VOL. 2. Behold. the value. color. Color is attitude, motivation, inspiration, power, and influence. So why are you still printing basic black?

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1 VOL. 2 of Behold the value color. Color is attitude, motivation, inspiration, power, and influence. So why are you still printing basic black?

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3 Colors are associated with every human emotion, with countries and causes, with companies and brands. Color evokes strong reactions, and has the power to compel, influence, motivate, and inspire. And it just plain looks a lot better than black and white, especially when it comes to the printed page. While the spectacular photography of artists like Ansel Adams is successful in black and white, the majority of documents we see have at least some color. Following the lead of USA Today, many small local newspapers now have some pages printed in color and even those bastions of monochrome, the Wall Street Journal and "The Gray Lady," The New York Times, now use color on their front pages and in some daily sections. According to various independent studies, The Value of Color comes in readability, response time and purchase likelihood. These traits are especially important in certain business-to-business and business-to-consumer applications. 1. Direct mail coupons, special offers, and promotions 2. Transactional documents such as statements, bills, and trade confirmations Making these day-to-day documents more readable and visually appealing is the beginning of the Value of Color. The Value of Color Repeated independent studies indicate color printing Is 55 percent more likely to be read first than black and white printing. Improves response time by up to 30 percent. Increases likelihood of purchase by as much as 80 percent. So why are you still printing in BASIC BLACK?

4 Way The it s been. Direct mail has long been personalized with the recipient s name, but the material inside is rarely customized to the individual. Direct mail documents range from low-quality offset printing on cheap paper to magazine-quality printing on glossy stock. Color usage ranges from a couple of spot colors and black to full four-color process. Even with basic name and address personalization, most direct mail documents are sent out in large quantities and response rates are measured in fractions of a percentage point. Typically, a response of just one percent is reason for celebration. Two or three percent is cause to break out cigars and champagne. Meanwhile, the 98 percent of people who didn t respond threw the mail in the trash. With so much waste involved, the need for low-cost production is obvious. Unfortunately, low cost, color and customization have been mutually exclusive terms. Until now. Transactional documents usually contain personal account information and so have always been "customized" at the individual level. They typically use either black and white electrophotographic printing on plain paper or a single spot color and black. The spot color is often a corporate hue dressing up an otherwise bland page and is prepared as a preprinted form onto which laser or LED printers print variable and static data using black toner. As detailed in the Scitex Digital Printing white paper, Beyond Filling in the Blanks, this can be an expensive option. Some companies have recently begun incorporating marketing and CRM (Customer Relationship Management) messages into their transactional documents. In a handful of sophisticated examples the message is targeted to the recipient based on database information, but more often a generic message is added in a single spot color or black. Although this approach takes advantage of neither variable data nor color, it opens the door to vast potential: while most direct mail may be destined for the trash, virtually everyone opens and reads their bills, statements and other transactional documents. This makes space on these documents prime real estate (Location! Location! Location! in realtor-speak) for marketing or CRM communications. Color has the power to influence, motivate, and inspire. And it just plain looks better than black and white, especially when it comes to the printed page.

5 changing The model. Digital printing has been slowly changing transactional and direct mail documents for several years and there are plenty of anecdotal examples of how color and variable content have proven a highly successful combination. Many of these success stories can be found among the "Best Practices" examples at the web site of the Print on Demand Initiative, a non-profit institution focused on fostering the overall growth of digital printing. PODI s Best Practices stories show how specific applications have been successful, but are often criticized as lacking broader statistical veracity. To help quantify the value of both color and variable data printing, Frank Romano of Rochester Institute of Technology and industry consultant David Broudy conducted a detailed quantifiable study with several variables in mailings to businesses and consumers. The results of the study (see Color + Customization = Power on the next page) are clear proof of the value of digital color printing, especially when teamed with personalization and customization. The barrier, though, has been affordability. Color printing, of course, will always be more expensive than monochrome printing. Depending on the machine, the wholesale cost-per-page for production-grade color laser printing ranges from about 5 cents to 25 cents, with image quality ranging from mediocre to excellent. As a result, relatively few marketers or their companies have adopted the technology or used color only on short print runs for their highest-value customers. This minimizes the cost and perceived risk along with the opportunities for notable success. But suppose you reduced the cost of color printing and combined it with the long, variable content print runs of transactional printing? With favorable economics, the Value of Color could be readily incorporated into far more of the documents businesses produce every day. Think of it as Business Color. Using digital color printing for only high-value customers minimizes the cost and perceived risk but also the opportunities for notable success.

