Technology automates production and amplifies impact of complex, targeted multipart direct mail programs.

By Trish Witkowski, Finishing Editor

Automated inline finishers contour-cut chaped mailers and inserts which draw more response. WPM uses theirs for mailing applications

What level of sophistication is required to keep up with the unique demands of complex, targeted, multi-part direct mail campaigns? After all, it’s an achievement to crease and fold a product automatically, but what if you need to fold, perf, glue, tip-on, trim, assemble and insert? Now, that’s a different story, my friends.

There are exciting solutions on the market today to automate just about every step of mail finishing. We’ll talk about them—and about the different ways that companies are approaching the decision to invest in smart finishing systems—and the commitment involved in achieving success and ROI from direct mail services.

Direct mail varies from conventional “spray and pray” postcards and mailers inkjetted and mailed to broad audiences, to targeted marketing using variable data that could involve letters with basic personalization, all the way up to complex custom image- and data-rich one-to-one integrated marketing campaigns. How these direct mail products are printed has everything to do with the level of personalization, job complexity and run length. The finishing solution must suit these varying scenarios.

“Most of our direct mail campaigns are done digitally on the HP Indigo or on one of our Kodak Digimasters,” says Kirk Larsen, partner, Graphic Partners, a print solutions provider in Zion, IL. But the first mailing effort in a campaign might be printed conventionally and inkjet addressed. “Once the client has more information about their audience, the follow-up piece will then be digitally printed and finished inline with one-to-one customization and image personalization using DirectSmile,” Larsen says. Graphic Partners recently purchased a Standard KAS 465HS inserter with four side pockets, intelligent high-speed feeder, 2D reader and folder (see p.37). “For us, direct mail is only one component,” says Larsen, with DirectSmile creating Web pages and orchestrating e-mails for cross-channel marketing that dovetails to printed efforts. “We had to get into intelligent finishing because of integrated marketing campaigns—we didn’t want to rely on a third-party to provide these critical services.”

What is “smart”?
“Smart” finishing for direct mail means combining multiple processes and the highly accurate assembling of multipart campaigns. “The value proposition is producing complex direct mail pieces—from white paper or preprinted roll to ready-to-insert,” says Mark Hunt, Standard Finishing Systems marketing director, work done “in one continuous production flow, at a high rate of speed, with no manual touchpoints, materials handling or added labor cost.”

Smart systems for printing involve JDF, but for direct mail, an end-to-end JDF workflow is a challenge. “Our presses, cutters, folders and stitchers are all connected,” says Michael Murphy, president of mail printing firm Japs-Olson, St. Louis Park, MN. “But in my opinion, the digital side and variable print side are not as advanced with JDF as the industry needs,” says Murphy, who is also chairman of the Mailing and Fulfillment Service Assn.

JDF definitely plays a role in mailing workflows, but the complexities of managing multipart campaigns and changing USPS specifications are of greater concern. Another valuable services to customers today involves management and efficiencies with regard to postal regulations and mailing. IWCO Direct, the Chanhassen, MN direct mail and printing services firm, offers customers dramatic postage savings and faster time to market through a proprietary IWCO Postal Optimization Strategy and Technologies and RideShare™ commingling and logistics management programs. “Our customers look to us for help with navigating the mailing process,” says Luke Teboul, VP IWCO Direct. “We take the most stressful and risky part of the business of direct mail, and make it a stress-free and cost-conscious experience for them—and they appreciate it.”

Solutions for finishing mailing are no longer hiding in the back room.

“There was a time not too long ago when a printer wouldn’t let you walk through their finishing department for fear of giving away their trade secrets,” says Scott Scheffer of of Scheffer Promotions, an exclusive agent for Scheffer inline/offline web finishing systems. “Inline finishing equipment is no longer secretive, one-off, or extremely expensive. The smart finishing equipment of today and tomorrow is mainstream, more affordable, reliable and profitable.”

For direct mail, one “sweet spot” is data services. With the generation of more and more data, clients are looking to direct mail services providers for help in entering or managing the data, interpreting it, tracking and reporting it. According to Graphic Partner’s Larsen, “It’s a business within a business—the demand for new direct mail services keeps popping up.”

Further upstream in the process customers need assistance with layout and planning, and advice regarding how to build a successful campaign. “We realized the importance of promoting and generating interest in the process which drove us to offer new upstream services,” says Scheffer. “Designers oftentimes can’t layout a complex direct mail product, and they are not aware of what options are even available to them. We offer templates, format ideas, production tools, and we can assist them with designing and customizing their projects. We can even introduce them to printers that can do the work. It’s a free procurement service that we offer through our Print Partner program.”

DM right for you?
So, all of this direct mail finishing technology is exciting and there is certainly money to be made in this corner of the print market, but is it a smart investment for the average PSP? Whether direct mail becomes an opportunity or an anchor depends upon your situation and your motivation.

“There are thousands of commercial web printers out there using the same equipment,” says Scheffer. “They are competing dollar for dollar on a commodity. They’ve invested millions in equipment and resources to try to win jobs that have a 5% markup. It’s sad. Printers need to be able to expand their portfolio and have the ability to bid on specialized work that has higher profit margins.”

