Though not a new application, the hype of TransPromo is not diminishing at all; in fact, it is only increasing. But for transactional organizations, it's becoming hard to separate myth from reality. The road to successful implementation of TransPromo initiative is a bumpy one, as the traditional environments of transactional and marketing seem to come from opposite worlds. Yet, this relationship holds so much promise. Go beyond the hype, and see how your company can really overcome the operational challenges that face you right now.
With all the hype of TransPromo, it would be easy to jump too soon and trip right out of the gate. For example, if you come at the project thinking that TransPromo is about selling something on your statements or invoices - you're missing the big picture. Your transaction documents are just one of the many channels for serving and communicating with your customers. TransPromo campaigns must work in concert with other customer communication vehicles. Thus, the relevant messages on your statements should be placed in context with the information on that document as well as the context of the overall corporate communications strategy. But has your organization done the research necessary to really understand what makes your customers tick and what events drive behaviors like buying more products and services, recommending products to others, using self-service tools or switching over to your competition?
Research from Forrester, TAWPI, Corporate Insight, Bancographyand others suggests that starting your messaging in a way that is designed to serve rather than sell will give you better long-term results. Several of these firms also note that consumers react differently to messages on their retail credit card or phone bill than they do on their investment or insurance communications. There are very few case studies available that provide measurable results for TransPromo initiatives, and there may be none available for your particular industry segment. It's not that companies aren't already benefiting from TransPromo capabilities - it's that they consider it a significant competitive advantage and, therefore, shield all of their results from public knowledge. That means that you will most likely need to conduct your own research and refine your strategy based on ongoing measurement and feedback.
Ultimately, your master plan should consider relevant messaging, on-statement advertising, coupons and personalized URLs (PURLs). While relevant messaging is always, well - relevant, not all other components will be suitable to your situation. Analysis of your customer segments, customer behaviors at different points in the relationship life cycle and the key behaviors you need to influence is critical. Further, what are the results that you hope to achieve by influencing customer behaviors? Are you expecting to increase sales, reduce customer churn, decrease servicing costs, gather more customer referrals or all of the above? What will it cost to achieve these results? What will your return on investment be? Do you have the internal benchmarks necessary to make your case? Do you have the resources to follow up if customers respond to your offer?
Once you have a strategy and a well-defined business case, you are going to have to sell the concept to finance. If marketing is driving your TransPromo initiative, like most, you will have an uphill battle. According to recent research conducted by Aegis Group's Marketing Management Analytics, and presented at the Association of National Advertisers' 2008 Marketing Accountability Conference in July, 60% of surveyed financial executives believe their firm's marketing departments have an inadequate understanding of financial controls. From the marketer's perspective, just 14% of executives said that their firm's senior management had confidence in their marketing forecasts. So if you want finance on your side, or expect your manager to go to bat for you with senior executives, it is essenstial to put finance people on your team when building the business case and measuring ongoing results.
Collaboration across many groups, including finance, is critical to success. But often, organizations are built upon the structure of independent silos. There is a tendency for friction between marketing, IT and operations departments relative to transaction documents. According to Sanjib Kalita, SVP, loyalty marketing at Citi Cards, North America, "From a top-line perspective, there is tension between the traditional goals of statements (low cost, clean graphics, easy to understand) and the goals of marketing (more complex graphics, higher expenses, not as straightforward)."
Getting the necessary cross-company collaboration and support for your project, like any transformational program, will require senior executive sponsorship. One of the first things you may want to request of your champion is the creation of a new position to help coordinate communications across the organization. Bill Broddy, principal at IMERGE Consulting, recommends having a "properly trained and motivated •message management' specialist in place that has the authority to enforce the development, approval and promotion processes." Broddy describes this specialist as having enough expertise in both data mining and in graphic layout to keep IT and corporate communications satisfied. At the same time, he recommends that the position be afforded a reporting level with enough authority to make stakeholders pay attention.
Once you've caught the attention of senior management with your business case, all of a sudden, your peers will start coming down the hall with their hand out, hoping to get a piece of your budget. Part of the negotiation will be determining what technology investment is required and the point at which it is needed. In many cases, a solid proof of concept can be conducted with no major technology investments.
The success of any TransPromo initiative is dependent upon the ability to extend the purpose of a transaction document from a point-in-time notification to an ongoing dialogue with customers. Gathering and processing the customers' side of that dialogue, or closing the loop, is what elevates TransPromo from even the best-designed and most relevant one-directional statement or invoice. TransPromo can be considered a subset of closed-loop marketing activities. Additional tools that close the loop for your TransPromo environment include:
- Email marketing
- Web analytics
- Web content management
- Click stream analysis
- Call center management
If you don't have all of these tools in your arsenal, it doesn't mean that you can't dip your toe into the water. Take stock of the technology you have, and think about where the centerpiece of your TransPromo architecture will be. Many companies find that in the short term, their existing invoice and statement systems provide adequate data for fairly robust and relevant messaging. Clean, quality data is critical to success, and your statements and invoices are a place where the data had better be accurate. Expanding the data set over time will enable a more robust solution in a controlled manner. Unfortunately, driving messaging from statement data alone does not provide a holistic picture of your customer's activity and preferences. It limits (but does not eliminate) your ability to tie your statement messages and offers to campaigns conducted via other channels.