6 color+ personalization = POWER A STUDY by Frank Romano of the Rochester Institute of Technology and David Broudy, a Southern California designer and production consultant, provided a controlled, measurable test of the value of color and personalization in printed materials. The study comprised separate mailings of a variety of direct mail offers to both business and consumer audiences, each testing the value added by color, basic personalization and use of database information. All materials were professionally designed and produced using digital printing. The static and dynamic pieces were as similar as possible. All mailers had two methods for response: a toll-free number or a postage-free reply card. Sent to both business and consumer audiences, the study consisted of nine programs in four categories 36 mailings in all with each mailing comprised of 4,000 pieces. Everything was mailed bulk rate as self-mailers. When the mail stopped moving the results clearly demonstrated the value and power color and variable content add to documents. Mailing One Using generic, black and white text and photos, the first mailings had a response rate that averaged 0.46%. This is below the often-quoted industry standard response of 1%, but may actually be closer to the real industry average. Mailing Two Adding the recipient's NAME, the most basic level of personalization, raised response rates over Mailing One by 44%. Because adding a name is relatively easy to do--and has been done for nearly two decades merely adding a name to a mailing no longer has the power it once had. In this test, though, it did have a positive effect. Mailing Three Adding FULL COLOR to a static document increased response rates by 45% over Mailing One s static, black and white mailing. Romano and Broudy were surprised this level of response was nearly identical to that of basic personalization, but even more surprised that color alone could have such a positive effect. This begins to indicate the potential value of adding color to documents. Color adds eye-appeal and makes a document more visually interesting or compelling. And the more people who actually look at document particularly a direct mail piece the more that are likely to respond. Mailing Four Using both FULL COLOR and the recipient's NAME increased response rates by 135% over Mailing One s static, black and white mailing. These two features clearly get recipients' attention and encourage response. Mailing Five In the final test, using NAME, FULL COLOR and applying DATABASE information in constructing the offer increased response rates by over 500%. Tying knowledge about the recipient-past buying habits being the most common provided a significant benefit in this study. Of course, the database information should be used in such a way as to not threaten the recipient s privacy. As Mailing Five indicates, good customer intelligence and full color graphics make a formidable team. Source: Romano & Broudy study for Digital Printing Council ( Searchword: direct mail responses).

7 Broudy The Romano study. The Broudy/Romano study tested response of static (no personalization or customization) and dynamic (varying levels of personalization and customization) promotions for both business-to-business and business-to-consumer products. The test was done in conjunction with a direct-mail marketing organization and response was tracked for five months. For a copy of the study, go to and use search word direct mail response. Business-to-Business A. Business books and videos Drawing from a database containing information on purchasers of business publications and videos, the static mailing offered a variety of products, while the dynamic offering incorporated products based on previous purchases of marketing, management and finance books and videos. B. Phone services Using a database of cellular phone expenditures, the marketing program was intended to convert users to a different plan. The static offer used sample rates while the dynamic mailing used rates based on the recipient s actual usage. Business-to-Consumer C. Home videos A database with three categories of video rental data (western, comedy and drama) was used to generate a static offer of a variety of videos and a dynamic offer based on the recipient s rental habits. D. Supermarket buying Drawing on a database showing the products and times of supermarket purchases, a static offering version promoted a variety of in-store products. Much more targeted, the dynamic mailing considered buying patterns and promoted products relating to baby needs, young families, and healthconscious shoppers.

