If the expression “data driven” now sounds a bit quaint, it’s because running to numbers has become second nature in almost every phase of print production. Through learning to operate digitally controlled presses and similar equipment, most printers have also mastered the fundamentals of data management as it applies to the type of manufacturing that they do.
But those machine-centric fundamentals are miles behind what successful marketing in print demands from direct mail producers and other print service providers (PSPs) today. With audiences fragmenting and mail volumes declining, data management in printing is less about how efficiently it drives equipment and more — much more — about how reliably it puts finished pieces into the hands of exactly the right recipients.
That makes data management, including the predictive science of data analytics, a powerful engine of growth for printing businesses that excel in it.
“If the printing is commoditized, data management is something you can mark up,” says Leo Raymond, managing director of MailersHub, an online community for the mailing industry. If a provider can design a campaign, manipulate its data, print and mail the deliverables, and report the results, “that’s a competitive edge over the guy who says, ‘Yeah, I can print it.’”
Distinction with a Difference
“We can all print,” observes Chris Mueller, COO of Aradius Group, noting that cost, print quality, and speed to market have become baseline expectations for PSPs. This is why the company’s value proposition begins with its expertise in data management and its ability to tailor data sets to its customers’ specific objectives. “It is what differentiates us from the competition,” he says.
At full-service direct mail service providers like Omaha, Neb.-based Aradius Group, data management is 100% internally situated and administered. As Mueller points out, “our data experts and analysts are all within our four walls.” But, for printing companies new to the task, or those not facing strict security requirements, outsourcing to a data service firm can be a practical way to get started.
“If you’re not very good at it, it makes a lot of sense to outsource,” says Mark Mandell, CEO of Intelisent, a Newington, Conn.-based agency specializing in data design for direct mail campaigns and other marketing applications. That way, the printer gets the benefit of third-party expertise without having to make its own investment in the capability.
“If you don’t have the skill set, there’s a lot to learn,” concurs Dave Johannes, executive VP for strategic initiatives at Moore Group in Tulsa, Okla. Relying on outsourcing, he says, is a “size thing” that works for smaller companies until they reach a point where their data management responsibilities make it preferable to bring the function in-house.
“What you lose by outsourcing is control,” says Dennis Fish, director of technology and data strategy at Deptford, N.J.-based ICS Corp. That might be an acceptable risk in a direct mail campaign promoting “widgets” or some other non-sensitive commodity, according to Tom Glassman, a director of managed services programs at Ricoh and a consultant to MailersHub. But a client such as a hospital — leery of exposing its data to third parties — probably would insist that its files be processed on tamper-proof computer hardware within the PSP’s premises.
Katy, Bar the Door
This is the case at Aradius Group where, Mueller says, all data manipulation takes place “on solid-state servers in a defined secure environment.” Glassman advises that a client’s security requirements are among the first things that a PSP should check, since they may apply to more than data alone. He adds some clients have been known to attempt breaching building entrances of their PSPs to find out just how physically intrusion-proof a mailing site really is, or is not.
Most of the time, however, security is about safeguarding data in accordance with highly specific sets of rules and protocols — a task Mandell calls “absolutely imperative” for businesses like his at a time of rising concerns about threats to privacy. “We spend inordinate amounts of time focused on that,” he says, adding that as people’s worries about online hacks and data breaches intensify, their fears are prompting them “to take a second look at direct mail” as a safer way to communicate and do business.
The main bodies of rules governing data security are well known in the direct mail industry: for example, HIPAA requirements for the protection of health care information; PCI (Payment Card Industry) security standards for cardholder data; and SOC 2 criteria for managing customer data based on security, availability, processing integrity, confidentiality, and privacy.
Compliance with these mandates “is becoming a prerequisite just to having a seat at the table,” according to Mueller.
Layered over the universal standards are the service level agreements (SLAs), audits, and individual certifications required by the market verticals that use direct mail. Fortunately, Mueller notes, there’s usually enough crossover among them to keep the job of complying with everything manageable.
Security protocols keep mailing lists safe. Data hygiene practices assure that they’ll get results. Maintaining cleanliness of mail data is “pretty much a known science by now,” according to Raymond, adding that any client “with a serious business interest in getting its mail delivered” will insist on scrupulous attention to hygiene from its mail service providers.
Return to Sender Is Expensive
Glassman points out that the price of failing to do so can be steep. He explains that the production cost of a mail piece deemed RTS (Return to Sender) by the U.S. Postal Service (USPS) averages $3 to $5, and that organizations typically process five remail attempts per piece before correcting the problem or ceasing to use the address. This means that a sender receiving 5,000 RTS bounce-backs per month could end up spending $125,000, or $25 per piece, before stopping remail: a fivefold increase over the cost of the initial mailing.
No one wants to waste money on “unclean lists” full of undeliverable addresses, Johannes observes. Fortunately, well-established procedures for data hygiene help mailers to avoid needless expense and boost the ROI of what they put into the mailstream.
