March 2009

Technology’s role in marketing relevance
Data is the driving factor behind intelligent DM methods. By: John Leonard

Today, technology permeates every corner of our lives; from our beloved Blackberry and Global Positioning devices to behind the scenes systems such as automated banking transactions, they all use data to do their job. Whether it’s stored, compiled, or modeled to project output, it’s all data-based.

Direct mail (DM) is no different. Taking existing data about what we know relating to a person and matching it to a product creates an opportunity, the core of which is the creation of relevant communication for the recipient. Direct mail began with simple capabilities (the level of relevance was limited to the basics, e.g., you were a hunter, fisherman or outdoors person so we sent you a hunting catalogue) and evolved to today’s more complex predictive modeling methods that are much more intelligent.

There are two primary reasons why these methods are more intelligent:

• First, they have to be. The number of messages received daily is growing, as marketers attempt to increase their share of our day. Messages must be relevant or recipients will simply “tune them out” as clutter.
• Second, because we can. Great strides have been made and marketers can now create intelligent and very relevant direct mail. Where the previous reason pertains to marketing and is strategic in nature, enhanced capability relates to the execution aspect of the industry. We’ll touch on some technology that allows marketers to create relevant direct mail.

We all appreciate that accurate data is the foundation for effective communication and technology continues to grow in this area. Even personal back-up drives reaching the terabyte (1,000 gigabytes) threshold became available in 2007. (Regardless of your age, think back to the hard drive volume of your first PC).

Data management and storage
Even at the lowest threshold, businesses must consider their exposure to privacy and confidentiality laws. The complexity surrounding the links within a relational database that make it effective is matched only by the technology that supports it.

Out of necessity, our parent company, Cover-All, takes an aggressive approach to technology and talks about three key elements: security, privacy and continuity when discussing clients’ IT requirements. These factors impact our ability to support a client’s robust data structure based on technology from redundant back-up power systems, automated data logging, data back-up and extraction, security, monitoring and hardware.

The analytical tools (and experience) that go hand in glove with this technology are the foundation of relevant communication. Creating a profile, which includes needs and wants, from the data is the first step. It’s no secret that the more detailed the profile, the more relevant one can make customer communications.

If we’ve established that the creative has been generated with the broad recipient audience in mind, let’s go beyond geodemographic marketing, which still has a solid place in some marketing plans, and say that our starting point for relevance is a person’s address. Placing an address on a mail piece makes it relevant to that “household.” Adding a person’s name to increase relevance is DM 101. The inclusion of data relating to past relationship (past purchase, donation or service) creates an even more pertinent environment. In many cases, this is the point at which marketers’ creativity is stymied. It needn’t be.

The next step is variable colour and this statement is “equipment based.” Who really cares about variable colour? It’s what you do with it that holds value in creating a material message and where the entire message—including images—can vary from one record to the next.

• Relevance can be subdivided into three general categories:
  Historical – something you already know about the individual to create relevance (information about their car, insurance policy value, past donation, etc.);
• Projected - something you can conclude about them (future value of life insurance, next service interval, wedding plans) based on what you already know; and
• Environmental – something you can generate as a relevant environment for this individual (images for urbanites or of the identical product the individual owns), family status (married, single, DINK), age appropriate images, etc.

This last point needs more attention than it gets today. The environment that’s created has a large impact on the relevance of a mail piece. Like positioning yourself when you’re delivering a message, it’s all about context, subtle context. Moreover, it’s what can increase the message’s relevance dramatically.
Variable colour is a tried and true method of creating more relevant communication. Yet, barriers, some of which relate to financial limitations and others to lack of data, still exist. However, every day people are coming up with new ways of deploying variable colour in a cost-effective manner. Options include multiple-up formats to take advantage of sheet sizes, and other very interesting formats that combine the financial benefits of static offset colour, with the marketing impact of digital variable colour. The key relates back to the data: knowing the recipient and generating an environment that is fitting to them and their perspective of the world or your product.

Building a relevant package
The next step is building a relevant package. Selective insertion has been around for some time, used extensively in statement applications and by a few marketing companies. The technology, driven by the proliferation of PCs, is now more available to the marketer that doesn’t have a million pieces each month but does have 80,000 four times per year. Based on an individual’s preferences, the equipment can be told to include or exclude a specific piece. An example from the statement world is the exclusion of a BRE in those packages where the recipient always pays online. If we take this operational example and apply it to the marketing discipline, we can accomplish things like varying a static brochure between “contents insurance” or “homeowner’s insurance” for an insurance mailing. Layer on top of this technology the opportunity to match two personalized pieces inside the envelope, or the envelope itself, and the package becomes even more relevant to the recipient.
Hypothetically, using today’s technology, you could create a financial service package that goes like this:

• A 6"X 9" window envelope with logo;
• Offset letterhead with black lasered address and text, customized based on the recipient’s current holdings and modeling their possible needs;
• A full colour variable brochure which shows their current holdings, possibly as a pie chart or bar-graph along with images and information that is relevant to their specific situation (income past contributions, projections, etc.) and possible added services; and
• One or two brochures – selected from a universe of say eight or ten that are the less expensive, offset printed format but provide the added detail of the information in the variable colour piece.

Except for the envelope, this entire package is intended to be relevant to the recipient. Everything they’ve received should be of interest to them if engineered properly.

What may be just as important is what they haven’t received – the mailer hasn’t included anything that’s extraneous. Although this is a minor detail in our minds, consider your situation when opening your mail. What if each piece in an envelope held some value and you weren’t tasked with navigating through clutter or worse yet, pushing it all back into the envelope and setting it all aside. Given our busy schedules, it’s possible that what’s not in the envelope is equally important as what is in it.
Is this package possible today? Absolutely, so long as the data exists to support the effort, which loops us back to the starting point: the data and those key elements of security, privacy and continuity.

In today’s economic climate, the demands on marketers to effectively communicate with clients and prospects are tremendous. While some requirements will be based on broader messages to bigger audiences with the use of economies of scale, others will necessitate scalpel sharpening methods to provide targets with a more relevant message using technology that may cost more per piece but can deliver better ROI.

John Leonard is VP Sales & Marketing at SMART DM. SMART DM is a division of Cover-All Computer Services, which offers clients data to mail and back to data services, including hosted IT in a dedicated facility in the GTA, data processing, Imaging, Mail Processing (both promotional and transactional) and Document Processing Services (scanning, indexing, archiving, e-Presentment). John can be reached at 416 354-4210 or at jleonard@smartdm.ca.