Speaking at the 2009 PODi AppForum, Sydney, will be Kate Dunn, President of the Digital Innovations Group, USA, and Waleed Ashoo, CEO of LithExcel USA, Chairman of the Digital Imaging Customer Exchange and PODi USA board member. Both speakers have had long and impressive careers in the print industry, and are leaders in the use and marketing of relevant digital print. Ahead of the AppForum they shared their thoughts with GASAA and PODi Aust NZ on the know-how, why and trends of relevant digital print.

 

Kate Dunn, President DIG, USA
Where do you see the future of digital print?
Color digital print is growing mainly because of the migration from offset printing. But print on the whole is down and we aren’t going to see it come back to the pre-recession levels. Marketing budgets were slashed because of the recession and communicators were forced to look at more cost effective ways to get their messages into the market place. Stand-alone print of any kind is not the future. Print, as a medium is not dead but the world is learning that it works best in conjunction with other forms of communication. Cross Channel or Multi-Channel communication is the future of marketing. As an industry, our opportunity lies in looking at forms of communicating that are also stand-alone and stealing that market by adding multiple channels including print to how they are used. For instance think of billboards which include a gurl (generic url) for response which now makes it possible to track the value of the billboard advertising, create an interactive conduit for learning what is important to the prospect and incorporate a nurture and conversion process for that lead that may include print, email, cell or even social media.

What’s the uptake of variable data like in the US? What’s driving it? What’s holding it back?
Digital color print is the only part of print volume that is growing at this time in the US. Many in the US are still mistakenly thinking that print volume will rebound after the recession but I don’t think it is going to. There are just too many other ways to communicate today and we’ve learned that there are more effective ways to accomplish business objectives than sending out a million pieces of mail and hoping for a .08% response rate. A lot of marketers had just taken the easy way and continued to do mass mailings because it’s something that they had always done. But it’s a different world now. Everybody is looking at more efficient and effective ways to communicate their message. That’s where variable data comes in although I really don’t like the name ‘variable data.’ It doesn’t mean anything to those outside of our industry. The point is that you can communicate with individually relevant copy, images, response mechanisms and offers. It’s the relevance that cuts through the clutter and gets noticed. We’re not talking about putting a name on something – that’s more cleaver than anything else. I’m talking about unique content based on your demographic characteristics, buying patterns, interests etc. Once you marry what can be done with relevance at the print level with multiple channels also using relevant content you have something that can generate interest, consideration, conversion and loyalty cost effectively. We all know it works but for years spreading the word about it was left in the hands of the printers who had spent tons of money on the equipment and software but very little on a sales force capable of understanding communication needs and building a business case for their clients to integrate relevant print into their mix. It simply can’t be sold by ‘pitching’ the capabilities and technology. It has to be sold by sales professionals who understand how to develop a need for business results into a solution incorporating variable data print and now relevant communication using multiple channels.

How has the global financial crisis impacted on relevant digital print? Has it presented any opportunities for targeted marketing?
The global financial crisis is really helping to open the eyes of a lot of marketers out there to other methods of communication. It is at the root of the growth in social media as a business tool because it can be done relatively cost effectively. However, digital print hasn’t grown like it should because there really aren’t enough sales people out there who know how to sell it. Poorly trained sales reps turn everything into a conversation about price which has resulted in margin erosion. Right now in the US, printers are selling whatever they’ve got for whatever they can get for it. In many cases the sales price is less than the raw material costs. Obviously this can’t go on indefinitely for those businesses but it will have a lasting effect on the perceived value in the market place. Digital print can do so many good things from increased response rates to reduced inventory costs to better cash management. The sales price should be based on the return it can bring not the actual cost to produce it. Our industry just has a terrible time with that concept. Think of Starbucks, it doesn’t cost them $4.00 to make a latte but I gladly pay it because of how I feel when I drink it. I’m paying for that feeling, not some coffee and milk in a cup. The price of digital print should be based on the value that it brings the buyer not the production costs. There are tons of opportunities out there for targeted marketing right now but again we are handcuffed by our sales people. They are used to calling on people who see print as a commodity. Those folks in production or purchasing or traffic have been told to reduce spending so they are looking around for people who will cut their prices and on any given day there will always be a printer more desperate than the next one. But if we were calling on senior level decision makers, we would learn that they don’t just want reduced spending they want increased sales too. Digital print can help them do this but in most cases they don’t hear about it because someone below them as made a decision based on price, not on the return. If I had one wish for this industry, I’d wish for one big webinar with every CEO in America where I could show them examples of how getting the right message, to the right person, at the right time and now, in the right way, can make them money and save them money.

If you were an offset printer today, how would you get into VDP? Is the emphasis on equipment or people?
Well at the risk of upsetting the vendors, I wouldn’t buy anything right now. I’d focus on finding a sales professional who was comfortable talking to C-level decision makers, who understood how to solve business problems and had some grass roots knowledge of marketing. They need enough marketing expertise to figure out a plan to effectively communicate a message to a targeted audience and then nurture that interest through to conversion and beyond. I’d partner up with businesses who don’t get that part but can manufacture the digital print, emails, landing pages, or whatever else I needed to execute the strategy. I’d build my business that way and then decide if I wanted to add manufacturing or just focus on thinking up the solutions. I’m not sure that the two should even be combined. It takes a different mindset to be a manufacturer than it does to be a creative solution provider. One sells what they can make and the other figures out how to get made what they can sell.

