Transcontinental Direct melds marketing, mail models

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Leading direct marketing services provider Transcontinental Direct, Warminster, PA, offers direct mail services, fulfillment services, postal optimization, database marketing and analytics, and business continuity and recovery services.

The company has grown in the past few years via acquisitions. In December 2003, Canada-based Transcontinental Inc. acquired direct marketing firm CC3 and renamed it Transcontinental Direct. In February 2005, Transcontinental Direct acquired the operating assets of JDM Inc., one of North America's premier direct mail firms.

Rob Young, president of Transcontinental Direct's U.S. operations, joined the company in December 2005. He previously was president for commercial envelope at Cenveo Inc. (formerly Mail-Well Inc.), where he was responsible for 15 U.S. envelope locations with annual sales of $375 million. Mr. Young discussed his past year as well as issues in printing and mailing with DM News deputy editor
Melissa Campanelli.

DM News: It's been a year since coming on board leading Transcontinental's U.S. direct marketing activities. What are you most proud of in terms of accomplishments?

Rob Young: I think our greatest accomplishment has been the continuing melding of the best of both cultures and business models. We have grown by acquisition - CC3 in the end of 2003 and JDM in the beginning of 2005 - and you are looking at two different business cultures. CC3 was largely a market- and sales-driven organization focused on multichannel marketing, and JDM was a high-volume acquisition direct mail operation with strong production methodologies and philosophies.

So you kind of pull those together and it's an interesting dynamic. ... We've spent a fair amount of time figuring out how we align these businesses, how they are complementary and, having said that, how do we go execute against it. I think the message that we are now a market-driven organization has been received loud and clear and embraced by our employees.

How is the commercial printing and marketing services industry changing? How is Transcontinental changing with it?

It's an interesting continuum. We straddle the commercial printing and the value-added marketing services worlds. I don't look at us in the United States as being in the commercial print business, because we are not. We are in the direct marketing business. In North America, yes we are, but even in that context, we are highly specialized in our print capability.

So even if you talk just about marketing services, we are straddling that continuum - because, let's face it, lettershops are perceived as a commodity - but we also can provide different sets of values to customers ... There is a set of givens in this business: You have to be market competitive, you have to have a level of quality consistent with the market and you have to have a service level that goes above and beyond.

How is Transcontinental preparing mailers for the expected rate increase in May?
We are trying to be as ahead of the curve as we can be in terms of understanding what the rate case means, understanding what the architecture means and also understanding what the delivery point validation implications are further down the road, because that is very big as well. [The U.S. Postal Service has said that starting in August, mail pieces will receive CASS-related discounts only when the agency's delivery point validation process confirms the primary number - or the first line - of the addresses.] We are helping our customer base in terms of general education as well as their specific situations.

Do you think the rate case will affect your business positively or negatively?
It depends on the particular marketer. Some mailers may mail less, and some may mail more efficiently. ... You might see interesting developments along the creative end of things, which are less dependent upon format and may be more dependent on more effective use of color and variable color, for example. That is an opportunity for us, or at least a positive development, because that's where we can bring our pedigree as a printer to really help our customers, and also we have creative capabilities through our pre-media operations.

What are challenges, opportunities and threats your company may face in 2007?
I think [the postal world] will be the defining issue for the year. I think the state of the business is overall quite healthy. It tapered off a little last year in certain sectors, and I think there is still concern around some marketers relevant to response rates and how do we maintain those. But from Transcontinental Direct's view, we have gone a long way toward stabilizing the manufacturing platform post-acquisition - and defining it - and now our intent is to go hard at the market to tell them why we are different and why they should do business with us.

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