdom holds that 40% of as doubled response rates with the 1:1 Lab’s conditions, such as a free trial, automatic a campaign’s success is based upon more personalized approach. billing, guarantees and deadlines. the quality of the list. Customer lists Even with this proof, some marketers will generally generate five to 20 times as • The creative execution. The quality of the hesitate. For them, run a free or at-cost test many responses as rented prospect lists, copy, design and format of the mailing on one of their campaigns. It’s your chance to according to Frederick Reichheld, author of accounts for about 20% of a campaign’s shine, so take advantage of it, and you’ll likely success, according to industry wisdom. win a new client. Good creative is important, but its impact will be muted if the piece targets the wrong audience or if the offer is weak.

16 Tips for Graphic Arts Providers 2011 U.S. Direct and Digital Advertising Spend (Billions $)

Direct Mail Teleservices Digital DR Broadcast DR Print Insert Media

$0 $10 $20 $30 $40 $50

Source: Winterberry Group Outlook 2011

Tips for Graphic Arts Providers 17 Five: Leverage data to drive results

“The future of advertising is not about social, not about viral videos, not about mobile, not about any new medium or any new ad unit—but about data… Why is this so? Because the impression by itself is becoming worthless. The critical component that makes this new world work is data—not simply general research data, but data about you.” – Michael D. Andrew of MediaSmith, as published in MediaPost

Data on targets has far-reaching quality of the campaign and for reaching marketers can identify the precise target consequence in direct marketing individual targets in future initiatives. And population, deliver variable messages that campaigns. It underlies decisions about in the digital world, everything can be tracked are relevant to each recipient, and track each shaping the list, the offer and the creative in real time, adding to the quantity, quality individual response step by step as each content. Tracking the results, in turn, and timeliness of the data. individual opens, clicks through, responds generates new data for reporting on the and buys. That’s why common industry wisdom holds that “Data is king.” With the right data,

U.S. Spending, Marketing Data and Related Services (2008-2012 Estimated)

Spending on $12.0 BB (1) Online display-related data spending includes retarget- $10.8 BB Digital Data $10.0 BB ing services, intent data/ $300MM $520MM $870MM inferred data, offline data Share of Total 5.2% 7.2% Data: 2.8% used for online marketing. (2) E-mail-related data spending includes e-mail lists, database 2008 2010 2012 (Estimated) management/hygiene and analytic services. 1 Online Display-Related Data Spending (3) Direct mail-related E-mail-Related Data Spending2 data spending includes Direct Mail-Related Data Spending3 mailing lists, data management/hygiene and analytic services. Source: Winterberry Group analysis of various sources

18 Tips for Graphic Arts Providers Identifying High-Value Targets other characteristics. By using these measures A marketplace that delivers an average Direct mail works best when audiences to match the right media and campaign response rate of 1%, as shown in the are segmented by potential value and strategy to the right audiences, marketers can Average Response Rates graphic below, is promotions are targeted. optimize return on their budgets. likely to have segments that deliver much higher—and much lower—response rates. Customer value is established by measures Marketers generally put more effort into The marketer’s job is to find the high- of RFM—recency, frequency and monetary engaging their top customers. Some assign potential segments and not to be fooled by value of purchases. According to the Pareto the sales force or telemarketing sales force aggregated averages that can obscure the Principle—also known as the 80-20 Rule—a to target their largest prospects, using direct particulars of segment performance. relatively small number of customers deliver mail to fill out the coverage cost effectively. most of the enterprise’s income. Typically, Some contact higher value segments more And even within a clearly targeted segment, 20% of the customers deliver 80% of frequently than lower value audiences. the circumstances of individual recipients can vary widely. So a one-size-fits-all messaging the revenue. A strategy of boosting response rates from strategy and budget allocation is far less RFM is one of several measures used for these higher value audiences can improve effective than using personalization and effective segmentation. Others include ROI significantly. In contrast, forgoing format to make each delivery relevant. geography, behavior, target audience and segmentation in favor of a “one-size-fits-all” strategy over invests in low-value audiences and underachieves the potential of the high-value segments.

