Profitable Partnering on the Direct Mail Chain
Having worked in the direct marketing industry for many years as both mailer and supplier, I've had the opportunity to observe the benefits and pitfalls of using a single source of supply for all services surrounding a promotional mailing. When evaluating data processing, print and lettershop production services from the viewpoint of "putting all eggs in one basket," the case can be argued either way. Most mailers will express their preferences based on their individual experiences.
I am convinced that each supplier has a specific expertise and should be relied upon to provide exactly that. Another observation on outsourcing: Today's complex mailing programs require the support and knowledge of experienced, well-trained data processing professionals. Such resources are a standard at service bureaus and are often available at printers.
The discussion in favor of a single source for all services usually centers on time and cost savings. Let me discuss these factors and explain why in my opinion supply chain partnering is what ensures successful mailing campaigns in today's marketplace.
Time. Until recently, the time that elapsed for shipping data on tapes from one processing center to another was a significant factor in the overall production schedule. Today, thanks to the speeds of electronic data transfer, shipping no longer creates a time problem.
Further, I've had many opportunities to review production schedules from concept to copy and design, processing and entry into the mail stream. Most often, these end up as a negotiating session, in which each discipline makes the case for more time than the schedule allows -- just ask the copywriter, DP manager or operator of the lettershop equipment. In reality, however, each party of the supply chain does not need the extra day built into their schedule for contingencies.
In the traditional processing flow, the service bureau performed the merge/purge and applied the file hygiene to ensure mail deliverability and the mailing's compliance with postal regulations. In many cases, it also converted file outputs to print image tapes, used, for example, for print production of personalized messages. Moving some or all of these functions to the printer was a natural response to the need for faster turnaround in the event of last-minute changes. Again, with the advent of new technologies, data transfer between suppliers has become a matter of seconds.
If the time element has lost its impact, what else can we do to ensure the efficiency of direct mail campaigns? More than ever before, the key to make back-end direct mail processing a success for all, is to review the project prior to its start. All parties need to understand the complexity of the processing, print and production requirements: The data processor must know the format of the final mail piece and the personalization requirements associated with the offer.
Only with this knowledge at hand, can he be certain that the final output data is available in the correct format. The creative group needs to know what information is available on the file for personalization and segmentation so that copy and design can make maximum use of these elements. Equally important, the service bureau should provide a test tape to the printer to ensure that the tape can be read on their equipment and -- as simple as it may sound -- that the required information is really present.
Should the time factor become a concern despite the latest technologies in data transfer and processing, service bureaus can assist the mailer or its partners in the supply chain to make up for lost time with additional machine and people resources. Most of them operate at least two shifts, six days a week, allowing for extra time when the need arises. In addition to fast turnaround, they offer flexibility via multi-platform processing, whether it's mainframe, PC-based, client-server, a combination thereof or soon to come Web-enabled.
Cost. A number of years ago, printers began to offer data processing services to their customers using off-the-shelf software. This was done to provide mailers with shorter production cycles and minimum costs. Many offered name and address processing as a loss leader maintaining their profit levels on the printing side of the business. Depending on the size and expertise of the organization, some provided customized solutions or expanded postal processing to include other value-added services.
Lowering costs for a specific process doesn't always result in an increase in the bottom line. Today's advances in database marketing demand the sophisticated support of full-time data processing specialists. Even the seemingly straight-forward merge/purge has become quite complex. For example, today's merge/purge software programs apply a different logic for business records than for consumer records and can customize virtually every single job to meet the mailer's specific requirements.
Recognizing the complexities of technology-driven direct marketing, most printers continue to offer postal processing but limit their offerings of other data processing services. Now, they provide full service to their clients through a win-win partnership with an experienced data processor. This benefits the mailer with fast turnaround and state-of-the art processing at reasonable cost. Partnering, advances in matching technology, data transfer and committed volumes have replaced the do-it-yourself methodology and created a profitable relationship for all.
Whatever your perspective may be, you should recognize that each supplier of the direct mail chain has a specific expertise and can make a significant contribution to the mailing's success. This statement holds true, whether success is measured by new customers/members, new orders or catalogs delivered. Everyone benefits when you select the best source to supply its expertise for each part of the mail campaign.
Data Processing Tips:
* Provide complete clear written instructions.
* Use data hygiene services to improve match rates and deliverability.
* In business-to-business processing, allow for multiple zip codes in your match process.
* Abide by penetration and flighting mail rules when mailing business-to-business.
* Do not use consumer logic for BTB.
* Test - Test - Test: Look at results, not percentages.
* Clearly define the consolidation and duplicate rules.
* Look at both dupe sets and complete ZIP dumps to see matched and unmatched.
* Set realistic timing expectations.
* Use the DMA MPS suppress for privacy compliance.
Joe Balaban is vice president of business development for Anchor Computer Inc., a provider of data-processing services and software products to the direct marketing industry. His e-mail address is email@example.com.