Full-color digital print delivers strong ROI
Today's digital color presses produce print quality that's nearly indistinguishable from offset and that regularly contributes to better business results than traditional campaigns. Some recent direct marketing campaigns and controlled tests have shown how digital printing - and personalization that creates more relevant pieces - improves return on investment and response rates.
The digital advantage is multi-dimensional. Full-color personalization boosts response rates by as much as 500 percent compared with static monochrome, a study by Romano/Broudy found. Blending mail and the Internet, a particular strength of integration-friendly digital printing, increases online spending 16 percent, according to the U.S. Postal Service. And low-cost short runs deliver advantages including economical concept testing and fast turnarounds to respond to changing market conditions.
The industry is embracing the approach. Print providers overwhelmingly cite variable-content digital printing as the service they expect to grow the fastest in the next two years, according to NAPL. The percentage of creative professionals who specify, recommend, approve or buy digital printing has tripled in four years to 72 percent, according to a 2006 Graphic Design: USA readership survey. And digital color printing's surge is a driver of the ongoing growth in direct mail spending in this decade, most recently an estimated 7.5 percent growth in 2005 to $59 billion, according to the Winterberry Group.
Definitive ROI advantage. To demonstrate digital printing's ROI advantage and the creative opportunity for marketers, Xerox Canada joined with one-to-one marketing software provider Exstream Software Inc. and data specialists Terminal Van Gogh in 2004 to establish the Xerox 1:1 Lab.
The lab invites print providers and their clients to run controlled tests of their traditional campaign and compare results with those of more personalized approaches developed by the lab. Among the first to sign on was Tourism British Columbia, which markets the province's $9.5 billion tourism industry.
"We thought we were doing OK," said Joel Tkach, marketing manager of consumer programs for North America at Tourism BC. "But we knew there was an opportunity to be more precise with the information we were delivering if we could learn more about our consumers."
The company ran a test on its BC Escapes marketing campaign, which aimed to capitalize on a trend among consumers to augment traditional vacations with short getaways. In the traditional campaign, people requesting catalogs answered three questions: length of stay, primary activity and where they come from. Respondents received two guides totaling 112 pages. It was costly to produce and mail.
The Xerox 1:1 Lab approach collected more data - age, precise destination, primary activity, price range for overnight accommodations and time of year for the travel - to create a 24-page, personalized guide. For example, covers featured the respondent's name, an image of their chosen destination and a relevant message.
The one-to-one piece generated 25 percent greater ROI than the control piece. Savings included lower costs for paper, warehousing, fulfillment and mailing. Tourism BC also values the relevant consumer data it collected for better targeting future communications. The program delivered what Tourism BC sought: a better way to manage print without compromising results.
Boosting vet business, pet health. Among the companies realizing similar successes is Veterinary Metrics Inc., a marketing consultant firm specializing in customer relationship management programs for veterinary practices. Veterinary practices tend to make minimal use of marketing, which can educate pet owners on the range of services to improve pet health. The average practice spends 0.5 percent of annual revenue on marketing compared with 3 percent to 5 percent in human health-care organizations.
Working with marketing partners and its print partner, NCP Solutions, Veterinary Metrics developed a two-component mailer that is a core direct marketing product for its clients' CRM programs. The personalized piece recommends specific care and treatment for pets based upon patient data, current promotions and routinely conducted services.
It includes a personalized letter, discount coupons with relevant offers based on the pet's history, and a call to action - generally to book an appointment. To encourage recipients to open the envelope, the packaging includes the message, "Important Health Information for <pet name>" and a relevant image.
The program succeeded by many measures:
* Clients' ROI averages $18 to $20 per dollar spent, versus an industry average of $11.49, according to the Direct Marketing Association.
* The average client generates $1.1 million in annual revenue, 30 percent higher than the U.S. average of $750,000 to $800,000.
* Clients realize 23 percent of potential annual revenue on average, compared with 18 percent among the general veterinary population. More than ever, digital color printing is painting a pretty picture, aesthetically and financially.