Scott Scheffer’s statement makes a lot of sense, but there are many ways to specialize your offerings besides direct mail, and direct mail is a big commitment. “Direct mail may be the perfect success formula for one printer but a poor fit for another. Every printer today is thinking deeply about if and how they should diversify their offerings to stay profitable,” says Hunt. “Some decide to become ultra-efficient and compete as a low-cost producer, but this is probably a high-risk strategy. Others see great opportunity in rounding-out their business with mailing, bindery, CD-replication or creative services. In general, we see forward-looking companies testing the water with at least some ancillary services.”

Some companies are taking a more incremental approach to direct mail services, and they’re having great success with it. “We invested in UV ink a while back in order to be able to turn jobs quickly and in an environmentally friendly way,” says Ernie Seals, president of Franklin Press, a mid-size direct mail services provider with facilities in Memphis and Baton Rouge. “There are some really eye-catching effects than can be accomplished with dull varnish and gloss UV coating. We also added MetalFX capability, and on the digital side, DirectSmile has been a big hit.” When asked about the strength of his business these days, he offered “We have not been impacted by the recession and are continuing to hire people in both of our facilities.”

If you have built strong relationships with third-party vendors, it may be an easy way to test the waters before diving in. “Aligning with a vendor that has the same dedication, commitment and passion that you do can be very effective,” says David Bailey, Jr., President of Lithographics, a mid-size commercial printer in Nashville. “We don’t offer in house personalization, which takes some options off the table. However, we have several vendors that we are very comfortable with who can offer us this service.”

A relatively safe way to venture into a broader array of finishing services is to examine the needs of your current client base, rather than to imagine all of the work that might come your way if you had the capabilities. “Our way of getting into this was through clients who had needs others couldn’t meet. We saw some overlap and started working to provide solutions for them,” says Larsen.

So, where’s the cut-off? At what point does direct mail get complicated? “A small printer that wants to offer short-run mailings (say 500 to 5,000 units) can start with a relatively low-tech approach,” says Hunt. “Our only recommendation then is to use an inserter that is sufficiently flexible to quickly and easily changeover for different formats. When you step into higher volumes, variable data, integrated PURLs and more, you’ll necessarily need heavier-duty gear and an IT infrastructure to support the effort properly.”

The human factor
If an “all-in” approach is more your speed, proceed with caution, and do your homework. “I think mailing is a potential value-added stream for companies, but they must be fully committed before they get into it,” says Murphy. “There is a very steep learning curve-the postal issues alone require a deep level of knowledge. You cannot fake direct mail production. The Mailing and Fulfillment Service Association is a great association that has many resources to help companies that have questions.”

With direct mail, the general consensus among manufacturers and PSPs is that the equipment purchase is the easy part, and that more importantly you have to be sure that your company is prepared from a staffing and cultural perspective to truly see ROI and long-term success with this type of service.

“Unless you have somebody on staff dedicated to pushing the system to its full capabilities and finding opportunities, it never turns into anything significant. It needs to become a part of your corporate culture to promote and grow that part of the business,” says Scheffer. “Just putting equipment on the floor is not enough.”

As one could imagine, there are many ways to deal with staffing issues. Some choose to grow their work force, while others look for opportunities to partner or merge. “It is easy to buy equipment and software but much harder to find dedicated and competent people,” states Seals. “In our case, we merged with a mail house that had a great staff but no printing equipment. I would recommend a merger above trying to buy equipment and train people.”

While you’re evaluating the capabilities of your workforce, do not underestimate the importance of a trained sales force. “Looking back, we should have started the education process well before we even purchased the equipment. Transitioning a seasoned sheet fed-only sales force has proved difficult for us all,” says Bailey, who purchased a Scheffer inline web finishing system to expand their services into web, inline finishing and direct mail.

Kirk Larsen would agree. “Your sales force is critical. It is hard to find sales people with the special skill sets required to sell this type of work.” Kirk indicated that he felt they could get a lot more of the integrated marketing work if he could find more salespeople to sell it-but business is good. When questioned about their investment, he said “The investment in people, software and equipment is never-ending. It’s a beast that has to be fed-but it has paid off for us. In a down economy, we had a good year. Our clients are seeing measurable results from their direct mail campaigns and we provide them with the data that supports what they’re doing.”

To achieve success as a direct mail service provider, there is definitely a balance that must be struck between technology, personnel and service. Luke Teboul concludes, “Our ongoing investment in technology plays a key role in our high customer retention rate, but technology cannot be solely relied upon. The right workflow and people are essential to giving the customer a cost-effective, quality product. Technology gives our customers one critical element: choice. We have many different production solutions which ultimately means we can steer our customers to the right solution, and not the one that fits a certain piece of equipment the best.”

FREE WEBINAR: DIRECT MAIL TO THE MAX

Hear Witkowski in “Direct Mail to the MAX,” a free webinar hosted by IDEAlliance, March 11, 2010, 2:00 EST.

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