The big data opportunity for print service providers

We’ve always had data about our customers and prospects, but never before in history have we had so much data – so much, in fact, that it is often referred to as big data. In fact, many data experts report that 90 percent of the data existing today has been generated in just the last two years, largely due to the exponential growth of mobile computing, social media and online shopping. But are we using this data effectively? Not always. These days, consumers are riding the buying cycle, and they are picky about what type of information they consume. Marketers no longer control the message in the old push model because consumers have lots of places to get information, and they are only interested in information that is relevant to them personally, from a timing perspective, and in a medium that is convenient for them. Print service providers (PSP) have a key role to play in the transformation of customer communications to better meet these objectives, as practical examples, independent research and expert experience demonstrate. Right content, right timing, right medium Bonprix, a fashion retailer based in Germany that has more than 27 million customers in 26 countries and sales of about €1.3 billion (up 5.4 percent over the previous year), has altered the way it does catalogues to address this market shift, and with great results. Its printed product catalogues still play an important role in its marketing mix, contributing more than 30 percent of the company’s revenue. But the company wanted to better leverage its catalogues to increase direct response revenue and drive more traffic to both online and retail stores. As a result of a precision marketing workshop conducted by Ricoh Europe, Bonprix used variable data technology to produce personalised front and back catalogue covers featuring targeted offers based on customer profiles. The criteria used to determine these next best offers, or the next most likely offer a recipient would act upon, included the recipients’ purchasing history; whether they were new, active or lapsed customers; and their preferred purchasing channel. ‘The personalisation of a selected subset of our catalogue covers and the resulting relevant customer communication has led to a significant increase in response rates and to increased awareness for our products,’ said Barthel Roitzsch, head of sales at Bonprix (a member of the German Otto group). Bonprix also benefitted from higher customer satisfaction and better profiling of customers by taking advantage of Ricoh Precision Marketing expertise to ensure that its sales and marketing content is as relevant to each recipient as humanly possible. Research backs the facts In 2014, research firm InfoTrends conducted a study that included responses from hundreds of executives and decision makers from companies, with more than 100 employees, in France, Germany and the UK. The purpose of the research was to better understand marketing communications requirements in Western Europe. The outcome of the study supports Bonprix’ approach to more relevant customer communications, including continuing to use its printed catalogues. Findings include: •Print consumes the largest share of communications spending today (40 percent) and still will do so in two years’ time (36 percent); •Respondents believe that personalisation plus direct mail is a power combination; •Print or e-mail alone is less effective than when used with another channel. The research suggests that fewer channels (at least two) may be equally as effective as many channels. Print and another channel typically yield an 11 percent to 14 percent improvement in action rates that is, the customer actually purchasing something; •Respondents reported taking a targeted approach to customer communications and marketing efforts across multiple channels. Customer communications and marketing campaigns were relatively equally distributed across communications that were A) Personalised, B) Segmented and C) Mass communications; and •For those using personalisation in print, the majority were using high to medium complexity. Also in 2014, Ricoh commissioned a study by I.T. Strategies to better understand the transformation that print-based direct marketing was undergoing in both Western Europe and North America. In both regions, respondents reported that nearly two-thirds of the direct mail they produce is targeted at customer retention and loyalty programmes. While the overall volumes of direct mail are declining, the share of mail that is segmented and or personalised is climbing, a significant trend in both regions. A German marketing agency that participated in the study stated, ‘The role of printed communication is changing, not only is it becoming personalised for each recipient and only sent on request, but it is used for loyalty campaigns rather than acquisition for which e-mail is better suited and less costly.’ The trend in catalogues is also smaller, more targeted runs with lower page counts, making each edition more relevant to individual recipients. But how do you make these communications relevant, yet still affordable? Today’s technologies, including full-colour digital printing (toner and inkjet); and data capture, collection and analytics techniques are making it easier than ever before to not only collect data but to act upon it in a proactive manner. With 40 percent of European spending on marketing and other communications still going to print, print service providers are in a unique position to both educate marketers about the possibilities today’s technologies offer in delivering more relevant communications and to help them implement those communications — in both printed and digital form. While the term big data can be intimidating, many smaller to mid-sized companies are already taking steps to grow and better manage their data, and they are reaping the results. Big data doesn’t always have to be big but to the extent available data is analysed and utilised to generate relevant communications and develop more intimate customer relationships, those communications and relationships will be longer lasting and more profitable. If the print service provider partner doesn’t jump into the mix with this type of offering, someone else will. PSPs should keep in mind that as more digital natives enter the marketing and agency work force, there will be increasing pressure to move more communications to digital-only. That also means that PSPs must be able to clearly articulate how print fits into the new media mix and the specific value it adds. This challenge can be partially met by establishing stronger relationships with marketers and agencies and putting into place specific programmes to educate them on the value that print can add to their efforts and the new technologies that are changing the way print can be implemented. But you don’t have to go it alone PSPs don’t need to go it alone as they begin to work with their clients to deliver data-related services. Choosing a partner with the right resources and skill sets is an important step in the implementation process of these types of initiatives. Let’s take a look at the process employed by Ricoh Europe as an example of how print service providers don’t need to go it alone. The first step is a needs assessment workshop, such as the one conducted with Bonprix. It is designed to lead to a pilot exercise to test workshop outcomes. Ricoh professionals work hand in hand with print service providers in conducting this one-day workshop; Within two to three weeks following the workshop, a jointly developed executive summary of the findings and a concrete project proposal for a pilot programme are presented to the customer; and With the customer’s buy-in, Ricoh and print service provider personnel team design and execute the pilot programme with a goal of demonstrating results that justify a larger project. The bottom line •Data drives relevance; •Relevant and personalised communications drive results; and •Loyal customers typically spend more than first-time customers or customers that are not treated as individuals. Research and practical experience prove these truths to be self-evident. Take the next step: Bring these truths to your customers so they can reap the benefits and your business can continue to grow. Article by Jean Lloyd, director of Production Print Solutions at Ricoh SA