If you’re into direct marketing (DM), data is your Alpha and Omega; it determines the who, where, why and what of everything that happens. It is omnipotent and, as a DM printer, if you haven’t realised this yet, you’re in trouble – data is god.
This is because, increasingly, the printer’s role in the world of data is growing more fundamental than just doing a bit of cleansing. No longer merely an adherant, print is beginning to create the doctrine. Marketing lists, the segmentation, interpretation, profiling and analysis of data – all these things are beginning to fall within the printer’s remit. The costs are high and the pitfalls deep, but ignoring the new religion is increasingly looking to not be an option. Fortunately, according to Andrew Woodger, data services director at Adare, printers are starting to realise this fact.
"Printers are starting to seize the opportunity," he says. "Businesses want to be fleet of foot, so partnering with an organisation that has both marketing intelligence and the mechanisms to communicate can increase the ability to respond to data quickly and timely – under one roof it can be done in near to real time."
With many DM print houses now offering a range of marketing channels, and with data security features already in place, the transition to a full-blown data services provider, in theory, shouldn’t be a difficult one. In practicality, however, it is very difficult indeed.
"Don’t just think you can buy in the expertise and set them up in the corner of an office and call them your online marketing team," warns MBA Group marketing manager Graham Smith. "It’s just not that easy."
Indeed, the work involved in expanding your responsibilities with data is extensive. Lateral Group was one of the first companies to spot the opportunity back in 2006 and chief executive Jason Cromack says that, from the start, they realised the establishment of a separate company for data, DataLateral, was essential.
Independent advice
"If you are going to deliver data services you have to have a reputation purely for data so you are seen as agnostic from the communications channels," he reveals. "You don’t want to be seen as a printer with data on the side. We set out our stall as a best-in-class analytics data-based marketing agency, and so recruited experienced and well-versed marketing professionals in the data arena. It has to be independent of the print set-up."
That’s not to say the two companies don’t share clients, but to be taken seriously in the data services arena you have to offer objective advice – if the data says email or SMS is the better option to contact someone, then that is what has to be advised. You can’t wangle the figures in print’s favour.
Neither should you underestimate the work that goes into harvesting these figures. Data Lateral gets involved right up the food chain, creating the customer database from scratch. It takes data that is usually spread in several places across an organisation (transactions, addresses, web-browsing history) and compiles it into a single database. This means all the data on each customer is in one place and it can then be processed and analysed properly.
"As part of the analysis, we have some very powerful tools to profile customers," explains Cromack. "We can work out when and how to best contact them. With some of our clients, we are even predicting when their customers should be purchasing and if they do not purchase in that timeframe we have predicted, we may fire a trigger to that individual with an offer or just a reminder of the client’s existence."
This analysis process is not easy or cheap. Adare offers similar services to Lateral Group through its Purple Agency and Woodger stresses that creating a marketing database is a highly skilled business. It is not just about buying the right kit and the right software, although these are both clearly important, it is also about having the right people to understand how to present the data so it has marketing value.
"Customers leave footprints all over; from online or in-store transactions, to web browsing or signing up for bulletins, so you have millions of data items to look through," reveals Woodger. "You have to be able to interpret it. It’s meaningless to say 70% of consumers bought strawberries last week, you want to know how many buy a certain fruit on a regular basis. You want patterns of behaviour not one-offs."
This may be unfamiliar territory, but if you have the money you can buy in the expertise and, of course, you learn as you go. Where there is less room for making mistakes is in the security side of things. Going into data services means the amount of information handled within your company will be massive and so the potential for error and breaches increases significantly. One error can destroy a reputation so you need to be security-ready from the off.
"You can’t just set yourself up and say ‘send us your data and we’ll print something’," warns Patrick Headley, sales director at GI Solutions. "You have to be audited on data, you have to be secure and have things like ISO 27001."
Cromack argues that you have to go even further. Lateral employs a group compliance director, Chris Parkinson, who ensures the company is as secure as possible. He reports back to the board of directors every month on compliance with protocols, processes and regulations and instructs on any new or adapted regulations that have come about.
"Data security is absolutely critical," says Cromack. "You have to be able to demonstrate that you have absolute integrity within your processes and systems and that you are in compliance to ensure the data remains protected as far as it physically can be."
Woodger adds that it minimises exposure to risk if you have everything under one roof, as instead of being sent between suppliers, the data never leaves the building. Hence, a one-stop shop for all the campaign services is a very attractive proposition.
Big-money game
There is an argument, however, that a company that offers all these services, and that can offer the security systems described, has to be a very rich one. For the big boys with the big contracts, the investment is manageable, but below the top tier, things begin to look horrendously expensive.
"At the end of the day, the costs are huge," admits Headley. "The costs have definitely gone north, as what you are expected to have in your arsenal (segmentation, profiling, security features, staff experience, etc) is significant. It can be a massive learning curve for those just getting into it."
