Advertising that fits the bill: in defense of transpromo
By Jenny Roper Friday, 13 July 2012
The transactional mail revolution, which once looked like a game-changer, never took off. Transpromo, though, is a great marketing tool that could make a big impact
When inkjet digital technology first hit the market 10 years ago, it seemed a new age of digital colour transactional mail was about to dawn. Those vast, ominous white spaces on your utility bills were surely soon to be replaced by colourful messages promoting a company’s ethical credentials, vouchers tailored to specific customers’ tastes and fetching adverts cross-selling another company’s products. The technology to print colour on transactional mail had arrived and so utilising this always-opened piece of mailing was surely a must.
But the transpromo revolution has not, in fact, quite taken off. While many bigger brands have certainly gone down this route, many others are still sending bills, statements and letters that look ostensibly the same as they did a decade ago, and are being printed in exactly the same way.
The reasons for this are mixed. Cost is a big factor, but so is client demand – and nervousness about what messages to put on a bill is also causing some reticence. The question for printers is whether this lack of transpromo action is going to continue, and whether they are in a position to take advantage if the reticence turns to demand.
At the most basic level, cost is the biggest cause of transpromo’s lack of traction. Given the economic instability of the past few years, the failure to fulfil the transactional potential is perhaps understandable. For the printer, getting into the transpromo colour market is not cheap, and any expense would have to be passed on to the client to get the return on investment. Getting into transpromo requires investment in sophisticated document composition software, dynamic finishing equipment and perhaps even in-house data analysis capabilities. The cost of that would be reflected in the price for the service, and those that have made the leap already say the clients, to an overwhelming degree, are not willing to pay that extra cost.
Multichannel marketing house MBA has been offering transpromo for five years, but reports that only 20% of customers have opted for it.
"We invested a lot of money to enable us to go full colour and it’s been a slow payback," admits sales director Kevin Stewart. "With regards to uptake, it’s a hard sell so I can see why a black and white mailing house might see making that investment as a bit of a risk at the moment."
Costs, of course, are not going to come down, but some say they shouldn’t have to. They argue that transpromo is an incredibly effective marketing tool with excellent ROI, and that customers must be convinced the costs are justified.
"To send a bill out is roughly 20p and to print it is roughly 2p," says GI Solutions sales director Patrick Headley. "So even if you end up putting 50% on the printing price, it’s a very small percentage of your pack’s total cost, and the ROI that the customer will get from enhancing their image or selling another service will more than pay for itself."
Unfortunately, Headley says that this argument will too often fall on deaf ears, as the printer’s client contact is not usually the marketing department, but one with a different set of aims. He explains that for transactional mail, the printer deals with the operations departments and they are preoccupied with what they see as their remit – getting accurate information out on time for the best price possible. Bills are a legality, not a bit of DM, after all. And so no matter how compelling the marketing angle printers convey, they are talking to the wrong people.
Route to market
So finding a route to the marketer is going to be essential for transpromo to take off. But engaging directly with a marketer, or ensuring that the operations team informs the marketing team of the opportunity available, is not always easy.
"One of the problems is engaging with marketers at the right time," says MBA’s Stewart. "Obviously, most transactional contracts are for three or five years and when they come up for renewal, you really need the ears of the marketers. But often the people in charge of transactional mail aren’t engaging with this other team."
Headley agrees, saying companies tend to work in ‘silos’ with little communication between them.
That said, Headley and others are finally making a breakthrough and getting those conversations started – be it through wily skills or sheer persistence. But even though the marketer may now be listening, it is not just cost that will be a consideration and has been a turn off. Transpromo is a complicated beast and reluctance also comes from the ‘why’ and ‘what’ of the messages.
Headley, of course, gives a compelling argument: transactional documents have much higher open and read rates than any other form of communication, so if a brand wants a customer to read something there is a better than fare chance that customer will see it.
The question then is: what do you want the client to see? Well, there are number of options. A popular one at the birth of the concept was for businesses to make money, covering the cost of the printing with perhaps a little extra, selling the transactional mail space to third parties. That, however, has not come to fruition.
"Third-party advertising is a no-brainer to me, as a printer, because if you can send out bills and get someone else to pay for this then that’s a huge cost saving," says Headley. "But people have big reservations about brand integrity, so no one does third-party advertising with us yet. It’s a stage too far for the UK at the moment."
"I’m seeing no appetite for third-party," agrees Opus Trust Marketing chief executive Linda Scott. "I tend to find customers view their transactional mail white space almost as their real estate, and they don’t want to give that away frivolously. What they’re more interested in is protecting their brand and building a relationship with the customer."
It’s easy to see why a brand would be nervous about selling ad space to a third party, as doing so would essentially be a recommendation from the company for that advertiser. That creates huge potential issues in terms of PR and associations, and so presents real danger for both brand value and customer relationships.
A more clear-cut use of the space would be self-promotion, yet there are issues here too. Preserving white space to keep the financial information in documents clear and easy to understand is of utmost importance to many companies. There are also strict regulations regarding the use of any form of messaging on transactional documents to be taken into consideration.
