August 2011 - The Cost of Business

tips cost of businessBy customizing and adding personal touches to your mailings, you’ll print fewer pieces, cut waste, make a positive impact and reduce your costs.


When we think of 1:1 marketing, we think about increased relevance of the message, the ability to speak to customers individually, and developing a dialog with customers that reaps long-term benefits, such as higher response rates, increased customer loyalty, and larger order sizes. But how about lowering your cost of business?


Because marketers often think of personalization as increasing the cost per piece, the idea of using it to lower the cost of business seems non-intuitive. Yet the print production portion of these campaigns falls under the umbrella of digital printing and print-on-demand. When you consider how this plays into the larger cost equation, it becomes clear how cost-friendly personalized printing can be.


According to research conducted by InfoTrends (“The True Cost of Business Communications,” 2009), print production is only 45.6% of the cost of business for marketing communications. The remaining 54.4%—more than half of the cost—is workflow and process. This includes things like project management, warehousing, and fulfillment/distribution.


By definition, personalized printing is produced on demand, and the cost savings that result from eliminating many of the process costs can be significant. In one published case study, a provider of B2B commerce solutions wanted to reduce its project management complexity and reduce costs from obsolete collateral and inventory. In the past, 60% of its brochures had been thrown away. By implementing a digital, print-on-demand workflow, it reduced or eliminated its cost of inventory obsolescence, and its order handling costs dropped by 85%.


In another example, a travel company used to mail static multi-page catalogs to hundreds of thousands of people. Then it began personalizing based on age, income, and other factors. By precisely matching the messaging to the prospect’s demographic profile, the campaign generated a return of more than 10 times the company’s initial investment in just the first month’s sales. Plus, the slimmer, personalized mailers boasted a lower cost per piece.


So while personalized printing can be (but is not always) more expensive on a per-piece basis than static printing, once you start looking at it on a cost-of-business basis, it can turn those calculations on their head. Not only can the costs be on par with those of static campaigns, but in some cases, they can actually be better. Add in higher response rates, customer loyalty, and per order values, and you knock that bottom line out of the park!