In the boom times, investing in expensive software and experienced professionals would be tricky for a lot of smaller mailing houses, but in the current economic situation, where lending is very hard to come by, it’s often impossible. That does not mean these companies are excluded from offering data services to their clients, however, as affordable alternative options are available.
One option is from Adare and is called Data 360. This is a secure online DM workbench that is used by a number of smaller mailing houses. Through it they can offer basic services to their clients, such as cleaning data, profiling services and segmentation.
"It was originally a data cleaning tool," explains Woodger. "But such is the demand in the marketplace because of the economic situation forcing companies to look for better ROI, we have introduced a range of tools enabling people to profile and segment their data to ensure the communications are best aligned to the consumers."
The trouble with everyone getting on board with data services is that some may get giddy with the potential of having all this newly acquired data and create ever more elaborate personalisations – sending someone a picture of their front door or a record of what they ate on their last meal out – to seperate themselves from the crowd. This is dangerous territory, according to Claire Gibbon, head of graphic design and production at catalogue clothes retailer Boden.
"There is a fine line between where data is useful and where it can be detrimental to the product," she explains. "The consumer is just getting used to personalised communication. We have done variable images on the back of the catalogue and put people’s name on the front of it. We have had strong opinions on these things, both positive and negative. We have people saying it is intrusive using their name on the front of the catalogue, even though their name and address is printed on the back. You have to be very careful about how people perceive the use of their data."
Balancing act
Cromack agrees, explaining that you have to work out the point where using data to improve relationships with customers crosses into scaring them by showing them how much you know about them. Woodger, meanwhile, adds that data should be looked at and analysed to instruct how best that customer should be contacted, not necessarily to increase personalisation.
And that, really, is the key message emerging: for DM printers, data should not just be about personalisation work to give their digital machines something to do. The potential for print’s involvement in data is much broader. Offering data services in some capacity brings benefits to the clients in response times and security, as well as ease of operation, and so can be a real business opportunity for the DM printers. Many in the DM sector are believers already and are fully signed up members of the new data creed. With the release of aids like Adare’s Data 360, it’s likely that the rest will be converted sooner rather than later.
UK’S TOP 20 DM PRINTERS
(Rank/company principal director/annual turnover/number of employees/specialisms)
1 St Ives*/Patrick Martell/£214.7m/3,392**/Broad range of DM services
2 Communisis/Andy Blundell/£190m/1,417/Financial services, retail, security mailings personalisation
3 IOS/Yolanda Noble/£130m/1,600/Transactional, transpromo, digital and litho
4 Transactis/David Steele/£72.5m/380/Data-driven print, personalization, direct mail, transpromotional print, data services including: data cleanse, enhancement, customer management, single customer view databases (build and hosting)
5 Howard Hunt Group/Luke Pigott/£51.8m/335/Data, print, direct mail and cross-media communications
6 Lateral Group/Jason Cromack/£50m/450/Integrated communications management, database management, customer insights, email marketing, direct mail, response management, postage services
7 Adare*/Robert Whiteside/£45m/310/Retail, financial services, consumer goods, charity, public sector, telecoms, utilities, travel and leisure
8 Anton Group/John Knight/£42.4m/380/In-house print and direct mail
9 Polestar Applied Solutions*/Tim J Smith/£38.1m/194/Data management, document composition, high integrity, business-critical mailings, transactional, high-speed, full-colour digital, print-on demand, call centre fulfillment, scanning, software services, procurement timetable, web-to-print, public sector, security
10 York Mailing/Chris Ingram/£34.4m/199/Promotional print, financial, media inserts, charities, retailers
11 MBA Group/Bachar Aintaoui/£30m/300/Variable data, full-colour direct mail, transactional mail, mail linked to personal web pages
12 Encore Envelopes/Russell Croisdale/£29.5m/260/Printer and manufacturer of envelopes
13 GI Solutions Group/Robin Welch/£27.3m/173/Innovative one-piece mailer production on high-speed targeted colour mailings. Digital variable printing for high-level variable-colour direct mail personalised envelopes business-critical mailing facility
14 CFH Total Document Management/David Broadway/£25.9m/227/Transactional
15 The Lettershop Group/John Hornby/£24.9m/254/Creative DM solutions
16 Orbital Mailing/André Kleinman/£23.2m/500/Polywrapping, envelope enclosing and postal solutions for retail, mail order, publishing, travel, public and general sector organisations
17 Great Northern Envelope Company*/Warren Shermer/£21.5m/117/Production and supply of envelope requirements
18 Heritage Envelopes/Mark Sears/£19.6m/130/Manufacture and printing of bespoke and stock envelopes
19 4DM*/Charles Grant-Salmon/£16.7m/227/Data, digital print and mailing
20 Banner Managed Communications*/Catherine Burke/£13m/220/Data services, transactional mail, selective enclosing, hybrid mail, transpromo, matched mailings, specialist hand finishing, laser and inkjet personalisation
* Turnover for DM part of business only.
** Employees for entire group
All figures are taken from information provided by the companies themselves, the PrintWeek Top 500 2010 and accounts filed at Companies House
