The Noodle

The Return of VDP

Mailings are getting personal with variable data printing.

Have you taken a good look at your mail lately? Perhaps you have noticed that you receive far less mail addressed to occupant or resident these days. Instead your name is boldly printed on the front, often in color. Whole catalogs are now customized to highlight the items that you are likely to be most interested in. Your dentist sends you a personalized checkup reminder card and a birthday card.

And even statements and bills are becoming more attractive, taking on a friendlier, more personal tone, and offering special enticements and incentives.

If you are feeling a little more special, you are not alone. Increasingly businesses are utilizing variable data printing (VDP) to customize their communications and gain the attention of their intended recipient. Photos and graphics based on gender, geographic residence, buying preference, market trends, age, and other variables have a tremendous impact on consumer interest. And this type of targeted marketing using digital print is frequently replacing generic mass marketing.

VDP Triggers

But does it really work? “I’ve heard that using VDP can increase response rates from 2-3 percent to 10-15 percent. Now, that’s substantial,” says Elaine Fogel, president and CMO of Solutions Marketing & Consulting LLC. “An increase in performance will also depend on what type of VDP campaign marketers use. Adding the recipient’s name in just a few key places, adds a personal touch that can keep the reader interested. But there can be even greater results when marketers use versioning, and the customization level is segmented ac- cording to the audience.”

In fact, the benefits are measurable: larger sales, higher returns and greater customer loyalty. Marketing studies repeatedly show that personalizing communications can boost their effectiveness. “There’s a marked increase in the performance of companies who went from mass marketing to target marketing through VPD campaigns,” affirms Sandra Zoratti, vice president of Marketing at Ricoh Production Print Solutions. “And we’ve discovered and documented that there is a direct correlation between the extent of the customization and the effectiveness of the communication.”

According to the research from Ricoh, color, design and content relevance are the customization elements that determine VDP return on investment. “When it comes to precision marketing, there are levers which trigger correlated results. Strategically using color, instead of black-and-white, will generally achieve ROI in the two-digit range. Strategic use of color and design—including relevant photos, icons, formats and promotions—will yield results in the three-digit range. And the optimal use of color, design and relevant content can give you a four-digit return,” explains Zoratti.

Better Data, Better Results

One of the key requirements for a successful campaign is to start out with good data. Fogel emphasizes that even though you utilize color, quality design and relevant content, your targeted message will miss its mark if the initial data isn’t accurate. “Without accurate data, it can be a big waste of time and money.”

Zoratti says people seem to be paralyzed by their fear of managing the data. “They aren’t sure how to use and leverage data. We emphasize that it’s not a flip of the switch; it’s a multi-step journey, and you have to be com- mitted to the journey. They are afraid to take the first step, but as they continue on the journey, they can collect new data that will then make their next communication even more relevant and therefore more effective.”

Customer Retention using VDP

Managing data doesn’t have to be complicated. One easy and effective way to get started is by utilizing your current customer data. Every marketer knows that it is more cost effective to retain a customer than to acquire a new one. In their often quoted article in the Harvard Business Review, management consultants Frederick Reichheld and Earl Sasser estimated that “companies can boost profits by almost 100 percent by retaining just five percent more of their customers,” whether you are a small local company or a large nationwide hotel chain.

But, according to the recent Routes to Revenue study by the CMO Council sponsored by Ricoh, 76 percent of senior marketers believe they are not realizing the full revenue potential of their current customers. In addition, only 46.5 percent say they have good insights into retention rates, customer profitability and life- time value. Marketers under pressure to reduce budget are finding that targeting current and recent customers with simple VDP campaigns can lead to greater insight, increased customer loyalty, and ultimately more revenue.

