Jim Hackett, SourceLink's vice president of business development, considers the company an application specialist and prefers not to name the equipment the plant uses. He says the firm constantly looks at new digital printing equipment. But Hackett says customers care more about solving problems than about products--a key point for thinking unconventionally.
Partnership Helps New Mexico
Hackett provides a prime example of reinventing a business model to create a new revenue stream: He was called to a bidder's conference to answer an RFP for automobile registration renewals from the state of New Mexico, and wrestled with ways to differentiate SourceLink from other firms wanting the account. "I don't want to be in the business of competing on a cost-per-thousand basis," he says. There must be a way to give the state of New Mexico what they want--and more, Hackett thought.
Hackett approached a respected competitor for the New Mexico account and turned the firm into a partner. Together, the companies gave--yes, gave--the state of New Mexico printing for a direct mail piece that's printed and mailed weekly. That's right--the cost of the printing was $0. The two companies saw an opportunity to add advertising to the piece, and they sold the idea to companies such as Ford Motor Co., GEICO, and local repair and service providers. The direct mail piece now includes 4-color, variable-data-printed (VDP) advertising targeted to recipients' preferences, demographics and regions. Hackett says such a project wasn't feasible a few years ago because of production restrictions and old-line thinking.
Hackett distinguishes SourceLink's position as delivering on a strategy versus delivering a tactic or product. The strategy generates business for SourceLink's clients and supporting advertisers. The direct marketing firm carries its image to the frontline of sales, as employees' business cards read "business generation specialist," not "account manager." "This kind of positioning begins the consultative relationship automatically," Hackett says. "We aren't just in business for ourselves; we're in business for our clients."
American Airlines' Program Takes Off
American Airlines' AAdvantage (AA) program is the largest frequent-flyer program in the world. Problem was, the program lacked a focused direct mail package, Hackett says. When people received their AA statements, they also received as many as 15 other inserts touting deals from American Airlines' AA partners such as Citicorp, Hertz and MCI. Hackett says American Airlines didn't want to break its partnering agreements with those supporters, but needed to communicate with AA members without overwhelming them with messages.
Prior to SourceLink's involvement, American Airlines produced the AA statements, and partners supplied inserts. A mail house stuffed the statements and inserts into envelopes and mailed them. The job was costly and lacked a targeted message, resulting in information overload for customers, Hackett says. And inserts often landed in the trash.
SourceLink redesigned a welcome kit for new AA members, using 4-color process personalization to feature U.S. destinations that are close to members. For example, members in the Southeast may see a 4-color image of Disney World (one of American Airlines' AA partners). Targeted messages include vacation-package details.
Personalization is based on AA members' demographics, too. A 55 year-old "empty nester" might get an offer for a golf trip to Hilton Head, S.C., or an MCI calling-card offer for their college-aged sons and daughters. Because the pieces are produced with variable image printing, marketing messages aren't limited to one part of the packages.
The New 'Repeat' Order
One valuable byproduct of digital printing is the growing demand for monochrome and color VDP. The F.P. Horak Company, a $20 million manufacturer in Bay City, Mich., invested in digital printing in 1995 and has experienced significant VDP growth. The firm produces more than 8 million mail pieces annually for customers in diverse markets.
VDP necessitates a greater emphasis on programming because firms can produce jobs in tens or hundreds of thousands of versions, says Jeremy Morford, digital solutions manager at F.P. Horak. "Programmers are needed to set up and 'own' the job to make sure it's programmed, printed and mailed correctly with 100-percent accuracy, every time," Morford says.
Most companies offering VDP use off-the-shelf programs that work with QuarkXPress™ or Adobe Acrobat® files. F.P. Horak has progressed further into the database management side by acquiring a programming language called Delphi (offered by Scotts Valley, Calif.-based Borland USA, the manufacturer of dBase and other programs). Delphi is used to maintain databases and control logic. It outputs an Adobe PostScript® file that's written line by line, and describes page layout for text, graphics, paper stocks and other specifications. "By going so deep into programming, we have extended capabilities into personalized fax, email, dynamic web sites, and of course, personalized print jobs," Morford says.
Print jobs with the most value and growth in the digital segment are full-color, one-to-one marketing documents and sales support materials, according to Ivars Sarkans, president of Los Angeles consulting firm Sarkans & Associates. "Unlike conventional offset production, much of digital printing is generally not profitable on a job-by-job basis," he says. "Digital printing tends to be profitable only when sold on a program basis, with a steady flow of similar orders over a sustained period of time."
Morford and most manufacturers offering digital printing agree. "The nature of digital printing allows us to easily increase the number of jobs," Morford says. F.P. Horak produces a health-benefits book for one large customer, and the book is personalized for each employee on each print run. Other applications fit nicely into a "repeat" model. Product manuals are ideal for digital printing, Morford says, because they're easy to print and represent significant volume over time. F.P. Horak's other niches include personalized tax forms for state and local governments, digitally printed forms for local hospitals, and e-commerce-driven printing such as business cards, letterhead and memo pads.
A Different Sale Means More Trust
Whether you're looking to evolve your clients' print needs or seeking new applications that will dazzle end users, variable data printing can help you differentiate your offerings. Account representatives need to be aware that this is one area in which distributor/ manufacturer partnerships are critical for success. For many digital print jobs, distributors and manufacturers need to visit customers together to get all the facts. Close relationships require trust on both sides, and both parties should prosper.
Contributing Editor Dennis McGarry, CDC, is vice president of manufacturer and technical programs at DMIA. Email him your comments at dmcgarry@PSDA.org.