8 The test involved nine programs in four categories a total of 36 mailings with each mailing including 4,000 pieces. The mailings for each of the four categories were: 1 Static promotion. The marketing piece had no personalization. The piece was addressed to a specific individual. Black and white. 2 Name-only personalization. The marketing piece incorporated the person s name. Black and white. 3 Version 1 above in full color. Static promotion. The marketing piece had no personalization. 4 Version 2 above in full color. Name-only personalization. The marketing piece incorporated the person s name. 5 Dynamic promotion with database connection. Using information about buying patterns, the marketing piece reflected some aspect of the individual s purchasing history. Black and white. 6 Version 5 above in full color. Dynamic promotion with database connection. Using information about buying patterns, the marketing piece reflected some aspect of the individual s purchasing history. 7 Version 1 above with a discount coupon. Static promotion. The marketing piece had no personalization. We were curious to see if a specific discount would have an effect on response rates. Black and white. 8 Version 5 with a discount coupon. Dynamic promotion with database connection. Using information about buying patterns, the marketing piece reflected some aspect of the individual s purchasing history. Black and white. 9 Version 6 with a discount coupon. Dynamic promotion with database connection. Using information about buying patterns, the marketing piece reflected some aspect of the individual s purchasing history. Full color. responses. The Graphics comparison of responses from the above nine programs. Business-to-business 20% 20% 15% 15% 10% 10% 5% 5% 0% a 9b 0% a 9b A. Business books and videos A database contained data on purchasers of business publications and videos. The static version had a variety of products. The dynamic version incorporated products in one of three categories: marketing, management, and finance based on previous purchases. B. Phone services A database contained data on cellular phone expenditures. The objective of the marketing program was to convert users to a different plan. The static version had sample rates. The dynamic version used rates based on the recipient s actual usage.

9 responses. The (CONTINUED) Business-to-consumer 20% 15% 10% 5% 20% 15% 10% 5% 0% a 9b 0% a 9b A. Home videos A database contained data on video rentals in three categories: western, comedy, and drama. The static version had a variety. The dynamic version only had products based on the recipient s purchasing habits. B. Supermarket buying A database contained data on products and times of supermarket purchases. The static version promoted a variety of in-store products. The dynamic version analyzed buying patterns and promoted products that related to three areas: baby products, young family products, and health-related products. Business color. Business Color using the VersaMark family of digital printers from Scitex Digital Printing is the practical, cost-effective, high-volume alternative to the high-end graphic arts color printing of offset presses and near-offset quality digital presses. This encompasses the broad range of direct mail applications and transactional documents that are making the shift to color. More significantly, Business Color is the ideal solution for emerging hybrid applications combining transactional, marketing and CRM applications in a single document. Printing these documents in Business Color makes them more attractive, improves readability and response, and conveys information more effectively. And it makes full-color variable data digital printing accessible and affordable for high-volume applications that cannot be produced economically on toner-based digital color print engines.