A regional office of the American Red Cross needed insight regarding why they were losing business. “We sent out a personalized postcard to a targeted list of past customers. The post- card had several areas that were personalized with the prospect’s name, attractive graphics and a call-to-action to visit a personalized URL (PURL) where they were asked to complete a brief survey,” explains Susan Elder, CMO of the American Red Cross of Greater Cleveland. With the significant response from this small campaign (18 percent click/finish) they were able to determine the reason they were losing customers and create a data base of customers who wanted to be contacted about upcoming Red Cross training.

VDP with TransPromo

On a much larger scale, Best Western International, the world’s largest hotel chain, turned to Ricoh for insight into their inactive customer base. The challenge was to reactivate dormant customers who have not done business with the brand in one year. The team quickly began to work and analyze the hotel’s database in or- der to understand how existing, active customers respond to current and past offers.

By implementing a TransPromo Pilot program created by Ricoh, they successfully grew awareness for their own branded credit card and increased revenues through incremental bookings. TransPromo is a pioneering technique that combines transactional data with promotional information to provide more targeted marketing on trusted documents such as statements. It is an easy way to reach out to customers in a personal way without having to make a huge investment in new promotional campaigns or materials.

The scheme replaced inserts, previously included with the program statement, with personalized and targeted promotions on quarterly rewards statements, sent to a segment of Best Western Gold Crown Club International reward card customers in North America.

Applications for the Best Western credit card among the guests receiving the TransPromo statement were boosted by 500 percent and 15 percent more of these guests registered for the “More Rewards, Faster” scheme than those in the control group. More than one third (39 percent) of that group then went on to stay in a Best Western location after signing up for the promotion, stayed a longer duration than the control group, and generated 30 percent more in incremental revenue during their stay.

In less than eight weeks, Ricoh delivered an ROI of
1090 percent. These stunning results validated Ricoh’s
model to deliver tremendous results for hotels looking
to reactivate dormant customers in order to drive rev
enue. “The success of this pilot during one of the toughest economic times in many years, and the benefits of
 TransPromo are more than clear for any marketer looking to drive value and revenue from existing customer communications.” affirms Lee Gallagher, director, Precision Marketing & Enablement, Ricoh Production Print Solutions.

Lead Nurturing with VDP

In much the same way, marketing professionals are finding that VDP is a valuable tool for lead nurturing as well as lead generation. Using VDP in tandem with innovative software, marketers can automatically personalize their message to their prospects, and deliver custom content to them that is engaging and relevant—the proverbial right message to the right person at the right time and in the right way. Over time, the message and the content become even more right and relevant as marketers collect more data while moving the prospect through the sales pipeline.

“Lead nurturing is basically content marketing—providing relevant, informative content to prospects long before they become customers. This allows marketers to develop relationships with prospects, engaging them with valuable content they can use. The longer prospects stay engaged and subscribed, the better chance marketers have to gain brand trust,” explains Fogel.

Marketing professionals are finding that VDP is a valuable tool for lead nurturing as well as lead generation.

“When these prospects do enter the buying cycle, the ideal situation is that they will consider the company’s products/services because it has been top-of-mind for the length of the nurturing period.”

Personalization here to stay?

Marketing, using VDP and other technology, that digitally mimics the more personal way people did business 60 years ago rather than the mass marketing that later ensued is a growing trend. Likewise, there is much discussion about engaging clients on a human level, and much effort going into blogs, tweets and other media that fosters a more personal relationship. Zoratti says that she thinks this trend will endure. “The more personal, the more relevant, and relevance is more important than ever.”

Fogel concurs.” I believe that it will have endurance. Most people’s egos appreciate being the center of the universe, even if temporarily. Marketing messages directed to the individual, targeted to that individual’s needs, wants, and interests, get closer to talking with that individual in person than ever before. Of course, engagement cannot be accomplished overnight. It takes a genuine effort on everyone’s part in a company or organization. Every time a prospect or customer calls on the telephone is an opportunity for engagement on a human level. Being personal and friendly goes a long way in brand building. This really needs to become part of any corporate culture in order for it to be consistent and genuine.”

By Lorrie Bryan