The USPS requires that lists be compared periodically with its National Change of Address (NCOA) registry, which is updated weekly. With the help of USPS-approved software, files can be merged, purged, and name-suppressed to eliminate redundant mailings. Mailers can also clean up their lists against databases of deceased persons, those who have filed do-not-mail directives, and other addressees who aren’t appropriate to include.
“Strong data [meaning clean data] is at the core of all direct mail campaigns,” Mueller declares. Part of the strength lies in understanding the reception the mailing will get on the recipient’s end, and respecting that reaction. As Johannes puts it, “we honor the wishes of those who don’t wish to be mailed to.”
Fish agrees that “you eliminate a lot of complaints” about direct mail by scrubbing lists clean of addressees who don’t want the communication or who simply aren’t there. “Nobody wants to be that story,” he says.
The Postal Partnership
Another pillar of good data management is a solid working partnership with the USPS. This is because the more closely databased addresses conform to USPS standards for accuracy and automated handling, the more readily processable the mailing will be, and the more favorable the postage rate the sender will qualify for.
“Seamless acceptance” of the billions of pieces it mails annually is what Moore Group strives for, according to Johannes. In the same spirit, Mueller calls USPS “one of our strongest partners as it relates to our business continuity” as a direct mail producer.
Sophistication on all of these fronts is mandatory for everyone in the direct mail business, because the nature and purpose the industry serves is changing. Marketing in general, Mandell says, is moving from broad, product-based outreach to focused messaging that appeals to individual needs: a strategic shift that has little use for the “spray-and-pray” rationale of old-fashioned mass mailings.
Now, he continues, data management is about aggregating information to build “look-alike models” of consumers whose purchasing behavior can be inferred from what marketers find out about their personal traits and lifestyles. “You have to speak to people in the way they want to be spoken to,” Mandell emphasizes, with highly specific and targeted direct mail pieces based on the data-defined “segments and clusters” they belong to.
Mueller, who also writes off spray-and-pray as an anachronism, sees a similar progression from one-to-many marketing to segmented verticals, and from there to 1:1 communication. What it means, he says, is that “the more granular we can get our direct mail to be, the greater the return we can expect for our clientele.”
From ‘Blender’ to Mailbox
The path to greater granularity lies in data analytics: a process that Raymond metaphorically describes as putting mail data into a “blender” with social media activity, Internet history, and other indicators of consumer behavior. From this mix, he says, emerge clues to a recipient’s “propensity to purchase certain types of products and services.”
Fish says data analytics consists of “figuring out the best people to market to and to send to through direct mail,” echoing Johannes’s definition of it as “the science of deciding how and whom to market to” based on past performance.
“Everybody has data,” Mueller observes. Aradius Group’s “secret sauce” is gleaning useful insights from it: revelations that help the company develop actionable items and relevant offers. Doing so “only allows you to be more impactful for your customers” from campaign to campaign, he says.
At Intelisent, according to Mandell, an in-house data science team takes client data and “pores over it” in search of predictive patterns. Johannes reports that Moore Group is leveraging its capability in data analytics through SimioCloud, a platform that uses machine learning and artificial intelligence to sharpen the targeting of digitally printed direct mail campaigns.
But analytics could be an overreach for companies that aren’t this adept at data manipulation. Because of its complexity, data analytics is “not always a natural extension of a commercial mailer,” Raymond says, advising those new to the science to seek help from outside experts in their initial ventures.
You Don’t Have a Choice
However it is achieved, mastery of data management will be a prerequisite to staying competitive in the direct mail business, both for specialists and for general commercial printing businesses wishing to enter the field.
The pros take nothing more seriously. “We have to. You don’t have a choice, it’s a critical part of the process. It’s one of the things we lead with,” Matthew Bastian, ICS Corp. CEO, declares.
One of its business advantages is being a good tool for customer retention. As Glassman points out, the more thoroughly a provider can integrate with customers’ databases, “the harder it is for them to change vendors.”
But, the ultimate benefit is to the quality of the product and the value of that product to marketers. Through personalized digital printing informed by data analytics, says Johannes, “every mail piece can be its own digital canvas:” targeted, relevant, and compelling.
Given that kind of boost from well-managed data, “direct mail is still a fantastic option,” Mandell concludes.
As Good as It Gets
What does optimized data management consist of?
According to a presentation developed for Ricoh by Tom Glassman, Mark Rheaume, and Dion Wilhelm, a fully optimized system “offers a proactive and reactive automated data hygiene system with the ability to generate fully automated customer communications with 100% mailing, 100% chain-of-custody, and integrate with a truly digital/ physical customer communication pathway.”
- Fully integrated database management that allows for a fully automated customer communication path.
- Ongoing address hygiene automated through hot folders, so it is seamless and transparent.
- Complete white paper factory with the use of digital presses for enhanced personalization.
- Correspondence software that allows for true omnichannel communication: a complete merger of
digital with physical.
- Software and equipment for digital commingling; through batch processing, achieving maximum postage discounting.
- Integration of software, machine, and postal data for true measured business decisions.
- Reporting in real time, including delivery notification of digital and physical messaging.
- Getting to the final step of full process integration will require high capital investment in technology and additional technical staff, the authors note.