Re-inventeration

September 6, 2009

Square-wheeled trike. Thanks to Jeff Atwood at www.codinghorror.com.

Square-wheeled trike. Thanks to Jeff Atwood at http://www.codinghorror.com.

If one happens to be a small business owner, especially if one happens to be the owner of a local printing company, the idea of re-inventing one’s business is probably pretty far up on the agenda these days. This is primarily because much of the business we all once enjoyed has suddenly just disappeared, as if by magic; or possibly due to the re-inventing of a much less cooperative economy.

Re-inventeration, a new word which Poor Richard thinks he has just coined, is the process of re-inventing something.  Of course, the whole concept is preposterous.  If something is invented the first time, does it really make any sense to try to re-invent it?

And it’s complicated. Re-inventeration is frought with Catch-22 scenarios. For those who have not read Joseph Heller’s famous book, the Catch-22 was the ultimate bureaucratic boondoggle.  Catch-22 (the book) told the story of Yossarian, a WWII B-25 bombardier and his squadron, as they were forced to fly increasing numbers of bombing runs over Italy.  The squadron commander, Major Major, literally embodied the concept of Catch-22. It was possible to schedule an appointment with Major Major at any time; however, one could only actually see Major Major if he was not in.

Similarly, if one was deemed insane, it was possible to get discharged from the Air Corps. Because Yossarian’s desire for discharge was deemed very sane, his insane behavior was considered by his superiors as a natural expression of his  true sanity. Catch 22.

Not unlike Yossarian, Poor Richard is struggling with the Catch-22s of the re-inventeration process at his downtown Macon Gralpharaphics shop (name carefully disguised to protect the sensibilities of the franchise). The first Catch-22 is simply time.  Business is down, we’ve cut back on staff, and more time is spent working in the business than on the business.  Without more time to work on the business, we’ll never be able to grow the business back to a point where more folks can be hired to work in the business; relieving the requirement for the owner to fold brochures until 2 am and allowing him to use his brain once again.

The next and more worrisome set of  Catch(es)-22 have to do with scope, the literal definition of the business. Behind the red awnings on Poplar Street, we’re taking jobs that we probably wouldn’t have looked at a couple of years ago.  A lot of these are small and risky.  The risk is that the expense in time and effort to produce the small jobs will exceed the revenue that results. Catch 22. The potential benefit is a new customer who might actually bring us a profitable job one day. Poor Richard is not sure how this one is playing out.

The low hanging fruit has been picked. We’ve responded to economic pressure on mainstay product lines by adding more products. In our case, we’ve added wide format printing and reprographics to subsidize some of the losses in conventional offset printing.   These were natural additions – similar products and services to what we were already doing. They didn’t disrupt the production process much and they added little in the way of expense. Unfortunately, they did not add enough revenue to compensate for the decline in conventional printing; and these product lines are also facing economic and competitive pressures. Catch 22.

So what’s the next step? Poor Richard has written before (with misgivings) about the current buzz-phrase in the printing industry. The latest rage is for printing companies to become marketing service providers. (See Poor Richard’s post Measuring Value). Our little company  is moving in this direction slowly but steadily, unsure of all of the implications, but with a sense that it is inevitable – there just aren’t many other areas of opportunity left.

Becoming a marketing service provider is full of Catch(es)-22. First, the whole notion takes us out of the realm of producing tangible products and into the area of shaping content. We’re no longer working with machinery that prints, cuts or folds stuff; but rather with electronic means of communication and the disciplines that go along with them – CSS, XHTML, Purls and a bunch of other acronyms. The competitive cost of entry into this business is low relative to the cost of a new printing press, which means that the pressure to keep ahead of the technology curve will be steep. Worse, the marketing service provider notion requires a new skill set that takes time to learn.  In our case, that’s the owner’s time that is in very short supply. Catch 22.

Second, the whole idea of shaping content laps over into creating content.  Printing companies are pretty good at shaping. We do layout work, color correct photos, even occasionally light editing for our customers. This is different from creating the content, an area we have generally avoided because of time limitations and a focus on keeping the machines running.

It’s just a little too hopeful to think that we might make money only by implementing marketing services — integrated direct mail and e-mail campaigns, for example. Most of our customers simply lack the time and resources to develop the content for this kind of effort, so it appears inevitable that we will be required to do some development work for them if we want to sell the services.

Hopefully we can do this without stepping on the toes of our agency customers and triggering yet another Catch 22. Ideally, the agencies might find it helpful to use our shop to implement integrated direct mail and internet campaigns for their larger customers. Our challenge will be keeping the focus on implementation (and measurement) of specific marketing services without getting customers confused about what we can do (and want to do).

