Graph Expo Chicago Sept. 24, 2000 Payback formula Traditional view: cost per piece Thats only appropriate if everything else is constant The formula: Expected value = response rate xclose rate x$ per sale Evaluate payback by: Expected value / cost per piece
Graph Expo Chicago Sept. 24, 2000 Example: traditional payback model Expected value = response rate xclose rate x$ per sale Example: 2% response, 10% of those buy, average sale $500:.02 x.10 x $500 = $1 of revenue per mailer. If cost, mailed, is 50c, payback is 2:1.
Graph Expo Chicago Sept. 24, 2000 If your response rate never varies: The print buyer can only improve payback by reducing cost per piece. Examples: $1 expected value / 50c = 2:1 payback $1 expected value / 40c = 2.5:1 payback $1 expected value / 30c = 3.3:1 payback So thats what the buyer will hammer on: cost per piece.
Graph Expo Chicago Sept. 24, 2000 The fundamental value proposition of personalized print is: it increases the value of the printed page as a purposeful communication tool.
Graph Expo Chicago Sept. 24, 2000 Pull Marketing Driven by: customer Stage in the relationship: customers have already raised their hand Value propositions: – More cost-efficient fulfillment – More targeted: More of what they asked for, less of what they didnt want
Graph Expo Chicago Sept. 24, 2000 The underlying marketing forces Personalize everything The push for share of attention The death of dependable brand loyalty The birth of customer relationship and one-to-one marketing Peppers & Rogers: – Identify – Communicate – Differentiate
Graph Expo Chicago Sept. 24, 2000 Controlling the sales process This is not a print buyer sale: its a sale to a marketing executive If youre walking on cement, youre in the wrong department. Look for carpet. Longer sales cycle Earlier involvement – perhaps even at campaign conception These arent print jobs – theyre annuities
Graph Expo Chicago Sept. 24, 2000 But: It takes work to set up the data link It takes work to program the page (create the job and its logic rules) and test how the data selects content So it makes a lot more sense to look for personalization projects, not one-off jobs Ultimately, automation is where the real payback will be
Graph Expo Chicago Sept. 24, 2000 Adding value in the face of trends that will change our industry Manage scope Choose a task that will create enough value to be worth everyones investment Get moving Maintain momentum Stay flexible as things change.