Link. The. A Letter from the CEO. Featured Content. Don Landrum, Chief Executive Officer, SourceLink. August Volume 11

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1 Volume 11 + August 2013 Link The Featured Content Postal Industry 2 News 3 Banking Trends and Insights Featured Blog: Marketing to 4 Millennials A Letter from the CEO Technology Drives Innovation At the beginning of 2013, SourceLink shared a list of ten predictions that will drive direct marketing through the year and beyond. So far this year, we are seeing great successes for our clients using new marketing technologies combined with more traditional direct marketing methods. We have had a very strong first half of 2013, and you, as our employees, are to thank for that. We look forward to a strong second half of the year, and projections are robust for the rest of We have been focusing energies on restructuring our technology and strategy groups to provide industry-leading services and an unmatched synergy throughout our internal teams. This more efficient structuring will benefit all of us, and our clients, as well. Our continued expansion of services and improvement of processes is already leading to extended engagements with some of our national clients, which you will read more about later in this newsletter. Our team is dedicated to monitoring the trends and promotions through the US Postal Service, and our emphasis on bringing our clients the most efficient postal processes and the lowest prices has never been more important. Additionally, we have expanded our website to showcase the direct marketing services specific to document and statement solutions, along with a special task force to assist our current clients and new ones with their document needs. Thank you for your hard work and contributions - without you, all of our success would not be possible. We hope you enjoy this edition of The Link. Don Landrum, Chief Executive Officer, SourceLink

2 2 Postal Industry News SourceLink postal experts, Rich Cicha and Dan Browne, share the latest news and promotions in the USPS Tech Credit Promotion Ever hear that when something sounds too good to be true, it usually is? In June, the USPS was floating a Full-Service IMb Tech Credit to the industry in the hopes of speeding up the conversion rate to mailers utilizing the full-service frameworks. In layman s terms, the USPS wanted to be able to raise postage in the future, taking into account the credit that they would have paid out through the Tech Credit promotion. Once the PRC rejected this concept in late June, the USPS had 10 days to decide if they really wanted to offer the credit. As it turns out, the answer was no. Postal Exigency - and what it means to you Not terribly long ago, the U.S. Post Office delivered mail twice a day, and up to four times a day for businesses. The financial strain this put on the Post Office called for eliminating multiple deliveries in People were upset. What will I do if I only get mail once a day!?! Well, most of us have been doing just fine. So it s ironic the number of people that are up in arms about possibly eliminating Saturday mail delivery. However, this cost cutting measure would have tremendous financial impact. So where does this leave the USPS? Unfortunately, an exigency request is a real possibility. What s an exigency request? you ask. Well, you re in luck, because we re going to tell you. In a nutshell, the USPS could seek an emergency override on the pricing structure, on top of what was already increased in January At this point, it seems that these changes won t take effect until 2014, but keep an eye out for the USPS Governors decision. At some point our financial liabilities become so large that they cannot be fixed without taking extreme action, Postmaster General, Pat Donahoe said in an interview with Bloomberg Businessweek. We don t want to get to the point where extreme action is the only option. The USPS is still a vital American institution that simply needs some adjustments to capitalize on its strengths. Shipping and package revenue grew by 4.7% in With a nearly 9% hike in package rates (on average) into 2013, the USPS will continue to get closer to financial feasibility, but it needs the support of the US legislators to do so. Start Truckin So what can you suggest to your clients in the meantime to save money on their mailings? Consider suggesting trucking qualified Standard Mail to an NDC (Network Distribution Center) or SCF (Sectional Center Facility), which could save $.033 per piece to the NDC and $.043 to the SCF, Also, mention taking advantage of presorting and automation discounts that SourceLink receives from being a full-service mailing services provider. Finally, the USPS has offered a variety of cost-savings promotions in 2013, one of which is right around the corner... Picture Permit Promotion, But Do It TODAY! Last year, the USPS announced a new program called Picture Permit, which allows mailers to use corporate logos, brand images or trademarks in the permit indicia. By using branded graphics within the indicia, the mail piece has a custom look and is more visually appealing to customers. This little picture in the corner of your mail pieces would usually cost an extra cent for each First Class piece and two cents for Standard. In an attempt to increase the popularity of the program, the USPS is offering a promotion where the mailer will not need to pay the additional fee during the promotional period of August 1st through September 30th. Speaking to our clients about the perks of receiving this indicia for free makes it a great time to experiment with utilizing more of the mailpiece s real estate, but you will need to move quickly like TODAY -- if you want to test this program at no additional cost. Go to to get started in the enrollment process, and even if you can t sneak in during the promotional period, picture permit indicia might be a nice avenue to pursue in the future.

