To get a sense for how mail optimization works with precision marketing, consider the average bill you routinely receive from retailers, utilities, insurers, financial service providers and the like.
Note how pertinent information such as account numbers and billing info is the least of the statement, while the most prominent feature is white space.
Precision marketing experts view that expanse as profit-generating real estate.
That’s why savvy marketing consultants are moving their clients into mail optimization.
Security company’s bills get creative
Mark Peterson of Chicago-based Diamond Marketing Solutions consults for a national consumer security company that operates 4,000 dealerships across the United States and has more than 1 million billable customers.
“We’re putting a program together where we provide the billing for that company’s dealerships to market other products within the community that they serve, one-to-one,” Peterson says. “What an opportunity for each dealership to set up a database that collects articles, data or messages that can go out for that dealer specifically. And it really doesn’t cost them a whole lot.”
Big, measurable results for a hotel chain
One of the world’s largest hotel chains is already on board. In 2008, the chain recruited InfoPrint Solutions to help redesign its lifeless loyalty statements. The result was a textbook example of mail optimization techniques.
Page one of the revamped statements opens with a personalized greeting and an itemized list of charges below. Space on the side and the bottom of the page showcases details of a co-branded promotion with MasterCard. A second page features space for third-party promotions, an “educational” alert advising customers to update their contact info, and boilerplate language.
InfoPrint Solutions reports that these intelligent changes resulted in a 15-percent uptick in loyalty program registrations, a 39-percent increase in number of stays, and a 500-percent rise in the chain’s branded MasterCard applications. “The hotel chain was able to almost double ROI on the precision marketing campaign,” says Sandra Zoratti, VP of Global Solutions Marketing for InfoPrint Solutions. “ROI was 278 percent, vs. the old, business-as-usual statement where ROI was 178 percent. This example clearly demonstrates how precision marketing helps drive real, quantifiable results.”
A Hollywood debut
The Los Angeles Department of Water and Power (LADWP) was born more than 100 years ago when legendary engineer William Mulholland designed an elaborate system to bring water to parched Los Angeles. Today, the utility operates under a $4.19 billion budget, supplying water and energy to a whopping 3.8 million residents and businesses.
But back in 2008, it was the water department’s public image that was all wet. An internal study found that 25 percent of the utility’s customer calls — approximately 4 million calls — consisted of people inquiring about their monthly bill. An independent customer satisfaction survey ranked LADWP in the bottom quartile of national utilities.
“City council was receiving information from customers saying ‘We need a clearer bill,’” says Mark Townsend, LADWP assistant director of Information Systems Strategy and Project Delivery.
Time for an overhaul
LADWP recruited InfoPrint Solutions to consult and provide hardware. The famed utility drafted its first redesign, then conducted eight focus group sessions to generate input from residential, commercial and large commercial customers. That feedback was incorporated into yet another redesign, which was then focus grouped.
The result of all this tweaking is a two-sided statement with onserts replacing the old inserts. The nauseous green color scheme of old is replaced with white pages offset by high-contrast text and graphics in cool blue, mint and warm yellow.
The first page features a summary of the previous bill amount, payments received, new charges, total amount due, and any past-due balances. Page two contains details of electricity charges with a blue-hued graph showing the customer’s 14-month consumption history, as well as an accompanying thermometer chart illustrating the LADWP’s tiered pricing system — “So you can gauge whether you’re going into the next tier and might need to conserve to avoid getting into higher-priced electricity,” Townsend explains.
A third page features water and sanitation charges accompanied by a water consumption graph, while page four informs customers how and where to pay their bill.
Finally, the LADWP “Connections” newsletter has been changed from an insert to its own two-sided onsert. Plans are in the works for photos to accompany promotional-type information, including information about rebates for low-flush toilets, online bill pay and more.
“The idea is that we’re trying to provide enough info on the first page,” Townsend says. “We find that if the bill falls within the boundaries of what a customer is expecting — say you’re expecting a $100 electricity bill and it’s $95 — then most people don’t need or want to look any further.”
Though Townsend couldn’t provide a total cost estimate for LADWP’s investment, he estimates it will save approximately $500,000 annually by eliminating inserts alone.
The moral of the stories
It appears that precision marketing mail optimization strategies are approaching critical mass, having been leveraged by both the nation’s largest municipal utility and hotel chain. But companies should engage sooner rather than later.
“The companies that apply this now have an incredible head start on their competition,” Zoratti says. “They’re going to engage with their customers, develop stronger, more intimate relationships and exceed initiative expectations. People who adopt these practices later will have a much tougher row to hoe breaking those loyal customers away from the companies that have already engaged with them.”B-to-C Marketing, Case Studies, CRM/Customization, Cross-sell, Data Management, Integrated Marketing, Large Business, ROI, Strategy, Targeting, Technology