Creating content, even on a limited basis, is a big step for a small printing company; but it is still a lot different from the conceptual work that our agency customers do. We can make that statement, but will our customers understand it?  Another Catch-22.

Poor Richard supposes that re-inventeration, like change, is necessary and unavoidable; but he hopes he’s not re-inventing a square-wheeled tricycle.


Direct Mail and the Internet

August 10, 2009

So it’s no great mystery why mail volume, including direct mail (advertising) volume is down and the USPS is in a bind. In the last post Neither Rain, Nor Snow, Nor Dead Economy, we went over some of the dismal numbers that the USPS has “posted” in recent months. The financial strain of the recession has accelerated the move of content online, where the costs are less. Printers and the USPS are suffering.

So, is there still a place for printed direct mail in the mix? Let’s turn to the USPS again.  In a surprisingly insightful brief entitled Mail and the Internet, the postal service presents a convincing case for a combination of print mail and online advertising. Here’s the thrust of the argument:

In fact, recent studies by the U.S. Postal Service and a number of independent research groups found that consumers — even heavy Internet users — continue to view mail as a highly relevant and significant part of their lives. It provides a physical and tangible quality consumers find lacking in their electronic communications. But that’s not all. The studies also showed that mail, working side by side with digital media, can have a substantial impact on the use of commercial Web sites.

Much of the specific content of the brief deals with the integration of email, online storefronts and conventional catalogues, but the USPS makes a couple of key points regarding the combination of conventional mail and email in the marketing mix:

  1. While email has outpaced mail as the primary form of (written) personal communications, readers are much more likely to “trash” marketing emails than conventional mail pieces. People still enjoy opening the mail.  Junk email is a nuisance.
  2. Conventional mail is a very effective way to get permission to send an email.  In other words, direct mail is a great way to get potential customers to subscribe to emailed news briefs or promotions.

From here, it’s tempting take on the ROI argument and search out some spurious data to try and prove that the return on investment for conventional direct mail is actually higher than the ROI for an email campaign.  Poor Richard thinks that’s a worthless effort, but can state uncategorically that the ROI for a  well-conceived direct mail or email campaign will always be higher than the return for a poorly implemented campaign of either type.

Nor is it useful to argue that direct mail and email are apples and oranges. They’re more like white grapes and peach . . . the juice goes together really well. And there is great potential to combine conventional mail, email and other online communications to improve the total ROI for the combined efforts. Conventional direct mail combined with personalized URLs (PURLs) provide a great method of sorting through an inexpensive direct mail list for those who are really interested in a product or service.  Respondents sign on to a landing page, where they can ask for direct contact or for more information. They might also be asked if they’d like to subscribe to an e-newsletter or for periodic special offers.

The net result is that more money and attention are focused on those who are most interested (and most likely to buy something) and less on those who aren’t interested. Even more better, you get to measure. While it is possible to partially measure response from conventional mail campaigns with BRMs, coupons or a tracked phone number, the integrated print and email campaign generates better measurable data from the landing page . . . including names and addresses of those who respond. And if they subscribe to an e-news brief or some other such offering, they’re actually asking you to stay in touch.

Back to the USPS and the printing business. Regardless of the trends, there will remain a very real need for the postal service in the foreseeable future. While it’s easy to communicate online, you need a Star Trek transporter to actually send stuff through cyberspace. Similarly, the tangibility and portability (and disposability) of print gives it an advantage over electronic media in many situations. I haven’t seen them passing out Kindle’s at the theatre, yet.

Poor Richard can’t speak for the future of the postal service, but the the technology to produce and manage integrated electronic and print communications is very available. We’re even playing with it at Gralpharaphics (name changed to protect the innocence of the franchise). Not to say that the change isn’t painful.  It was certainly easier for printers when print was king. But change is inevitable . . . and Poor Richard isn’t really ready to become a dinosaur yet.


Neither Rain Nor Sleet, nor ?

May 3, 2009

A Summer Sale.