Can you name five key requirements of moving into VDP?
The answer to this one depends on if you are a manufacturer or a communication solution provider. To be successful manufacturing a quality variable data application you need:

1. A different workflow than your offset workflow. It’s got to be different. You can’t do all the steps just faster or you make mistakes. You can’t use the same checks and balances that you have in your offset workflow because it take too long. Start with what you need it to be and develop it don’t just try to cram into what you already have.
2. An effective proofing and QA process. Mistakes are costly for you and the customer.
3. Organize your employees into teams who are responsible for the finished product not just a portion of the process. Everybody involved has to understand the ‘whys’ and not just the ‘hows’ of the project. Everybody has to be on their toes all the way through the process with no finger pointing.
4. An intuitive data person, not a button pusher. This probably means that the same person who has been doing your mailing data is not this person. You need a person who can add value by double checking what the customer has given you, finding their errors and seeing things that they don’t even see.
5. Select only software partners with fantastic training who teach not just the ‘hows’ but the ‘whys.’ We probably know more about the inner workings of our software than the providers know about their own product. We’ve been at this now for 15 years and in the early days I was constantly frustrated because I’d dream something up to solve a customer’s problem or achieve an objective and be told by our partner that the software couldn’t do it. I can’t tell you how many times I sat around with my team and said “Here’s what I want to do. They say it can’t be done but I think it can. Let’s figure something out to get from point A to point B and they made it happen.” You aren’t going to be able to wait 3 days for a call back or for a specialist to be called in either so make sure their training will teach what you need to know to figure it out yourself.

As I said before you need a sales team of professionals that know how to sell solutions and you need a basic understanding of marketing. A lot of that is common sense but you need people that realize it’s common sense and aren’t going to be afraid to talk to senior executives.

What impact has online marketing and communications had on print in the USA? Are they seeing a swing back to print?
Success is about integrating all of the communication channels that make sense together to solve the objectives. Whenever something comes into the mainstream the pendulum swings too far to one side. Right now you are seeing that with social media. Everybody is using it and many aren’t using it well but that’s not such a bad thing. The rest of us get to learn from them. Eventually you end up with some best practices that you can use to develop effective strategies. Everybody loves the web and for good reason but it’s not perfect. For instance, if you wait for the prospect to have his needs change, realize they’ve changed, research his options, compare all of them and then call you for a price or buy it directly via the web, he’s done all the hard work. You’ve missed a chance to help him solve his problem a different way than he was thinking. Basically, print needs to be used where it makes sense and other things where they make sense. There are no one-size-fits-all answers. It will be different for every company based on their value proposition and competitive differentiators. That’s why successful companies will have some expertise in helping their clients figure out the best way to get the right message, to the right person, at the right time and in the right way, to drive awareness, interest, consideration and loyalty.

Has there been growth in transpromo marketing in the USA?
It’s growing because if you are communicating the statement information to a person who can also make a purchase decision or even influence a decision, it the perfect combination of objectives. However, it’s not just about print here either. The recipient is going to want to learn more so all of your other channels need to be integrated too. There is definitely opportunity here. Typically you will need a more complex front end software solution and production capabilities to go after this opportunity. When you are responsible for billing you’d better be sure it’s right and on-time or you are messing with your customer’s cash flow. As for the future, I’m a fan of electronic everything so as long as those trans-promos documents are delivered electronically I’m in. The jury is still out for the future of print in this area. Will people want paper bills in 20 years when the boomers are out of the mainstream? I’m not sure. I haven’t been inside a bank now in almost 7 years, would anybody have imagined that 20 years ago?

Waleed Ashoo, CEO of LithExcel USA, Chairman of the Digital Imaging Customer Exchange and PODi USA board member
Where do you see the future of digital print?
Digital print will continue to grow, but the growth will accelerate and move in the 50% annually.

What’s the uptake of variable data in the US? What‘s driving it? What’s holding it back?
There are a lot of misconceptions with regards to what constitutes variable data in the US market. We are also finding that while variable data helps increase response rates a bit, by it self is not enough to generate the expected returns. We must couple it with other touch points such as emails, QR codes, Purl’s and intelligent response mechanism. What drives VDP are good mined data and strong multi touch marketing plan. What ends up holding it back are budget restrictions, enough time to implement a program and the absence of data from the client.

How has the global financial crisis impacted on relevant digital print? Has it presented any opportunities for targeted marketing?
On the one hand it has slashed marketing budgets, eliminated entire marketing departments in the US and postponed or shelved any projects for 1 to 2 years. On the other hand it has put Communications Services Providers like my company, Lithexcel in first position ahead of expensive and ineffective other media.

If you were an offset printer today, how would you get into VDP? Is the emphasis on equipment or people?
I would first put together a 3-5 year strategic plan. Second, I would put together a team of people: digital graphic designer, IT or data person, web designer, marketing/business developer, mailing expert and a young electronic wise kid that understands how to use the various social networks. The emphasis is absolutely on people and software and not on equipment.

Can you name 5 key requirements for moving into VDP?

1. A strong and comprehensive strategic plan.
2. Developing a strong marketing/business development team.
3. Engage a smart and very effective consultant/coach to shorten the learning cycle.
4. Join industry groups like PODi, Digital Imaging Customer Exchange (which is part of Caslon and PODi now) and other industry peer groups to get training for you marketing/business development staff.
5. Focus your efforts on one or two vertical markets to start with and don’t attempt to tackle all markets at one time. You must develop expertise in a vertical market to successes.

What impact has online marketing and communications had on print in the USA? Are they seeing a swing back to print?
Online marketing and communication has devastated print in the USA. Print as we know it is continually evolving and will be supported by electronic media and the World Wide Web. We are not seeing a swing back to print in the USA; as a matter of fact we continue to see further deterioration.

Has there been growth in transpromo marketing in the USA?
Yes there has been growth in transpromo marketing, how ever its been very slow and will take some time to educate the marketing executives as to the benefits. As with the advent of the color VDP in the mid 90’s, there are a lot of misconceptions about transpromo marketing.