Boy meets girl. Boy falls in love with girl. The two marry and live happily ever after.
Now, apply this concept to TransPromo. Simply put, think of this technology as a marriage between transactional documents, such as financial statements from credit card companies, banks or utility providers, and an explanation of benefits or invoices from your healthcare insurer and promotional messages. The "Promo" part can be promotional offers including those typically found in direct mail, coupon mailings, cross or up-sell offers, inserts rewards or loyalty programs, explained Scott Baker, vice president of business development at Boston-based GMC Software Technology.
"What it's really describing is a document with more than one purpose, a multifunction document that is specifically designed to use regular communications that the recipient is expecting, such as bills and statements and other transactional correspondence (the 'Trans' in TransPromo). Also, TransPromo is not limited to print. TransPromo communications can be delivered via e-mail or by a personalized Web page or PURL," he elaborated.
And, while TransPromo is essentially a union of transactional data and marketing messages to bring about a sales-based response, it serves other purposes. For instance, it can be educational, provide money-saving tips or offer advice. Companies can potentially profit from each customer communication, and an exchange is created that maintains a healthy, prosperous relationship.
When creating a TransPromo document, first, companies need to identify the space for their message. This can be done by finding existing white space within the statement design and/or the leftover space at the end of the transaction, Baker explained. TransPromo doesn't always have to be delivered in color, but color is preferred because it makes a message pop, garnering higher response rates.
When it comes to TransPromo, successful marketers often look to their past. Art Waganheim, vice president of operations for Davie, Florida-based Paitec USA noted many TransPromo marketers find it advantageous to sell transactional recipients with personalized ads based on what they've previously purchased. "For example, if a plumbing wholesaler can pinpoint a customer whose invoice includes sprinkler parts but who has never purchased sprinkler pumps, that wholesaler can add a special sale coupon for pumps on that invoice," he said.
To be effective, TransPromo documents must contain relevant promotional offers that interest the recipient. Research is crucial. Baker offered an example involving the use of personal and actual transaction data, such as spending habits or types of items purchased to drive the message or promotional offer. "A cell phone carrier might want to use the number of text messages a user sends and receives to 'up-sell' them to a phone with a QWERTY keyboard rather than a ten-key model," Baker said. "The key is to really mine the data behind the transaction to determine what specific, unique and highly personalized offer should be made."
The Bottom Line
There is a popular misconception about TransPromo: high costs. There are multiple costs for this marketing technique, but the key cost, Waganheim said, is "for being able to successfully mine the database containing each customer's purchase history in order to properly present them with cross sales opportunities on their invoices and statements and to be able to position the ad or notice on the existing transaction document."
He continued, "If that database can be mined, the hardware costs for completing the TransPromo project are scalable to the mailer's budget. For low-volume mailers interested in colorful documents, Paitec USA offers its PM2100 Digital Color Print 'n Mail pressure seal system at a retail price of only $10,895."
Baker compared response rates between TransPromo and the typical non-personalized direct mail campaign to demonstrate the value of TransPromo. Transaction documents and TransPromo come with a guarantee that the mailer will be opened and read. By adding personalized messages, companies just using TransPromo often see response rates as high as 20 percent. This number escalates when combined with multimedia or cross-channel communications, PURLs and e-mail.
Baker admitted results are often so high that companies are not divulging results and rather choose to share information via seminars, conferences and webinars. To date, he said, formal survey results have not been published.
He added, "The response rates with TransPromo alone are five to 30 times [higher] than other methods, justifying the costs. In addition, the elimination of inserts, the use of lighter weight materials, etc. and e-delivery result in fewer mailed pieces making them a winning cost proposition for most organizations. "In reality, marketing messages and offers 'ride for free,'" Baker said.
So what is a reasonable response rate for a conventional personalized direct mail campaign? According to Baker, it is less than 3 percent. Through industry studies and personal experience, Baker knows that inserts are often discarded as unread. This may be because such inserts don't apply to the mailer recipient and the recipient may be correct to believe the sender is employing the "spray and pray" technique, which hopes that at least a small portion will have the desired effect—a response.
Baker asked, "How do companies measure the lost opportunity to have a personalized and meaningful dialogue with their new prospects and customers and what that conversation might bring in terms of new and repeat business as well as loyalty and retention?"
The additional need for an IT staff is another misconception about TransPromo. "The greater burden is really on the content providers as there is much more required in the way of marketing messages and other marketing 'assets.' In effect, you are running multiple campaigns simultaneously with every statement run. [Furthermore,] if the company is already producing transaction documents, most of the IT staff is already in place," he commented.
Waganheim agreed. "While having an in-house IT expert will certainly reduce implementation time and support issues, there are many knowledgeable database engineers who can help mailers design and implement a database mining project and help reformat existing transactional document designs to accept TransPromo messages."
Like any collaboration, all involved parties must understand the goal and the measures it takes to accomplish this feat. Baker said the challenge for builders of TransPromo solutions is to show customers and partners how all of the pieces work together. "For TransPromo teams, the process chain is a roadmap to software, hardware and infrastructure," he stated.
Although still a fairly new technology, TransPromo has a lot of exciting things to offer the industry. If users take advantage of everything this technology has to offer, they will have an opportunity to increase their revenue base.
Waganheim concluded, "Those firms that choose not to evaluate such potential will have to continue to invest its traditional marketing dollars in the old school strategy of broad-based marketing instead of fully yielding revenue from its loyal customer base."
- People:
- Scott Baker
- Places:
- Boston