Lexmark 110, 720 manual Technology Adoption, CRM The Price to Pay for Getting Higher Response Rates

Technology Adoption

Study Demonstrates High

One-to-one Response Rates

One-to-one marketing can yield three times the response rate of a conventional direct mail program, according to an A-B comparison study conducted by the IIW Institute of Information Management (Dortmund, Germany). In the experiment, funded by NexPress, utility business customers were asked to enter into a one-year contract for both gas and electric utilities, ìprior to the liberalization of the gas market.î In the experiment, two of the four pages of the mailing piece used photos specific to the customerís industry classification. In addition, the customerís name was mentioned in two places, and the pieces were personalized with account and rate information. The personalized piece resulted in 104 contracts returned, a 15.5% order rate for Stradtwerke Dusseldorf AG, the utility (see chart). Conventional direct marketing pieces were mailed to 748 customers, and 40 (5.4%) returned a signed contract. A link to a 26-page summary report, Added-value Analysis of Four-color Digital Printing, can be found in the News Release section of the NexPress web site (www.nexpress.com). The link is part of a news release dated February 12, 2001, titled, ìOne-to-One Marketing Study: Personalized Content Boosts Success Rate Nearly 300 Percent - Feb. 2001.î

The personalized piece generated three times the telephone inquiry rate, as well. Forty-two recipients (6.3%) of the personalized piece called the company to ask about the program, compared to only 18 (2.1%) of those receiving a conventional marketing piece. The set of phone inquiries generated an additional 38 ordersó27 from those who received the personalized mailing, and 11 from those who received the conventional mailing. On a percentage basis, the follow-through order rate on telephone inquiries was

nearly equal for both groups.

In addition to providing compelling evidence of the effects of variable-data printing, the report supplies a step-by-step structure for tracking the costs and results of mailing programs. Further, the report provides a set of tactical considerations for those interested in using one-to-one marketing techniques.

CRM: The Price to Pay for Getting Higher Response Rates

The report recommends that variable-data marketing efforts be undertaken as a tool within a customer relationship management program (CRM): ìThe presence of a CRM infrastructure is thus a prerequisite and a starting point for further decisions, e.g., relating to the development of marketing campaigns and the technologies and service providers to be used for this purpose.î By assuming that companies should practice CRM anyway, the reportís authors are able separate CRM-related costs from the costs of using communication tactics such as one-to-one marketing. ìÖdecisions relating to communication channels, media and technology are independent of the basic decision to practice CRM. This also means that the costs associated with the basic CRM infrastructure should not be allocated to individual communication channels.î

Under the ìObserved Implementation Problemsî section of the report (page 20), the authors note that ìCRM is a marketing concept that pervades the entire company.î The IIW Institute of Information Management recommends that CRM be institutionalized and that ìdialogsî with customers populate database records. The cost consequences of implementing customer relationship management can be significant. Even if one can rationalize not attributing the costs directly to oneís marketing budgets, the company must still bear the cost, somehow.

Assuming that customer relationship management is instituted and those who are involved in customer

Distribution Notes

Announcement
Date	Vendor	Comments
February 28, 2001	Danka/Canon	Danka to market and distribute Canon CLC 5000 color copier/printers.
February 28, 2001	Danka/WorldCrest	WorldCrest, a provider of online procurement for goods and services, to offer
		Danka’s line of copiers and printers from Canon, Toshiba, and Heidelberg to its
		customers.
February 21, 2001	EFI/Pageflex	EFI to license Pageflex’s Mpower and Persona variable data software packages.
March 8, 2001	IBM/Exstream	IBM to sell Exstream’s Dialogue personalization software with its digital color
	Software	printers, including the InfoPrint Color 130 Plus.
February 12, 2001	Xerox/Pageflex	Xerox to license and resell Pageflex’s Mpower and Persona variable data software
		packages through its sales channels.

Page 16 March 2001