In the first Industry Insight in this series, I looked at the overall promise of transpromo (which stands for transactional/promotional, or the practice of, in some cases, redesigning existing customer communication to include customised promotional graphics and messages).
This communication, such as statements and invoices, represents a sunk cost - an unavoidable one - and as such the possible incremental cost of an additional page or two for customised, or even one-to-one communication, is negligible.
But, if done correctly, it can produce the highest rates of return yet seen in the direct marketing sector.
If not, why not?
The first step with transpromo is deciding why a company wants to do it. The purpose of the campaign being run will determine all subsequent actions. Examples of campaigns that can be run with transpromo include product offers, gap analysis, product acquisition propensity, contingent opportunities, time/season, events, personal triggers, value-based segmentation, clustering, customer churn/dormancy and up-selling and cross-selling.
Then one of the most important and persistent hurdles in transpromo needs to be overcome: and that is bridging the traditional tension between IT and marketing. With transpromo, this tension manifests in disagreement between the billing/IT division, which does not want marketing to gain access to billing data. But without access to this billing data, transpromo cannot get out of the starting blocks.
In addition, there is the question of whose budget gets allocated to transpromo: marketing or IT?
In my experience, marketing needs to begin operating across all silos in the business if it aims to be successful in retaining and growing its customer and using the extensive information it has on customers to better use.
Customer experience
This tension highlights the fact that companies should consider the appointment of a chief customer officer, someone who can pull together the various threads that make up the customer experience and drive the actions that will enhance share of wallet. Such a person would (or should) have a broad range of responsibilities, and would be able to cut across internal politics to ensure customers come first, and the organisation can fulfil the brand promise.
The next step is to choose a control group from the customer information. This group can allow a proof of concept to be performed, but under tightly controlled conditions, including close monitoring of results obtained against expectations.
This control group and the results obtained will give a pointer as to the success that can be anticipated when extrapolating the exercise across a broader sampling of customers.
Three partners are needed in this exercise:
* A dedicated direct marketing specialist, which has deep experience and the infrastructure to take large amounts of customer data through data mining, plus detailed analysis of information in a company's CRM database so as to assess current and potential lifetime value.
* A dedicated mailing services and data printing specialist, which has invested sufficiently in new-generation printing technologies and has the experience required to combine mined data with highly customised, even personalised, communications.
* A design company, which can put together attractive, impactful communication campaigns. They do not have to be in full colour: black-and-white communication and single-colour communication has also been shown to be impactful. However, using full colour in documents has been proven to increase response rates by 500%, particularly when using relevant, one-to-one customer information, thus maximising return on investment. Full-colour digital printing for high-volume applications and at reasonable costs will only be available late next year.
One of the most important and persistent hurdles in transpromo needs to be overcome: and that is bridging the traditional tension between IT and marketing.
Konni Hoferichter is MD of Bytes Technology Group company LaserCom.
As it is time-consuming to work with three service providers, I recommend working with a lead consultancy, which can pull all the threads together and take overall responsibility for delivering the transpromo solution.
Finally, the channels to be used and the call to action need to be investigated: for without this call to action there is no causal link between transpromo and customer response.
One of a number of channels can be used, but all are designed to elicit the most appropriate response.
As an example, a customised communication could be designed to drive the recipient to a Web site, where there is a PURL (personalised URL, or Web address). This would take the recipient to a Web site in order to initiate the next action in an interactive marketing campaign, such as winning a prize in return for accurate self-service customer information, or accepting an invitation to an event.
* In the next Industry Insight in this series, I will look at how to begin with transpromo.
* Konni Hoferichter is MD of Bytes Technology Group company LaserCom.
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