10 Business color. (CONTINUED) For example, consider a mobile phone company. These firms send out detailed bills every month, usually printed in two colors on pre-printed forms. They also send out separate, generic full-color direct mail offers for new service plans, phones and accessories. Every customer gets one, and nearly all are ignored. But if these mailings were combined their total cost would drop dramatically. And since each customer would see the special offers with their bill, response rates would likely increase. Now take it a little deeper. Many mobile phone customers can already access their usage information on the company s web site to help decide whether to change calling plans or learn about a new phone with more advanced features. Based on criteria such as usage patterns and service agreement expiration dates, the same information could be incorporated into full-color sales or marketing messages on individual phone bills. Customized messages can recommend calling plans based on usage patterns, show off new phone models, or market hands-free kits in states where they are required by law. Since the bill is going out anyway, the only real additional costs are the programming to customize the messaging and integrate it into the bill design. The graphic design costs should not be much different from those for the generic marketing materials. Printing costs should not change significantly (and may even decrease) and postage costs will drop sharply while Scitex Digital Printing VersaMark Printing System the bill becomes a proactive marketing vehicle with relevant messages instead of generic offers. Offers for new phones complete with color photos of the phones and slice of life photos of people using them can easily be added to the bill along with coded coupons for discounts on phones and accessories that can help track response. Business Color makes this practical, affordable for customers, and for print providers offers a profitable value-add for customers looking for a competitive edge in marketing and CRM. It delivers the Value of Color. Business Color using the SDP VersaMark is the enabler for marketing and IT organizations to make transactional documents a value-adding and even revenue-generating tool for businesses, as opposed to a pure cost. It fits the trends of B2B (Business to Business) and B2C (Business to Consumer) markets where color is becoming expected, overcomes the cost barrier of color printing, and is already successful in vertical industries with appropriate applications. Combined with variable data, Business Color satisfies the requirement of content owners and creators to enhance the value of transactional documents and the requirement of document producers to contain cost and ensure time and accuracy needs are met. Defining Value VALUE, in business and in life, is often a function of cost. In printing, color s intrinsic appeal and its potential to evoke a response must be balanced with its cost. Color may increase the response rate to an offer, but if the cost of adding color cannot be justified by the results, then it is a poor value. On the other hand, if color can be added economically then a positive ROI is far easier to recognize and the value of color is much greater. THE REAL VALUE, then, comes when compelling, attractive color documents can be produced quickly and economically, and integrated into applications that are likely to deliver the best response. As the cost difference between color and black and white printing decreases, it won t take long for marketing managers and advertisers to see the value of personalized color and the even greater value of personalized color printing on a document that is always opened.

11 Transitioning color. to Some printers, especially in in-plants, service bureaus and data centers have been known to joke, We print in two colors: black and white. Meanwhile, they are evaluating options that allow them to add color to documents. Some start with adding spot color to a toner-based machine, but find it is only effective for a limited number of applications. The bigger step of moving to full color requires a completely new machine and presents significant challenges, not the least of which is producing full-color pages that customers can afford. There is little middle ground and little flexibility with toner. With Business Color, however, a printer can upgrade a single, basic VersaMark monochrome press, adding print heads for spot color and then full-process color, responding to customer requirements and market demands. This flexibility provides complete investment protection and paves a path to a fast-approaching future where color will be expected on virtually every document. With a full-color configuration, a single VersaMark can print monochrome, spot, and process color based on customer requirements, maximizing the use of the machine across many jobs and shortening the time to a positive ROI. Why There Was No Spot Color TV If you compare digital printing to broadcast media there are some interesting parallels. Radio equates to impact printing. Efficient, but lacking in visual appeal. Black and white television is like monochrome laser printing: it does the job better but still lacks impact. Digital and high definition television are like high-end color laser printing. It has potentially exceptional quality but is still too expensive for most users. Analog color television (what most of us have) is the equivalent of Business Color: it has delivers the power of color at a moderate level of quality that is perfectly adequate for the majority of uses. Of course there were never spot color TVs because it wasn t enough. Imagine only skies or grass or flesh tones being in color: great in artsy ads, but that s about it. And similarly, although spot color digital printing is fine for certain applications, it has never gained broad market acceptance because it isn t enough and cannot be upgraded to full color. Business Color is a solution that makes digital color affordable for high volume printing of a broad range of documents. With Business Color the cost to print in both spot and process color is no longer beyond reach, regardless of the length of the print run. And with Business Color, spot color can be upgraded to full color.

