Jay Pontiac's Prompt Recovery and Data Structure

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1 Project: Segment: Direct Marketing/Lead Generation/Traffic Generation Program objectives Improve performance of expenditures on marketing activities. Develop more effective targeting of clients. Drive revenues through promotional pieces. Develop better tools for tracking the effectiveness of promotions. Significant results reported by user In 6 months Jay Pontiac profits increased from 12% to 18% Generated 75% of their business from "customer pay" activity versus industry average of 40%. This is important because it represents higher margin work and greater revenue. First campaign of 1000 has a response rate of 21.2% after 30 days and 28.8% after 45 days. 43.4% of recommended services were sold Customers continue to bring in reminders at time of service Overall the program provides: A higher level of personalization for dealership's customers in the promotions they receive. A marketing piece that also educates customers about vehicle needs, preparing them for future promotions. Lower monthly cost of marketing. Higher effort required by dealership to use the analysis, but this is compared to a lack of analysis available previously. Greater level of flexibility in how to approach clients. In-depth Case Study

2 Digital Print Case Study Profiles Vertical Retail Participants Client Jay Pontiac-Buick Bedford, OH, USA Ron Richnavsky Jay Pontiac-Buick is an automobile dealership located on the Bedford AutoMile in Bedford, Ohio. They have been serving the community for over 45 years. Print Provider Consolidated Graphics Group Cleveland, OH, USA David Minnick CGG is a fully integrated, technologically advanced graphics arts firm that provides clients with pre-press production, quality printing, direct marketing, and print-on-demand. Additionally, they offer Mediakeeper, a proprietary online system for CGG clients that provides a designated user a way to manage collateral via the Internet. Agency Prompt Recovery, Inc. Medina, OH, USA Jeff Scott, CIO Prompt Recovery is a variable data and one-to-one marketing firm, specializing in design, print, data management, and consulting services; serving the automotive dealership community for over 10 years. Equipment Hardware Xerox DocuColor 6060 Creo Spire RIP Software Microsoft Office tools Darwin QuarkXPress C++ (for proprietary development tools) FoxPro (for proprietary development tools) Program Target Audience Distribution Owners of GM vehicles with model years of 1993 or newer. Vehicle owners are current customers of the dealership that had been in at least once for "customer pay" service (non-warranty). Program runs a regular distribution schedule as part of an ongoing reminder program, mailing once every two weeks. Two mail drops were included in the data for this case study.

3 Date June 10 through July 30, 2003 Description Ron Richnavsky, the service manager at Jay Pontiac Buick, considers himself very aggressive in the promotion of his business. For years he had been investing in direct marketing and personalized mailing activities with a specific vendor. When Jeff Scott the CIO of Prompt Recovery came in to pitch their approach, Mr. Richnavsky said, "That would be great, if you can do it." His previous vendor spoke about personalization, but failed to deliver any but the most basic levels of direct marketing activity. Today, the Jay service department benefits from an incredible amount of information regarding customer service utilization and prescriptive needs assessments, as well as insights into the effectiveness of campaigns. As the first customer for Prompt Recovery, formerly known as CAResources, Mr. Richnavsky shared many of his insights regarding his needs and resources. He told the agency, "If you can deliver on the needs I outline for you, the contract is yours." Working from this challenge, Mr. Scott's organization began using information the dealership has concerning customer vehicle, repair history, driving habits, and time or mileage lapses between visits, to convey a customized message to each vehicle owner recommending specific actions that they should take. Mr. Richnavsky admits there were some slips early on, but the return on investment and the increased level of flexibility in marketing today greatly exceeds his original expectations. Based on the support by Prompt Recovery and cooperative marketing from the manufacturers, the Jay service department has seen profits rise to 18% within the first six months of the campaign compared to 12% in the prior six months. From a softer side, Mr. Richnavsky says, "I know the campaign is working every time I see a customer carrying one of the mailers into the dealership. Just this week, I have had three customers come in with promotional coupons that are tied to their birthdays. Clearly, it has an impact." One theme that carried through the discussion was the importance of data management to achieving the dealership's goals. Mr. Richnavsky noted a recent example where emissions service and parts ordering were dropping. Prior to this program, he would have gone through technician training on emissions, product promotions, and other solutions based activities because he lacked the data to understand why the drop was taking place.

4 Digital Print Case Study Profiles Description (continued) With the Prompt Recovery data management system, he was able to request a report that demonstrated significantly fewer vehicles had emissions checks due during the time period, therefore no problem needed to be solved. Alternatively, the data allows the dealership to educate customers about actions they should take. By regularly reporting on tire tread depth and brake pad width in the personalized communication, the dealership can drive customers to make inquiries or schedule specific maintenance for those services. Mr. Richnavsky notes that this relationship takes a lot more of his time. He has had to hire staff to perform a lot of work on the service side, but the increase in client activity and profits more than compensates for these demands. Agency Description Prompt Recovery provides data mining services and one-to-one marketing solutions for a variety of industries. Our specific area of expertise, noted Jeff Scott founder of Prompt Recovery lies in development of middleware applications that manage detail customer data with sophisticated creative designs to generate ongoing print programs for the digital print market. Custom data mining solutions that bridge the gap between digital printers and businesses. Consolidated Graphics Group brings a solution rather than product focused approach to the printing side of the equation. As David Minnick of CGG noted, Instead of printers taking products to the market, they need to spend time understanding the needs and challenges of their client, then provide the appropriate solutions. If applications of variable data tools are not matched to the needs and abilities of the client, they will fail. Value Proposition Based on prior experience with automotive dealerships, the Prompt Recovery team pitched a concept that would allow the service manager of a dealership to: Improve data management. Develop very specific targeting of promotions. Generate higher response rates to promotions. Lower costs by very targeted promotional activity. Track utilization of promotion materials (specifically coupons). All resulting in the effective management of customer data for higher levels of customer engagement. The greatest value of the activity is not in the print promotions. Rather, the benefit to Prompt Recovery and to the dealerships is in the effective management and tracking of the data. The process of doing performance checks, cleansing, and tracking the effectiveness of the data within the campaigns provides real and measurable results that both parties can gain from.