Also, don't be fooled into thinking you can't benefit from TransPromo if you don't have full color printing. Relevant content and offers are an improvement over generic messaging in any color, including black. Likewise, color printing won't save a bad concept. According to Pat McGrew, data center and transaction segment evangelist for Kodak, "Everyone that slaps an irrelevant offer on the bill, even if it is in color, gives TransPromo a bad name."
While many applications can benefit from full color printing, sometimes spot color or highlight color can be just as effective. Océ Printing Systems has coined the term "job appropriate color" to describe using just the type of color that is appropriate for each application. Despite the recent launch of the high-speed Océ JetStream full-color, inkjet product family, their vice president of product marketing, Guy Broadhurst, is adamant that "consumers of printed materials should only have to pay for the level of color that will make their job effective."
"The convergence of color and black and white is easily handled with today's printing technology. Highlight color works well for many TransPromo applications, especially when colors can be readily changed and all your jobs can run on the same system," continues Broadhurst. He advises, "Digital color requires flexible equipment and unstopped workflow. Some print platforms use •quick change' stations to easily swap out one color for another, even custom colors. Custom color matching eliminates the need for shells pre-printed with corporate colors and lets you keep more work from one digital press, reducing costs and improving ROI."
Of course, with the help of technology resources, the job of effectively communicating with your customers is only that much easier. In TransPromo terms, that means customer intelligence tools that cross all channels, street-level profiling that delivers usable data on lifestyle and life-stage attributes, as well as mapping and geocoding applications that highlight patterns and opportunities within segments of your customer base while helping you to project a localized image in communications. In addition, you could also implement enhanced barcoding capabilities for response tracking, like QR (Quick Response), which can be scanned with a phone to take the reader right to a personalized URL or to store information in their phone or other hand-held device.
In order to get the data necessary to deliver truly relevant offers, it is advisable to get the best data gathering and cleansing tools in order to provide a single, comprehensive view of each customer. Of course, these tools have to adhere within the bounds of privacy regulations. Used with discretion and respect, database and marketing analytics can help to target opportunities that are valuable for you and the customer. Finally, an investment in the technology to help track the cost of the offers delivered, the response to those offers and variations by channel and segment can ensure that the business case is continually evident to your project sponsor and constituents.
Even with all of the best technology behind your TransPromo project, these initiatives can still be vulnerable to failure. In fact, vulnerabilities in such projects are likely to relate to people and processes rather than technology. "Departments that need to collaborate to help a TransPromo initiative are not always capable of communicating. Marketing speaks •time to market,' while production talks about •extensive parallel testing,' and document design says, •Where's the content?,'" according to Scott Draeger, product manager, Dialogue for HP. "No software can cause collaboration. This has to be driven from the very top of the company through a well-crafted and internally understood customer communication strategy."
Pat McGrew agrees, citing "lack of coordination of all marketing messages, including web, email and mass media, with the statement messaging and statement design" as one of the top reasons TransPromo projects fail. That coordination starts with people and processes, supported by technology.
The March 2008 study, "The CMO Strategic Agenda: Automating Closed Loop Marketing" from Aberdeen Group provided some great insights on the results that can be seen from the investment in marketing processes first and technology second. The study found that 88% of companies deemed best in class used closed-loop marketing and that the remaining 12% plan to use it. The Aberdeen best in class represent the top 20% of aggregate performance scorers in the study, and they reaped some significant benefits from using closed-loop marketing:
- 36% average increase in year-over-year annual revenue
- 26% average increase in year-over-year ROMI (return on marketing investment)
- 21% average lift in year-over-year conversion rates
The survey showed a difference of 41% between best in class and laggards in terms of annual revenue increase and 42% for ROMI.
If you drill down a bit further in the study, it becomes apparent that these results don't simply come from great technology. Less than half (42%) of the best-in-class firms had automated their closed-loop marketing processes. Their results were driven by great processes, integrated processes - but in many cases, manual processes. Aberdeen specifically warns, "It takes time to nurture the organizational processes that support the technologies." Once the right processes are established and proven, companies can make better technology decisions and potentially reduce their cost per result, increase revenue or potentially both.
Once you have your design, process, people and technology in place, you will need to consider how you will use the power that TransPromo offers. Keep in mind that many consumers are disenfranchised with blatant marketing on non-retail communications, such as financial and insurance documents. Customers want to feel that their bank or brokerage firm is operating in their best interests, but often, they don't feel that way at all. This year, consumers' advocacy ratings of their financial institutions, across the board, fell to their lowest levels in five years, according to the Forrester Research study, "Customer Advocacy 2008: How US Consumers Rate Their Banks, Brokerages, And Insurers." It's hard to cross-sell to a customer who doesn't trust you.
TransPromo can improve this situation by enabling better service to the customer and, thereby, gaining the customer's trust and permission to market other services. This can be achieved by acknowledging any problems that the customer has encountered and providing a personal URL where they can see the status on problem resolution or by offering an account review to ensure their needs are being met. Service recovery, the manner in which firms respond to service failures, is increasingly seen as a distinguishing feature of successful organizations. A firm's effective response to its failures can reinforce customer relationships, while an ineffective response or lack of response is more damaging than the failure itself.
No matter the challenges, the TransPromo market is growing at an astounding pace. But, perhaps given these circumstances, leaders are still scarce. Implementing TransPromo is a continually iterative process of observe, design, refine. So start small, and keep building on your success.
Elizabeth Gooding [mail@artplustechnology.com] is the president of Art Plus Technology, a wholly owned subsidiary of NEPS LLC, which is a trusted provider of communications management strategy, design and development services.
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