Pareto’s Law – The 80/20 Rule Average Response Rates If everyone gets the same promotion, budgets are wasted and ROI suffers.

10% 20% 80% + 3% 80% of the 20% marketing cost 0.25% Customers Revenue = 1% Average Response

Tips for Graphic Arts Providers 19 Here again, effectiveness is dependent in Business management visionary Peter Drucker have shown that 20 to 40% or more of online part on data quality. Typically, customer data prescribed that problem’s antidote when he purchases for catalog marketers are driven resides in multiple places: your client’s billing, said, “What gets measured, gets managed.” by their print catalogs. Knowing this, catalog customer and marketing databases, and a That’s why maintaining a marketing database producers thought twice about mailing fewer range of third-party lists. Find, acquire, merge tracking customer behaviors, such as catalogs to high-value audiences, which and mine this data. Cleansing (verifying) purchases and campaign responses, is vital might have cut costs during the economic ensures the data accuracy that drives results. to honing campaign strategies that lead to downturn but also would have reduced direct marketing success. revenue dramatically. What Gets Measured Gets Managed Tracking responses provides data that can “I know I’m wasting half my marketing Managing the Customer Lifecycle help marketers manage on many levels, from budget,” goes a well-traveled, widely Still, focusing exclusively on the top 20% of tweaking campaign messaging to adjusting attributed marketing quote. “I just don’t customers can be risky. Promotional fatigue strategies and tactics on a program level. For know which half.” and attrition will ultimately turn this into a example, studies from the U.S. Postal Service losing strategy. and marketers such as Williams-Sonoma That’s why you need to complement your campaigns with efforts to identify the best prospects for upselling, cross-selling and relationship development. This approach— There are customers at every called predictive modeling—expands the spend level who could join effective market universe. The net-net: Frequency of contact, type of the ranks of your most offer and promotional investment should valuable customers. be determined based on customer value and audience segment. Different strategies should be deployed for a prospect who has never bought from a company and a loyal customer—as well as for new, knowledgeable and lapsed customers.

20 Tips for Graphic Arts Providers “The campaign was a huge success and now we are rolling it out across Ford’s entire portfolio of extended service products.” — Mark Bardusch National Sales and Marketing Manager, Extended Service Business, Ford Motor Company

Relevant Direct Mail Based on Personal Data Boosts Ford Sales of Extended Service Contract by 35%

In a test of four approaches, Xerox 1:1 Lab and Audience: Ford F-150 truck owners Budco drive a sales increase with personalized, Offer: Ford Extended Service Plan (ESP) for relevant content, despite the Great Recession Ford F-150 trucks Customer: Ford Motor Company Creative theme: “Will you have it when Providers: Budco, Terminal Van Gogh Ltd. you really need it?” and the Xerox 1:1 Lab Media: Challenge: • Letter • Increase response rates to offers for the • Self-mailer (alternative test) Ford Extended Service Plan (ESP) for the Process: 20,000 test and control pieces were Ford F-150 truck mailed in four drops over a four-month period • Increase ESP contract sales • Identify best practices to apply to other car Use of data: Five triggers for variable content and truck ESPs shared between the test and control pieces: vehicle type and year, length of ownership, Opportunity: warranty expiration, plan pricing and vehicle • As the 2008 recession hit, many vehicle owners financing term. Four new triggers added for the kept their cars and trucks longer test piece: gender, income, age and geography. • Access to the Xerox 1:1 Lab to test its Results: traditional direct mail with a more • 35.7% increase in revenue relevant piece that focuses on solving • 5.7% increase in response rate a customer problem • Reduced production costs by 3.2% Strategy: Drive ESP sales for Ford and its dealers • Projecting that the new approach will generate by making direct mail solicitations more relevant millions of dollars in additional annual sales to each recipient • Adopting techniques from the test campaign for other ESP campaigns

Tips for Graphic Arts Providers 21 Six: Capture powerful synergy by integrating multimedia campaigns

Synergy is the interaction of two or more agents or forces whose combined effect is greater than the sum of their individual effects. Whatever your segmentation and frequency strategies, a consensus has emerged that the most effective direct marketing campaigns integrate multiple media with a common look and feel and a shared objective. Numerous studies have shown that this approach works synergistically to consistently deliver superior results, better than any single channel on its own.