That’s what the subject line of the email stated.  I nearly clicked the junk button, but a quick glance at the sender held my attention.  DMMAdvisory.  Wait a minute, that’s the U.S. Post Office.  They don’t have summer sales . . . what’s up here?

mad-letterDMMAdvisory is the USPS email link to keep mailers informed about all sorts of goings on at the Postal Service.  The DMM is the domestic mail manual.  Actually, I think it’s the domestic mail manuals . . . there’s a bunch of them (if you’re curious, you can look at ’em here).  Usually, the DMMAdvisory is all about new rules that are going to be issued because they’ll make the USPS more efficient or rescinded because even though the USPS will be more efficient, everyone else will be less efficient.  The Advisories also talk a lot about Intelligent Barcodes, Move Updates, and services like PostalOne!, the online portal where mailers like AlphaGraphics are supposed to enter in all of their mailing data to make the USPS more efficient.  And we’ll be glad to do it, too . . . just as soon as the USPS figures out how to make the website work.

I’ve never seen a DMMAdvisory that talked about a summer sale. I got kind of excited about that, thinking maybe this was something we could use to promote mailing services. So I clicked on the link to find out about it. What I got was a 32 page .pdf document.  The USPS doesn’t advertise a sale, you understand, they file a Notice with the Postal Regulatory Commission. That kind of advertising wouldn’t get results for the rest of us, but apparently it works for the USPS.

Poor Richard, feeling brave, waded into the document. The first important fact I discovered is that Standard Mail is an important investment for American business and that it is incumbent upon the USPS to encourage American businesses to invest:

The current state of the economy has forced businesses, particularly Postal Service customers, to pull back on important investments necessary for ensuring their continued prosperity. The precipitous decline in the use of Standard Mail for marketing products and services is an illustrative example of the unwanted choices many postal customers have had to make because of the economy. The Postal Service believes it can, and should, find ways to help its customers increase their use of mail during these challenging economic times (pp. 1 -2).

On p. 3, Poor Richard discovers that the sale will run from July 1 to September 30.  A 30% discount for 3 months, that’s some sale! Oops, not so fast . . .here’s a catch on p.4:

The “Summer Sale” program will run from July 1, 2009, through September 30, 2009, and will provide a 30 percent rebate to eligible mailers on Standard Mail letters and flats volume above a mailer-specific threshold. The threshold is calculated by taking the percentage change between a mailer’s postal fiscal year-to-date (October 2008 through March 2009) volume and the volume mailed in the same period last year, and applying that percentage to the volume the mailer mailed between July 1, 2008,
and September 30, 2008.

So, the deal’s not so sweet.  The 30% discount only applies to the increase of mail volume in relation to the ratio of last year’s to this year’s mailings from October to March, factoring in of course the projected daily volume of pork belly contracts in the same period and the average shoe size of a U.S. mail carrier.

Reading on, Poor Richard discovers another hitch:

Qualifying mailers must be able to demonstrate volume of at least one million Standard Mail letters and flats, between October 1, 2007, and March 31, 2008, for one or more permit imprint advance deposit account(s), precanceled stamp permit(s), or postage meter permit(s).

This is looking less like a sale to Poor Richard. One million Standard Mail letters effectively rules out 100% of my customers. In fact, it probably rules out 99.9% of the mailers in South Georgia. And reading further:

Mail service providers (MSPs) are not eligible for the program.

It also rules out mail service providers, like AlphaGraphics; who if they might be large enough to aggregate and mail a million pieces of mail or so for their  customers and wanted to promote mailing services and pass along a little discount, would not be eligible to participate.

“Not a sale at all,” thinks Poor Richard.

The next couple of pages communicate the Postal Service’s intent to contact eligible mailers by letter and then direct them to a website to register to participate in the summer sale. The projected additional revenue for the USPS from the sale is between $38 and $95 million with costs at around $1 million to administer the Summer Sale.  A respectable projection of return, but qualified with this statement:

In particular, an overestimate of the additional volume generated by the incentive or an underestimate of the administrative effort required could unfavorably affect expected financial performance. (p.7)

Unexpected costs related to the malfunction of the response website are also presumably not included. The remaining 23 pages of the .pdf file encompass further justifications of the US Postal Service’s desire to try a “sale,” the regulatory provisions which allow them to do so, why the Postal Regulatory Commission should approve the request, and 17 pages of appendices that detail applicable postal rates, projections on pork belly contracts and historical data pertaining to the average shoe size of a US Postal Service Mail Carrier.

Poor Richard might humbly suggest that if Standard Mail is indeed in “precipitous decline” (and I have no doubt that it is), this proposal is unlikely to rectify the situation. I might also point out that a rate increase is scheduled for May 11 that will presumably do little to reverse the decline or encourage postal service customers to “invest in their continued prosperity” through a return to conventional mail.

