Consolidated sees growth from customized mail strategy
Imagine coming out of a meeting with a potential new client, turning on your BlackBerry and placing an order for a personalized direct mail piece for the same contact that will be channeled to the closest digital printing location and placed in the mail within 24 hours.
This technology is already in place for some of Consolidated Graphics Inc.'s clients and will be rolled out for others this year. It is an example of how the commercial printer is pushing the limits on the digital side of direct mail and printing.
TiVo, satellite radio and YouTube, among other developments, have created a desire among consumers for "more personalized information on demand," according to Aaron Grohs, executive vice president of sales and marketing at Consolidated, Houston, TX.
"I believe this helps printers and marketers because the mailbox is still a place that is not as easy to censor," Mr. Grohs said.
The trick is for printers and marketers to come up with ways to cut through the clutter and get noticed.
Consolidated believes it is in a position to help many marketers - and even the 2008 presidential candidates - grab people's attention with a unique infrastructure it has built over the past several years.
The printer owns 50 companies around the country that have digital presses, many of which are strategically located near bulk-mailing facilities.
As a result, Consolidated can push out digital campaigns from a centralized database and channel the information to the best printer for the job. The "best" could mean one that is geographically preferable, enabling marketers to get into mailboxes faster and less expensively.
Since Consolidated's fleet of digital printers includes Kodak NexPress, Xerox iGen3 and HP Indigo, the best could also mean channeling a job to the printer that meets its technological requirements better than others.
"Our ability to tie together [this technology] and make it work is truly our differentiation," Mr. Grohs said.
It all started several years ago when Consolidated put together an acquisition team and began buying a series of regional commercial printers, many with their own digital presses.
In the past 30 months, Consolidated has acquired 12 printing businesses including; The Hennegan Co., Florence, KY; Nies/Artcraft Printing Companies, St. Louis and Annan & Bird Lithographers, located near Toronto.
It currently operates over 100 high-capacity digital presses and a large sheet-fed printing business, owns more than 70 printing facilities, 12 fulfillment depots and two technology centers across 27 states.
In a conference call with analysts about its year-end results last month, Consolidated executives said the number of companies with which it is negotiating for future acquisitions continues to grow.
Consolidated has the capital to make more deals, and many regional, privately-owned printers are looking for an exit strategy, according to Consolidated. And making a deal with Consolidated is appealing because the company has earned a reputation for maintaining the original name and management of any printer it acquires as it helps to build the business.
Of course, a fleet of digital presses is only of limited use if it is not integrated. Enter CGX Solutions, which provides customers online access to a suite of digital services and communications solutions, thereby bridging the databases of Consolidated's customers to the company's digital presses.
For Consolidated's year ended March 31, CGX Solutions grew 35 percent and, for its most recent fourth quarter, the division represented 4.1 percent of the company's total sales.
In the most recent fiscal year, Consolidated's overall sales topped the billion-dollar mark for the first time, growing 14 percent to $1.01 billion.
Because of its integrated service, Consolidated won a job from a company that manages standardized testing for children. In the past, parents would usually receive a black-and-white results mailing with a limited amount of variable information after their child took a test.
Consolidated, however, produced a four-color piece with charts and graphs comparing the results of the recipient's child with those of other children in the same class, across their state and on a national level.
Because it was a state-mandated product, Consolidated had just 10 days from the time it received the data to when all five million of the 8.5-by-11-inch results packages had to be in the mail.
Another area of potential growth for Consolidated is the automobile industry. Still, most of the growth for the Consolidated model is expected to come from the financial and insurance sectors, Mr. Grohs said.
Integrating the printer's technology with mobile devices, already in place for financial customers, may end up costing the client more per sale.
But companies dealing with potentially high-value sales may find the extra cost to be worth it because of the personalized nature of the campaigns and their quick turnaround. As a result, the return on sales can be significantly higher.
Consolidated will usually take in all such orders over the course of a day and then transmit them in bundles to the appropriate digital presses.
Franchises are another area where Mr. Grohs sees a lot of opportunity.
"Our model fits the franchise business very well because it gives the franchisor a lot of protection and the franchisee a lot of flexibility," he said.
He said Consolidated can provide these benefits more efficiently than some other digital printers because of its national footprint.
Canvassing for mail
One of the more interesting applications of the model is in the political arena, which is "very big and important to Consolidated Graphics," Mr. Grohs said.
The company wants to be the exclusive printer for some of the 2008 presidential candidates, who are expected to spend heavily across a variety of channels to get their messages out and raise funds.
In fact, the company has already received phone calls from a number of political fundraising groups representing several candidates who are interested in the company's national footprint and integrated approach, Mr. Grohs said.
While it is nothing new to send out a personalized direct mail piece to a targeted group of people and direct them to a Web site to become more engaged, it is important to recognize that four years ago, when the last presidential race was gearing up, this technology was rather new and had been tried out in only limited ways.
Not so now.
"The equipment is better; the technology is better; the clients are more used to it; and they understand it better," Mr. Grohs said.