12 Transitioning to color. (CONTINUED) In the case of the mobile phone company, Business Color can eliminate the preprinted forms used for the basic two-color bills. Then as marketing offers are added to bills featuring photographs and other graphics, a VersaMark can be field-upgraded to print full-color bills single-wide or two-up duplex, with all the customized information in a single pass, at up to 2,000 pages per minute. Business Color eliminates preprinted forms and adds marketing potential to common transactional documents. Or consider a company that prints church offering envelopes. These small envelopes use an assortment of fairly simple generic designs and layouts and have long been bulk offset printed in basic colors, inventoried and shipped as needed, often based on seasonality or the type of pledge or offering. By using Business Color to replace offset printed envelopes, churches can have designs customized for their needs and personalized for the individual parishioner, all at a lower cost than preprinted envelopes. In addition, the printer can reduce or eliminate warehouse space and offer products more closely attuned to customer needs. Seeing in color. The Importance of Vision Shifting from black and white printing to Business Color requires an understanding of your market and a vision of how your business can offer new solutions to existing and new customers alike. This vision must work on several levels. First, you need to understand the different color printing technologies and whether they can fit the needs of your customers. For example, the best color laser printers offer near-offset color quality but operating economics limit them to short print runs of about 3,000. If your customers primarily require graphic arts-level printing in short runs, perhaps with variable data, then a high-end color laser printer may be the best choice. On the other hand, if your customers need moderate to high volumes of transactional or direct mail documents with extensive variable data, then Business Color using the SDP VersaMark is the only viable color solution. It is for printers accustomed to thinking in tens or hundreds of thousands or even millions of pages per month and who see the value color can provide their customers. Second, advertisers and marketers are looking for cost-effective ways to take advantage of the higher response rates customized color documents can deliver. They are seeking to leverage the power and value of color to motivate, persuade, inspire, and influence. As a result, they are specifying digital color printing on many more applications than in the past. Taking advantage of this trend by implementing a color solution now better positions your company to succeed as the market expands instead of playing catch-up to competitors with a broader vision. Third, you need to look ahead this is the vision part to where you want your business to be in one year, in three, in five. 1. Do you see color as an essential part of your company s future? 2. Where do you see color as adding the greatest value to your company and what you offer your customers? 3. Will offering affordable effective digital color printing help differentiate your business from your competition? 4. Will offering affordable color help you attract new business from existing customers by providing new printing solutions that will benefit their businesses? 5. What applications can you envision transitioning to color right away? 6. What new applications do you see for color printing, and are there other services you can add that would enhance your color printing capabilities and present a great value for your customer?

13 color The of the future. Technology mavens and assorted pundits like to point to a future where all bills are presented and paid electronically. But printed bills and statements are unlikely to go away in the lifetime of anyone reading these words. As a matter of fact, when document owners discover the potential gold mine these documents offer for marketing and CRM they will demand document producers adopt new color printing technologies. And as that happens, the printing industry will change forever, just as electrophotographic printers vanquished impact printers to low-volume applications. The path to the future is clear. The leaders of the printing industry, from service bureaus and data centers to quick printers to big commercial printers, are already investing in a future of color and finding the many ways color Business Color delivers value. Tricks of the Trade 4 Tips to Make Your Customizing More Effective Clean Up Your Database Most marketers have more than a budgetary excuse for not implementing a color variable data solution: Their data bases aren t in shape to do the job. Very often, both first and last names are in a single field, resulting in salutations as Dear John Smith, which somehow lacks the ring of sincerity a successful mailing needs. While correcting such problems can be costly, start now to create databases that have as many fields as you can envision. Be sure to allow fields for information on products, services and customer interactions from various sources. It s better to have a field that goes unused than not be able to capture and use information you need a few months down the road. Automate Data Collection Look for easy to implement tools that make collecting and using customer information a straightforward process. There are products that work on departmental levels and others for enterprise-wide installations. The best help in acquiring information and making it easy to access and use in print and electronic formats. Use Color Effectively Color illustrations, photographs, and logos add eye-appeal, visual excitement and convey a sense of quality, permanence and professionalism. With the full process-color palette of a SDP VersaMark printer at your disposal, you can maintain your corporate image, include design elements related to your message and draw attention to key information. Clean Designs Work Best When adding color to documents for the first time, use a graphic designer who understands the balance needed to put words and pictures on a page in an attractive and compelling layout. Particularly where color is involved, less is more. This is especially true on transactional documents where the marketing messaging is secondary (at least in the customer s mind!) to the information on the statement or invoice.

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