5 Actions and Timing of Sales Cycle In the prospecting of Jay Pontiac, the Prompt Recovery team directly approached Ron Richnavsky, the Service manager. In this instance, this is an effective approach, because Mr. Richnavsky is given a great deal of autonomy to operate the service department at Jay Pontiac. Within the first week after the pitch, Mr. Scott's staff went through a three-part analysis that laid the foundation for the campaign. Extracting customer and vehicle histories from the Jay service database allowed them to create their own data structures for reporting and analysis. These data structures would provide business intelligence for the client at Jay, but would also be the input for rule driven pieces personalized to targets as appropriate. Segmentation was the next phase to demonstrate functionality of this application. The Prompt Recovery team developed sample segments, for example; targets in a 10-mile radius of the dealership, pre-existing users that have not stopped in recently, users that come in for specific but not all services, etc. Finally, Mr. Scott presented prototypes of "what can we communicate to customers" based on two factors: data collected by the dealership and elements that will drive customers to higher levels of service utilization. Results in hand, the dealership has a firm impression of how the campaign will work and what it means to them. This was "go / no go" decision point. Mr. Scott realized that the month between purchase and implementation is a long wait without results. Therefore, he developed a "quick win" for the client. By processing the data by variable rather than by case, Prompt Recovery is able to prioritize and run preliminary queries that will immediately attract customers. Providing the dealership with a quick return, they avoid anxiety as complete implementation is finalized. During the two to four weeks of the cycle of production and implementation, the agency focuses on building out the functionality of the system. This involves two separate elements: creative development and data structure development. Separately, there is also an initiative to update image libraries to match every make, model, and hopefully color vehicle that is in the dealership's database. At the end of the development cycle, they are ready for production. One of the first significant realizations in pitching this offer is that it is better to start from the "top down" than "to build support up from the middle." Originally, Prompt Recovery targeted service managers and directors within the dealerships. This sometimes led to subsequent meetings with more senior dealership representatives. Today, the approach is to present the concept directly to the principal(s) of the dealership. Experience indicates that if the principals are interested, they will pull in all necessary parties on the spot to make a decision. With over 80 dealerships engaged, the approach is working well.

6 Digital Print Case Study Profiles Producing the Job Parameters: number of pieces, variable info, data base Personnel involved: (designers, database production, account manager, project manager) Systems: Hardware and software and particular applications Project Setup Workflow (design for variables, proof, database set up, etc.) Each piece is variable based on the image of vehicle, needs of the vehicle based on driver behavior, and prior utilization. Seldom will any two pieces be the same. Quantities vary by existing dealership client base and recent query activity. Typically, a query is run weekly to generate new print jobs. Pieces start as two-sided 12 x 18 printed in four-color. Trimmed to 11 x 17. Knife folded to 5.5 x 8.5. Shipped First Class mail. After the sale, the client account is handed off to a customer service account manager. Starting in the early phase of development, graphic designers are involved with the responsibility for guiding input and creative elements through to final product design. Once the process moves out of production to implementation, the customer service representative can run reports and develop materials for print activity. If at a later date special applications need to be developed, additional "coders" will be brought on board. Raw data pulled in from clients in text files is manipulated and formatted first though Microsoft products. This data is imported into database structures within FoxPro. These data structures are resident with Prompt Recovery, not the dealership. Queries against the data structures are conducted with C++ and SQL tools. Data streams based on these queries are fed into templates built in Quark and a Darwin add on. These data streams and the templates are then sent to the printer where they are run through Creo Spire RIP technology and are processed on a Xerox DocuColor Preliminary project database design takes place during the first week of a new account. More formal data structures are built over the subsequent month. These structures may vary over time as the data collection practices of the dealership change.

7 Producing the Job (continued) Pricing Production Workflow (data delivered in format, mechanism for delivery, data processed, print stream format, etc.) Structured or Components a. Weekly raw text file extracted by agency from the client systems. b. Raw data is manipulated and formatted first though Microsoft products. c. Microsoft formatted data is imported into FoxPro database structures. d. Data structures are mined with C++ and SQL tools. e. Query results are delivered in a data stream of CSV. f. CSV data stream is matched to the Quark/Darwin templates for proofing by Prompt Recovery. g. Spot checks in proofing are focused on two elements; confirm that rules based queries are functioning appropriately and reviewing strings. Proofing is done in a PDF file. h. Data streams in CSV and Quark/Darwin template files are transmitted to CGG. i. CGG generates proofs for review by dealership and the agency. j. CGG then runs print to finish cycle. Mr. Scott and the Prompt Recovery team came to Jay Pontiac, their first account, with a "price per piece" with their margin built in. Today, 80 accounts later, that price per piece still holds. Mr. Scott says, "Dealers have a clear expectation that the cost of a piece of paper to be mailed is, so we cannot vary from that." The profit and the opportunity for Prompt Recovery are in the management of the data and related activity. CGG pricing is based on each piece as a standalone. Because of the high levels of variability involved in the Prompt Recovery activities, they are technically and mechanically demanding.