Mail volume, like print volume, is decreasing; but there remains a need and demand for both services, at least in the near term. Mail has come under competitive pressure since the introduction of the telegraph, but in today’s communications environment, the pressures on both mail and print are extreme.  Barring a collapse of the Internet, mail and print volumes will continue to decrease. That said, there are still applications where printed mail is the best solution. Direct mail is demonstrably more effective with the 45 and over age group (dinosaurs like me, irrespective of Facebook enrollment). E-mail blasts will never have the impact of a well-written letter, especially if it is personalized.  Even “junk mail,” because it is tangible, has measurably justifiable place in some marketing campaigns.

Because the cost to disseminate printed mail is  higher than electronic communications, it is necessary to justify its value.  Specifically, this can be measured as ROI (return on investment) in any campaign.  It is also important to make it easier for customers to access and understand both printing and mailing. Poor Richard thinks that the US Postal Service is not succeeding in this area. Recent changes to the postal code (Move updates and the IM barcode) have been cumbersome to implement, difficult for mail service providers to understand, and completely inscrutable to our customers.  These changes have not really provoked anger among USPS customers, because they expect this kind of clumsiness, but the customers are very definitely not encouraged to increase their volume of mailing.

Perhaps the USPS should consider doing something proactive for their customers to encourage them to continue to consider mail as a viable means of communication.  Do you think a sale would work?


The Pleasure of Paper

January 26, 2007

(Or the Antiquated Arts of Reading and Writing)

I can’t stand reading from a computer screen. It is a strange bias for one who very much enjoys writing online, but perhaps understandable given my occupation. I have a predilection for the printed page.

As a society, we have lost the art of correspondence. There was a certain grace and formal style associated with letters that has been obliterated by the terse, staccato e-mail burst. E-mail is suited to the communication of a message, but not emotion. It is artless, blunt, and sometimes awkward.

Are corporate communications moving in the same direction? We have lost several good printing projects that have “gone electronic.” Converting a newsletter to “electronic media,” is usually justified as a cost control measure. Poor Richard maintains that the control of cost also significantly limits the impact and effectiveness of the publication. The electronic message simply doesn’t come across as clearly and the audience is limited by the media.

Typically, the “electronic newsletter” is transmitted by email to the potential reader. You may argue that the potential audience is tremendous. But, if the sender is not registered by the reader’s email client, many of these transmissions will be automatically junked. Others will be deleted by the reader. Still others will be filed away and never seen again. Some small percentage will be viewed by the intended reader. The cost control measure will be successful to the extent that some of the readers will print the newsletter out on their own laser or inkjet printer, thus incurring the cost of print production themselves. Quality control of the final product, in this case, is out the window.

Posting on a website is another cost effective alternative, but the limitations are equally significant. Again, the audience is potentially large. But readers must come to the site voluntarily. It does not land in their hand. Even then, websites are not the ideal media for conveyance of complex ideas or information. The typical reader scans a website. He may peruse it. He does not read it closely. An occasional reader may print the page. In this instance, the publisher has again succeeded in passing the cost downward, and again abdicated his control of the appearance and impact of his publication.

Paper is tangible and transportable. An argument could be made that a laptop is equally so. But, paper doesn’t require batteries or an AC adapter. I will grab a magazine or a newsletter and read it if I have a spare 5 minutes. I will not crank up my Powerbook for the same purpose. I will never read a book online, and I can’t imagine how anyone else could even consider it.

To my female readers . . . you are kindly requested to skip or disregard the next paragraph.

One of the strongest arguments for the perpetuation of the printed page is the habitual male practice of “constitutional reading.” Men, what do you take along with you? Will you grab a newspaper, a magazine, a newsletter? How many of you out there are actually taking your laptop into the privy and checking your email or a website during the morning break? Admit it, this is where you absorb a lot of information. Newsletter publishers, will you give up this important audience in the name of cost control?

Female readers may return to the post here.

You may think that it is somewhat hypocritical to complain too intensely about the very media I am currently using to transmit the written word. You have a point. Let’s face it. I’m not conveying highly important information here and I’m not really trying to sell anything, either. I enjoy the creative outlet that these posts allow. Frankly, I was surprised to find that a few people actually do read them.

AlphaGraphics will be sending out a newsletter and some of this stuff may be in it. It will be tangible, colorful. Our customers will receive printed issues by mail. Some of them will be thrown away. Some will wind up in Pile #3 on the marketing manager’s desk. Some will be read from cover to cover. And others will wind up in a wonderful place . . . on top of the toilet tank!


