Heidelberg aims to optimize dialog marketing strategies with digital printingBy Luca Aloisi Dialog marketing remains a growth market despite or because of the economic crisis. Heidelberger Druckmaschinen AG believes it has found the key to even more successful one-to-one marketing in variable digital printing. However, Swiss dialog marketing agencies are still skeptical about this model.
"Digital printing is booming," said Heidelberger Druckmaschinen AG - or simply Heidelberg - in last year's company profile. At the shareholders' meeting, however, the world's largest provider of print media solutions had to announce a savings program amounting to 200 million euros in order to remain profitable. The share price, which has fallen to around half of its high for the year, reflects the business outlook.
But despite the economic downturn, the 152-year-old company is optimistic and on the lookout for further potential target groups. The latest target of its marketing efforts are advertising agencies and their printing partners. What their digital color press offers in almost offset quality must sound like music to the ears of the DM specialists: customized mailings using digital printing. A product that Heidelberg and Kodak launched as a joint venture in 2001.
Digital printing to promote long-term customer loyalty
According to Holger Reichhardt, Head of Marketing at Heidelberg, many players are still too little aware of the opportunities and competitive advantages of variable data printing. "Particularly in this day and age, when every marketing euro is discussed several times over, the focus must be on the efficiency of measures," said the CEO at a media event in London. There, Heidelberg presented the use of the digital color press as an instrument of a customer relationship management (CRM) strategy.
There are good reasons why the presentation was moved to the cosmopolitan city. Customized digital printing already enjoys a much higher profile in the UK than on the continent and is part of sophisticated DM strategies.
Duncan Stokes is Creative Services Director at Ogilvy One UK. He has already gained experience with variable data printing on the NexPress in his campaigns.
Stokes, whose agency runs an average of 50 to 60 DM campaigns per week, described two cases in which the local adaptability of an umbrella strategy was key. These included an assignment for the pharmaceutical multinational Glaxo SmithKline, which involved the Europe-wide introduction of a nicotine cessation program.
Noticeable cost reductions thanks to digital printing
From production hubs in Ireland and Holland, 14 million different support leaflets were sent out in eleven different languages to launch the product in six countries within six months and increase the quit rate among smokers from 3 to 10%. "In addition to demographic data, we also included data on personal smoking behavior, reasons for quitting, expected barriers and other points in the program," explained Stokes, explaining that this was not even the most difficult part of the seven-step program.
Eight Ogilvy offices had to constantly adapt the print workflow, timing, logistics, coordination and content to the respective circumstances. Looking back, he notes: "Processes and costs are 50 percent lower today compared to the starting year 1998. Back then, we were still working with conventional laser machines." He attributes this cost reduction to digital production technology, which has not only made dialog with existing and potential customers faster, but also more effective.
Stokes is convinced that digital printing could significantly optimize online dialogue, which has already greatly improved market communication, in terms of effectiveness and sustainability. The management consultancy Etronixx, Frankfurt, provided a CRM example from Cebit. Visitors to the trade fair were able to put together their own personal Audi TT roadster on the Internet using a car configurator. The next day, the individualized colour brochure with the relevant information was in the mailboxes of interested parties.
According to a study by Roland Berger Strategy Consultants, Munich, this form of permission marketing increased response by up to 300% in a pilot project. It is obvious that this not only suggests greater effectiveness and sustainability, but also greater customer loyalty and satisfaction.
Still a lot of convincing needed on the customer side
Even in Switzerland, where mass mailings to atomized target groups are associated with high wastage, the use of digital printing in the DM sector would make sense. If only there weren't hurdles such as unused database marketing, excessive data protection regulations and overcapacity in print shops that prevent cost-covering volumes in variable digital printing.
Ernst Schmocker, Head of Digital Sales at Heidelberg Switzerland, knows many marketing managers who are enthusiastic about the new solutions offered by the NexPress. However, he has only been able to install three machines since the market launch in Switzerland at the beginning of 2002. According to the business plan, ten would easily be possible under normal economic conditions.
However, it also seems illusory to him that advertising agencies will now jump into the sales gap and immediately acquire a new business model with the new printing technology. It is questionable whether agencies could produce mailings more flexibly, quickly and cheaply under favorable circumstances with the integration of printing. Guido Wietlisbach, Managing Director of Zurich-based Ogilvy One, sees NexPress most likely in the specialized customer service sector, "because such a system would extend the value chain too far, even for large Swiss agencies".
"Stick to your last," says Christian Hansen, Managing Director of Lowe Direct. His agency has often produced digital mailings for clients such as Qualiflyer and Orange. However, the agency's strength lies in a completely different area. As the overcapacity in the printing industry has led to a buyer's market, conditions are easier to negotiate, which means that "customers usually turn to the production service providers themselves," says Hansen.
Gilbert Fisch, Managing Director and co-owner of Switzerland's largest DM agency (Fisch Meier Direct), seems to be part of a minority that is taking up the cudgels for the increased use of digital printing in the DM sector. "For many traditional agencies, individualized offer mailings fail due to a lack of understanding of the additional work involved in their production," says Fisch, explaining the reluctance among agencies.
He is also aware of the enormous effort involved in customizing. Nevertheless, his agency is already working on corresponding pilot projects for customers, which he hopes will greatly improve value creation. However, he is not yet sure when the concept will become established. The change in awareness must first take place at the customer's end, which still requires a lot of persuasion, says Fisch cautiously.
Digital printing in Switzerland
The third NexPress 2100 goes into operation in Switzerland on November 1. Buysite, Basel, is the only provider in its region to offer individualized digital printing of small to medium and partial print runs with completely variable image and text content within hours. Other providers are: K2 Digitaldruck in Lucerne and Novoprint-Speed in Nyon. (la)