"Some regulators like Ofcom are saying they don’t want to see advertising messages. They don’t want to distract from the purpose of the statement– to inform," says Scott. "You can’t argue with that."
While these drawbacks of the ‘what’ in transpromo may seem a negative against the sector, it could actually represent an opportunity for printers to lend a hand. Added value in the modern print industry relies as much on customer service as it does products. Turning yourself into an indispensable guide through the world of transpromo could prove a real customer winner.
Adar sales director Martyn Viquerat certainly thinks so. "Businesses can be confused about what is and what isn’t allowed, with the result that they just veto any kind of transpromo messaging," he explains. "But we can help customers get round that problem by clarifying the rules for them."
Printers can also take a lead role in demonstrating not just what, but how, to seize the opportunity, clarifying what the opportunity actually is and what the printer is capable of. This would involve highlighting how a sophisticated document composition software package that can work with variables (such as the number of pages within a document and the spending habits of a customer) to incorporate messages into the printed page in an eye-catching yet unobtrusive way.
Opus’ Scott says printers can also show that messages don’t have to aggressively promote another service – the relationship with the customer can be improved by helpful hints relevant to the transactional document.
"We’re seeing interest in relevant messaging to improve customer service – messages like how to reduce water and energy usage," says Scott, explaining that more and more customers are also coming round to the idea of using lots of different colours on bills to break them down clearly. "It’s about brand enhancement, better engagement with customers, and clarity of the documentation and any call to actions. And then it’s about using any white space areas for information and service enhancement."
Indeed, it is a more subtle re-engineering of documents that is beginning to gain serious traction with UK businesses, says Graham Moore, director of production printing business at Ricoh, the company behind Infoprint transpromo systems.
"Transpromo applications of the type predicted in the early stages of the market’s development are still in existence," he says. "But soon after the early stages of adoption, the application very quickly evolved into something else. Beyond filling white space with a marketing message, it became more about wholesale re-engineering of transactional documents in line with improving customer experience."
It may be that transpromo-aware marketers still believe it to be stuck in the old guise and it is the printer’s role here to highlight this new, more subtle version of the medium. The argument from those in the market already goes that as more printers make headway in getting at the marketers, dispelling cost myths and highlighting benefits through close account management, transpromo work will become a more commonplace sight. A landslide effect, it is hoped, will be created.
"I think there are so many people now who are on the cusp of doing their transactional mail in digital colour," says GI’s Headley. "I honestly believe within the next two years we will see a lot of people having swapped to it. We will start to see real transpromo in the UK space."
If true, this will be making those transactional mail printers that have thus far not invested in upgrading their mono laser systems feel slightly nervous. If the market does go the way of colour transpromo, they may well find they are left behind.
However, some would point to an overall climate of falling bill and statement mail volumes as a reason for caution where investment in new transactional mail kit is concerned.
"The reality is, if I’m a traditional printer and I’ve invested in laser equipment, I’m now in the business of sweating my assets and I’m facing a declining market," says DST Output strategy director Malcolm Webb. "The spectre of ‘e’ is coming towards us and has caused serious watersheds in certain sectors. If I was a mono printer, I don’t know if I would want to invest knowing I’ve got a short amount of time and opportunity to make my money back."
That spectre is not a universal one, though, he clarifies. He says that while some sectors such as telecoms will be switching to online billing "quickly and aggressively", there is room in others to carry on providing transactional print well into the future in others. You just have to take an educated guess at which that might be – which is, of course, the million-dollar question.
If a printer can demonstrate good returns using transpromo, this bolsters the case for the printed medium and makes any investment more secure. Pitney Bowes product marketing manager Simon Illingworth says that by offering transpromo mailing, printers might also insulate themselves from the threat of falling mail volumes overall by gaining more types of business from the same client.
"If they prove themselves capable of marketing a company subtly but effectively through transactional mail, it may well be that a printer acquires some of the marketing side of the business where traditionally they’ve only done the transactional side," he says.
This is a very real opportunity for transactional printers, he says, because of the skills that these printers possess. "The thing with a direct mail print run is it has more in common with transactional applications than marketing applications – because what you’re doing is a smart, targeted and focused print run," he says. "So while it might be powering a campaign that is – in its true sense – a marketing concept, it is implemented like a transactional job."
A great opportunity
Suddenly, then, transpromo becomes a great opportunity not just for the client, but also for the transactional mail printer. With more and more bills switching to online, a route into other markets seems a sensible way of complementing the stable areas of the transactional market.
But all of this is theoretical at present. For every printer who tells you the transpromo revolution is finally just around the corner, another will tell you that there is little proof of that headway being made – certainly not enough to justify an investment on the scale needed to do transpromo properly.
In many ways, then, there is a stalemate. There are not enough people wanting transpromo to make investments viable, but there is also a lack of printers who have invested, who are pushing transpromo to create and force the demand.
As ever with print, a ‘wait and see’ approach is dominating among the majority in this sector. And until more take the plunge, it will no doubt be impossible to make a real judgement as to whether transpromo is a pipedream, or the potential saviour of transactional mail
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