As proof of multimedia’s widespread acceptance, market research and strategic consulting firm InfoTrends reports the mean number of media used in today’s direct- marketing campaigns is three. And revenues for cross-media direct marketing are expected to increase from $3.2 billion in 2009 to more than $5.2 billion in 2014, a 10% compound annual growth rate over the forecast period. The migration to multimedia is driven in part by user preference about how businesses communicate with them. Any digital medium can be incorporated in a cross-media campaign—from e-mail to micro websites, to social media and SMS text—so direct marketers can communicate in the media that best suit the audience. By integrating the communications, marketers can speak with one consistent voice across multiple channels to reach all their customers’ touchpoints. And many targets receive multiple touches, reinforcing the campaign’s messages. A closer look at the various individual channels reveals a surprise for some— far more direct marketing dollars are spent on traditional media than on newer digital channels.

22 Tips for Graphic Arts Providers Yes, digital has grown rapidly and will some advantages over direct mail, such as of consumers say they don’t open advertising continue to grow. And after the recession lower distribution costs and easier, faster e-mail, according to research by TNS that was hit in 2008, digital growth was spurred by distribution. However, it doesn’t perform reported in Canada Post’s, Sort, The Magazine direct marketers who appreciated the lower as well as direct mail in acquisition of new for Direct Success. And according to a study distribution costs of search, e-mail, social customers. Many consumers reject unsolicited by Return Path in the same article, only about marketing, mobile, display and other forms e-mail and dislike too frequent contact, 80% of 500,000 permission-based e-mail ads of online marketing. But as the economy has leading many to opt out. Nearly 60% reached inboxes. recovered, many marketers have returned to the traditional media they have long trusted. While some marketers have shifted media spending to digital media as a lower-cost Revenues from Cross-Media Direct Marketing alternative to their traditional campaigns, most have found that online channels 6000 demonstrate greater value as a complement $5,216 to direct mail applications, reinforcing the 5000 $4,685 value of integrated programs. The level of $4,230 $3,856 acceptance in various industries of direct 4000 $3,490 mail’s value as a complement to digital is $3,188 indicated by the fullness of the dark circles. 3000 See the graphic on the next page. In Billions In Support of traditional media is justified 2000 InfoTrends, The by superior performance compared Cross-Media Direct to digital media. E-mail, for example, has 1000 Marketing Opportunity: A Multi-Client Study, October 2010 0 2009 2010 2011 2012 2013 2014

Tips for Graphic Arts Providers 23 Data Breach Begs Question, Can You Trust upshot: Consumers need to be vigilant, and variable software packages—make it easier That E-mail Solicitation? marketers need to keep traditional media, than ever for consumers to connect to a Web Some security experts believe that the recent such as direct mail, in the mix. location, by simply scanning the code with a mobile device. theft of e-mail lists from online marketing At any rate, with the widespread deployment firms has been the biggest ever. These firms of multichannel campaigns, greater use Rules for multimedia synergy success include: reported that the compromised information of traditional media is not necessarily at • Speak with one voice. “was limited to e-mail addresses and/or the expense of digital media. Often, both customer names only.” However, this data are deployed. And a number of recently • Choose the right media for the can be valuable to “phishers” whose modus developed technologies improve the target audience. operandi is to gain access to personal development and management • Have a compelling offer and accounts via e-mail asking recipients to click of these multimedia campaigns. memorable message. on a link to update their account information. Success rates are likely to be higher when For example, cross-media software from See the next page for an example of how a phishers send requests to people they know XMPie, A Xerox Company, uses a common fitness chain company targeted its audience have an account with a given institution. set of rules and assets to drive creation in to get action. multiple media. This also enables results While many firms encourage customers from all media channels to be rolled up to do business online, fraudulent activities into a single marketing console to provide like phishing and data breaches dampen key metrics, such as ROI, across the entire consumer enthusiasm and their likelihood campaign. And increasingly popular QR of responding to e-mail solicitations. The codes—readily created for print in most