Ordering Scallops Online

December 24, 2006

mailbox.jpgI thought briefly about opening the email from Herron Mole. The sender name wasn’t really very creative, but the subject line, “Scalloped!” caught my attention. To me, the names and subject lines that accompany junk e-mail are just as fascinating as the subject matter isn’t.

Here’s one of the best ones I’ve received lately: Remuneration P. Linoleum. I wonder what the P. stands for. I suspect that he is kin to Transforming R. Pachyderm, another of my favorites. One of my acquaintances informs me that these unusual epithets are created by some sort of random name generator. This does little to satisfy my curiosity; it only makes me wonder about the warped brainpower that could program such a thing. It’s like the IRS. What if you took all of that energy and manpower and focused it on something productive?

Spam is about as non-productive a venture as can be conceived. With the sheer volume of it out there, it’s hard to imagine that a mass junk e-mail could ever produce any business. It does definitely obstruct business, especially in a line of work like printing, where proofs occasionally get mistaken for digital junk. But it’s difficult to suppose that even the most deranged hacker could get much satisfaction, fame or return by adding his junk (even by the thousands) to the millions of unsolicited missives zooming through hyperspace.

There was a time when printers were very concerned about e-mail marketing as a threat to direct mail. Direct mail, even for a shop the size of AlphaGraphics, represents a chunk of business that we could not do without. Most of ours takes the form of letters and postcards. A lot of the volume is from schools and non-profit agencies who communicate with parents, prospective students, donors and supporters.

Admittedly, there is a nuisance factor to direct mail. We order odd-sized boxes and packaging supplies from a very good company, U-Line. Over the years, we’ve ordered a lot of stuff from them. I would love to be their printer. AlphaGraphics receives catalog after catalog from them. We keep one around to use as a reference for orders and throw the rest away. We just don’t need an additional catalog each week by mail. U-Line could save a lot of money and reduce their printing costs by sending a catalog every 6 months and a postcard every now and then telling us that a sale is running.

The good thing about direct mail is that it is ultimately governed by economic rules that (obviously) don’t apply to spam. Direct mail has to produce a return to justify the investment. And it has to be well conceived to produce a return.

We can always tell when a mailpiece will be a one-time run. Generally, the printed piece is poorly crafted. The message is not clear and there’s too much information. The mailer thinks that every recipient will read every word, so they pack paragraphs onto a 5 1/2 x 8 1/2 postcard. Wrong. It won’t work. There will be no response to the mailing.

And then there’s the mailing list. A similar attitude can prevail. The mailer thinks, “We’ll send this mailing out to everyone in town, because they’ll all want to read it and place an order.”

Wrong again. The result will only be that more people will throw the mailpiece away. Even though we might get one large mailing job, the end result is ultimately bad for AlphaGraphics. We’d much rather do regular targeted mailings that work for a customer than a massive mailout that flops. And somehow or another, the failure always seems to rub off on us a little. Shoot the messenger. Blame the printer.

Here are some tips for effective direct mail campaigns:

  1. Keep it simple. Make the message easy to understand. Aim for an impression. Most of the impact of direct mail is like mortarfire. It softens the ground and makes the customer more receptive to your other selling and marketing efforts.
  2. Target. Fire rifle shots, not shotgun blasts. Keep a comprehensive customer or audience database. These are your best candidates for a response. Use narrow criteria for purchased lists. Printers and mail houses have some interesting sources for specialized marketing lists. If you run a wedding-related business, mail to subscribers to Bride magazine in the 312 zip area instead of all households with women between the ages of 18 and 25.
  3. Personalize. It’s pretty simple to merge name data into the message on a postcard. It’s even cooler to send customized versions to different customer categories.
  4. Make an offer or a call to action. This is the equivalent of a salesperson asking for the order. Give the potential customer a reason to respond.
  5. Repeat, Repeat, then repeat again. The impact of the first mailing will always be weaker than the fifth. Responses and resulting sales grow as the direct mail message is repeated and built upon with subsequent mailings. Refine the target list, but make sure that the best prospects receive regular communications.
  6. Follow up. Integrate direct mail into the rest of your selling and advertising efforts. If it is possible or practical, have a human being follow up with the potential customer to ask for an order or at least gauge interest.

I did think briefly about opening the email from Herron Mole. I doubt I’ll ever here from Mr. Mole again, though; and I’m not sure that I’d buy scallops from him. I’d only order seafood online from a reputable, established company; one with enough financial wherewithal to send me a postcard or two. Mr. Mole, if you’re really out there, call us . . . we can help.