Marketing strategies driving the database: Customer Relationship Management and the future of variable data printing

Print Action, Apr 2003 by Robinson, Jon

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Steven Spielberg commissioned a team of futurists in 1999 to develop a framework for what Washington, DC, might look like in the year 2054. He was about to adapt a Philip Dick short story into a long movie called Minority Report. The previous adaptation of Dick's Blade Runner had worked out pretty well, with its wash of neon and anarchy. There was a lot of pressure on Spielberg to get the future right in this one.

The result was a city of compact cars that magnetically climb buildings, and reality arcades that make dreams come true, and advertisements that suddenly appear on public walls. If you were to approach one of these walls, your retine would be scanned to send data to a database, which would then tell the screen how to address you. "John Doe, you look like you could use a Guinness".

The movie's production team convinced some of today's most recognizable brand makers, such as Guinness, Lexus, Pepsi, Reebok and Gap, to put their products directly into the movie's story line. The film contains 14 full commercials and another 15 shorter spots.

A woman in a bathing suit pops up on another wall as the main character walks by. He's frustrated and hears the woman ask "Need to escape? Blue can take you." Obviously, American Express and is pretty faraway from having the ability to sense if someone is in a frustrated mood - so that a personalized ad would offer them an escape - but the idea of using retina scanners and databases to identify someone is not based entirely on science fiction. Well, yes it is. And even today, in 2003, marketing companies are using Customer Relationship Management to drive customized messages to target audiences. Understanding why and how they do it is vital to understanding the variable-data market.

Reality in the market

Dropping a name, address and some related information on a piece of paper - and then sending this piece through the mail - can no longer be considered an effective form of variable-data printing. Yes, it is still very much variable printing, but not effective variable printing. Processing information like this on a transactional piece continues to be a viable market for printing done on large-volume, black-and-white production printers. But it is a functional variable-data process, not a process that a corporate marketing department would use to get their message to a targeted audience.

Marketing departments are fully in line with the concepts behind what drives the need for personalized messages. They are also aware of the technologies that can be used to deliver both variable text and images in a targeted campaign. Growing mailing costs act as one obvious push for targeted mailings, but the real purpose behind it is the corporate need to make money. No matter what marketing initiative is started, the goal is to finish by making money.

Responses from mass mailings have dropped to the two per cent level according to the Direct Marketing Association. That slide will only continue because the internet gives consumers a targeted mindset...search and you will receive. The problem is that people not only want to receive, they now want to receive in colour and in alternative formats.

While transactional black-and-white pieces continue to be a viable moneymaking strategy, the market is overcrowded with machines that have flooded the sector for a decade. This over capacity is beginning to push down margins in this sector. The greatest margins will be found from effective use of variable-data printing, which means colour, customization and cross publishing. Marketing departments are willing to invest in these projects because it will allow them to deliver a personal message to their targets. It will allow them to increase their response rates. If you need any more evidence of this growing trend, look at the attention companies are paying to Customer Relationship Management (CRM).

Clean and meaningful

In other words, companies are finally paying close attention to building clean and meaningful databases. The databases are being built around varying CRM based on industry. If you want to enter the variable-data market, CRM is a language you will need to speak, because the print buyer is now out of the equation and you need to approach the client.

This, of course, is the solution sell you've been hearing so much about. To talk CRM, you need CRM. There are a countless number of strategies and software packages for establishing such a structure, but the best foundation is always laid with simple and solid principles. Then you can get as complicated as you want. And you may have to if you plan on staying in the variable-data game.

Amazon.com provides one of the best strategic examples of effectively plugging CRM into a database for the purpose of increasing response rates. When you log into the membership portion of the Amazon.com, you are presented with a few books that are of subtle interest to you. The company has stored your reading habits from past orders and inquiries. This is a simple but effective example of letting CRM drive a personal message.