2011 Estimated Direct Marketing Spend Mail Emerges as Ideal Complement to Digital by Channel Though some marketers shifted mail spending to digital media as a lower-cost alternative to their traditional campaigns, most have found that online channels demonstrate greater value as a complement to DR Digital direct mail applications, reinforcing the value of integrated programs. Broadcast 19% 16% Automotive Not for Profit

DR Print Business to Business Publishing 9% Teleservices 24% Financial Services: Retail: Multichannel Other 2% Banking and Credit Card Inserts Financial Services: Direct Mail Retail: Traditional 1% 29% Insurance Healthcare/ Technology Pharmaceuticals 2010: $154.4B Hospitality Telecom 2011: $163.9B Winterberry Group, A Channel in Transformation: Winterberry Group Outlook 2011 Vertical Market Trends in Direct Mail 2009

24 Tips for Graphic Arts Providers “The way XMPie (cross-media software) enables campaigns to be managed from a single dashboard is brilliant.” — Espen Borg Larsen Assistant Manager of Web Applications, Wittusen & Jensen

Personalized, Multimedia Referral Campaign Generates $2 Million in Revenue for Fitness Chain

Elixia health-and-fitness chain boosts Audience: Process: Postcards drive recipients to customer loyalty and new membership in • Current members PURLs to update account and send e-mail refer-a-friend campaign invitations to friends, interact with them • Their fitness-conscious friends and track results. Customer: Elixia, a health-and-fitness center Offer: Recruit a friend and both get two months chain in Northern Europe Use of data: Personalized images by age free membership and gender, personalized name and location Provider: Wittusen & Jensen Creative theme: “Get a good friend to become a of club Challenge: healthy friend” Results: • Retain customers Media: • 2,500 new members compared to 37 from • Increase membership • Postcards the prior campaign Strategy: Invite members to refer friends, • PURLs • Annual revenue of $2 million expanding overall membership and motivating • E-mail • 27.5% response rate members to stay in the club with their friends

Tips for Graphic Arts Providers 25 Seven: Build windows of opportunity

Leaders in direct marketing find ways to stay ahead of the curve in an incredibly dynamic market where timely insights and miniscule adjustments can make the difference between grand success and bland mediocrity. You need to give your firm every possible chance to compete with—and ultimately become one of—those leaders.

• Train and educate your staff to be • Establish a program of delivering regular You need to continually develop fresh insights knowledgeable direct marketers. The communications that demonstrate your that improve your offerings—or risk losing insights you need to gain an edge can value. Use this marketing vehicle to show business to companies that do. You need come from anyone on the staff, so help how you provide market-specific solutions to see the world from your customers’ point prepare them to make a contribution. and communications that solve your of view, to develop services that meet their Training is available from associations like customers’ problems. Be consistent in precise needs. You need to put your business the DMA, vendors and adult education sticking to your program, as windows of on the line with your customers, to be a programs at colleges and universities. opportunity can take time to open. partner committed to delivering return on investment and higher revenues. • Define your business, identify your targets • Showcase the value of your experience by and stick with the strategy. Don’t be participating in local and national events The reward: Your marketing services can be distracted by random opportunities that in advertising, marketing and specific a source of sustainable differentiation in a take you off track. vertical markets. growth market. That’s a worthy result for any graphic communications provider.

26 Tips for Graphic Arts Providers “During economic difficulties some companies pull money out of their marketing budgets. We believe you must continue to market but wisely and measure results to prove your program is worth the expense.” — Crystal Uppercue Marketing Manager, EU Services

Direct Marketer Generates $200K+ ROI On Seminar Series for Customers and Prospects

EU Services nurtures customers and prospects by Audience: Process: A multitouch, cross-media campaign sharing knowledge on growing their businesses • Current customers drove recipients to PURLs, where they could register for seminars, request reminders when Provider: EU Services • Prospects seminars on certain topics become available and Challenge: Offer: Free seminars on direct marketing refer colleagues techniques at EU University • Optimize attendance at EU University seminars Results: • Improve attendance rates among registrants Creative theme: “The Road to Success” • 58% increase in attendance Strategy: Build positive customer relationships, Media: • 44% decrease in number of “no shows” demonstrate direct marketing knowledge and • Postcards • 18% conversion rate with a $244,000 ROI attract new revenue-generating business by • Catalogs • Confirmed and collected key data on prospects offering free seminars on industry topics • PURLs • E-mail