3 3 What s Hot in Acquisition! By Tracey Miller Direct mail continues to be a key channel for checking acquisition marketers in This holds true for banks and credit unions of all sizes. If it isn t evident from your own mailbox, don t take my word for it - research using direct mail tracking databases like Competiscan and Comperemedia shows plenty of activity for the first half of According to Competiscan, direct mail volume is up approximately 10% for deposit products when compared to the same time last year. And, according to Comperemedia, checking account offers made up 55% of all bank acquisition mail in the first quarter. Some key trends so far in 2013: Cash continues to be the primary incentive for opening a new checking account. A majority of cash offers fall between $75-$200 A few banks offer an even higher cash offer for their high-end account. Research showed major banks offering $300 and $500 incentives To get a higher payout, some banks are using tiered offers based on layering products and services. Example $50 for completing a direct deposit and another $50 for completing 3 online bill payments A different type of cash offer is also popping up in the marketplace- the new customer can receive $1 per debit swipe up to a $100 in the first 90 days of account opening. Most cash offers are requiring one or more of the following actions to qualify: Direct deposit Debit transactions Bill Pay Online Statements Maintaining a minimum balance Relationship reward points seem to be flat in 2013, overall. Others are touting card rewards with additional bonuses if the card is tied to a qualifying checking account. The good old standby of gifts in the branch is still being used, albeit in most cases only in the smaller community-sized banks. Despite everyone predicting the end of free checking in , it still exists, and according to Comperemedia, it accounted for approximately 40% of checking acquisition direct mail in the first quarter of In March, a new player was introduced, Capital One 360, which touts a fee free account with the convenience to bank from anywhere with the bank s mobile tools. Players in this space should be paying attention, since they are hitting the mail heavy falling only behind Chase in total mail volume for For the 60% of mail featuring fee accounts, marketers are being sensitive and offering ways consumers can avoid the fee, such as maintaining minimum balances, performing a minimum number of debit transactions or enrolling in reoccurring direct deposit. As we head into the best checking acquisition months of the year, bank marketers should be mindful to not ignore their current customers. Onboarding and ongoing cross sell efforts are paramount to retaining the existing customer base. These programs are unfortunately often overlooked and result in poor household growth numbers at the end of the year due to attrition and account dormancy. Comperemedia cited a 32% decrease in customer communications in the first quarter of 2013 that, coupled with an increase in acquisition efforts, means if banks aren t talking to their clients current customers - chances are someone else is.

4 4 Featured Blog Millennials, The Greatest Generation and Direct Marketing By Matt Haskell I am (barely) a Millennial. Born in 1980, I rest on the cusp of what Time magazine recently profiled as the Me Me Me generation and described on the cover as lazy, entitled narcissists who still live with their parents. Guess which magazine isn t getting a Christmas card from me this year. Overall, the article has received a great deal of exposure and backlash because of the attention-grabbing, slightly hyperbolic title and the overarching assumptions that Millennials crave less responsibility, still live at home and are obsessed with themselves. I ve read many opinions on this feature that debate the statistics and accusations the article boasts, but the core of what separates the Millennials from prior generations is the advancement of technology during their (our) lifetimes. AdAge makes a troubling assertion (for direct marketers, at least) that Among other things, baby-boomer marketers need to accept the fact that Millennials have not inherited their parents love for the touch of paper. There is some truth to this statement, but as a Millennial that checks his mailbox every day, there is also a major balancing act that every marketer must accept in marketing to Millennials the same old tricks don t work anymore, they instead just work in different ways. Millennials may not crave the touch of the physical printed piece, but still will interact with it given the right pairing with technology. Whether this comes in the form of augmented reality, near-field communication chips, smartphone-based apps or QR code scanning, ways that allow this connected generation to interact with their mail and magazines using a smartphone or tablet will be key in keeping direct mail relevant to this generation. For example, I LOVE to get coupons in the mail, but I d like it even more if I could scan and save them to my iphone. The ideals demonstrated by Google Glass also give insight to how this generation will consume information in the years to come. Whereas the newspaper or Yellow Pages may be less relevant to a younger generation, the information contained within will not be. The past ten years have spawned the buzzword multichannel marketing, but Millennials are leaps and bounds ahead of the curve. They were raised on multichannel marketing. Television based off of their video games; magazines that point to websites; College acceptance letters that point to social media sites. This technology has never been new to them, so it has become an expectation in the way they do business and the way marketers HAVE to market to them. So there s another way Millennials are here to save us, they will push companies to try harder and smarter and the best, data-driven messaging will rise to the top. Marketers are taxed with using all of the data at their hands, especially from Big Data via social interactions and from employing advanced segmentation techniques in marketing to Millennials. Without these methodologies, messaging will be ignored, as it competes with the constant stream of stimuli coming from smartphones, s, social networks, television, postal mail, video games and soon with augmented reality and wearable computing. Visit the SourceLink website to view our new Document and Statement Solutions section of the site. In addition to expanded sections regarding print output, this section covers the many ways that banks, credit unions, healthcare providers, utility companies and more can harness technology in their customer communications. Stop by at

5 5 Understanding Customer Data is Key to Business Growth By Cindy Randazzo Tractor Supply Company (TSC), a Fortune 500 company, is the nation s largest retail farm and ranch store with over a thousand stores in 45 states. Our relationship began over three years ago when SourceLink won the RFP to build and maintain TSC s marketing database. Recently TSC renewed the SourceLink contract for another three-year term. Central to TSC s investment in building a new marketing database was their business objective of gaining a better understanding of their customers. Therefore, TSC s marketing database is the single truth of the customer across marketing channels and customer interactions in support of intelligence-driven marketing and their CRM strategy. TSC ticks off every box for being a great client: they buy everything, pay their bills on time and are a great reference, The relationship is strategic with SourceLink being the only non-tsc employee member of their CRM Strategy Committee. To the right is the progression of services and the resulting consistent year-over-year growth. Welcome to our New Team Members Robert Culley joins SourceLink as Director of Business Development with ten years direct marketing experience. Robert will be focusing on working with retail banks. During some of his tour in direct marketing, he also served a tour as a Dietician s Aid in the US Army Reserves. Robert graduated from Messiah College in Pennsylvania, and can also speak German. Willkommen, Robert! Mike Mancini joins SourceLink with 25 years direct marketing experience. Mike serves on the boards of the Tivoli group and The Mancini Butler Group. Mike thrives on change and rapid growth. He describes himself as success-oriented, positive, and innovative, all while keeping a sense of humor. We all welcome Mike to the team!