Tips for Graphic Arts Providers 27 Seven Tips for Selling to Direct Marketers

Appendix

Here is a brief selection of useful resources. Postal Web Sites • www.usps.com—United States Bibliography Direct Marketing Trade Publications • www.canadapost.ca —Canada “Fantastic Sams Salons Drive • www.adage.com —Advertising Age • www.mmc.co.uk—Mail Media Mail Centre, Business with Personalized Rewards • BtoBOnline.com—BtoB Magazine United Kingdom Communications,” a PODi digital print • DeliverMagazine.com —Deliver Magazine case study, www.podi.org/casestudy. Direct Marketing Resources • FundRaisingSuccessmag.com— “Renaissance Insurance Foretells • List of global and regional U.S. A practical guide for nonprofit organizations New Business with Lead Generation direct mail associations regional— • MultichannelMerchant.com — Campaign,” a PODi digital print case study, www.directmarketingevents.com/dme/ Multichannel Merchant www.podi.org/casestudy. dmorgs.asp • Philanthropy.com—The Chronicle “Ford Motor Company and Budco Drive • Print in the Mix—Data on the role and of Philanthropy Results with Relevant Marketing,” effectiveness of print in marketing • TargetMarketingMag.com — a Xerox 1:1 Lab case study, www.xerox.ca/ printinthemix.rit.edu/ Target Marketing Magazine digital-printing/direct-mail/enca.html • Plunkett Research—Provides industry • www.warc.com—global provider of ideas and ® statistics, trends and company analysis “XMPie Helps Elixia Fitness Centers evidence for marketing people www.plunkettresearch.com Generate €1.5 Million in New Member Fees,” an XMPie case history, http://www.xmpie. Books • www.directmarketingsmarts.com —Web page com/success-wj • Made to Stick by Dan and Chip Heath of Beth Smith, Smith Browning Direct, who has more than 35 years of direct marketing “EU Services Increases Business Through • Nudge by Richard Thaler experience and is a longtime educator. Educational Seminars,” a PODi digital print • Predictably Irrational by Dan Ariely • www.marketingcharts.com —A Watershed case study, www.podi.org/casestudy. • Successful Direct Marketing Methods Publishing publication featuring marketing “Seven Steps to Transition from Print Vendor by Bob Stone and Ron Jacobs data and stats to Marketing Communications Partner,” • Create Relevant Direct Marketing That Graphic Impressions Magazine, by Shelley ® ® Vertical Industry Organizations Gets Results, a Xerox ProfitAccelerator Sweeney, vice president/general manager, Digital Business Resource Automobile—www.nada.org Data Center Service Bureau and Direct Mail (National Automobile Dealers Association) Segments, Xerox Corporation. Industry Associations Banking—www.aba.com • www.the-cma.org—CMA “Xerox Helps Print Firms Become Marketing (American Bankers Association) (Canadian Marketing Association) Services Providers,” Graphic Impressions Magazine, by Gina Testa, vice president/ • www.newdma.org—DMA Credit Union—www.cuna.org (Credit Union general manager, Worldwide Graphic (Direct Marketing Association) National Association) Communications Business, Xerox • www.fedma.org—Federation of European Gaming—www.americangaming.org Corporation. and Interactive Direct Marketing (American Gaming Association) “Marketers Seek Print That Delivers • www.nmoa.org—National Mail Order Healthcare—www.imshealth.com ROI and Innovation,” Graphic Impressions Association, this site includes links to Magazine, June-July 2010, by Gina Testa, international direct marketing and mail Hospitality—www.hsmai.org (Hospitality order contacts Sales and Marketing Association International) vice president/general manager, Worldwide Retail—www.shop.org (A division of National Graphic Communications Business, Retail Federation) Xerox Corporation.

Telecommunications—www.tiaonline.org (Telecommunications Industry Association)