This begins a monthly series on “new” revenue streams for printers. I say “new” reluctantly because many have already discovered alternate revenue streams such as wide format. This series will explore other printing options such as finishing, 3D, label, photo, textile, etc. Let’s begin with a sector that many think is beyond their budget: mailing and fulfillment, which at its essence, includes variable.
So how can you offer mailing and fulfillment services without a huge investment? We asked Insource Corporation, a Canadian industry leader in this category, for some input. Here’s what Insource’s Tim and Suzanne Wakefield and their sales staff had to say.
There are at least seven considerations before making the decision to get into mailing and fulfillment. First, knowledge is paramount. A printer needs to partner with a company that will help develop the value-added proposition of mailing and fulfillment. Second, there must be a person or group in your organization who will champion the new venture with a “100% buy-in” commitment. Third, you as a printer must understand the significance of variable data – and learn how to get the mail to the recipient with complete accuracy and within the specifications of Canada Post/USPS. Therefore, the first actual purchase is usually the software (an example would be iAddress).
Fourth, workflow must be understood and optimized. Understanding paper flow – from data to design to creation to delivery – all within specs, timelines and budgets, is essential. Fifth, what is the value-added benefit you’re going to provide to your customers and how will you sell your new services? Sixth, acquiring technology makes sense only after the above five are in place. Simple applications to start might be folding, envelope stuffing and inkjet printing with personalization through to verification – that is, 100% proof of completion to your customers.
Finally, another important consideration may be used equipment. Acquisition must be based upon the condition of the equipment, age, end of life (legacy), and local vendor support. The equipment might be rebuilt, refurbished or upgraded with current technology (example: add a camera system) or simply “as is” – whatever the best fit for your customers will be. But always ensure that the pathway to growth, enhancement and greater value-add is never compromised.
Why is this sector so successful?
A typical direct-mail piece not personalized yields a response rate of 1% – 2%. However, when direct mail is personalized with Variable Data Printing (VDP) technology, response rates can increase to 25% to 30%. Furthermore, tracking results is easier via bar codes, coupon identification numbers and other technologies. Also, spoilage rates can be reduced to less than 1% with end-of-line verification and reporting.
One independent landmark whitepaper began with a basic mailer – a simple black & white piece with no name. In this particular study it found that:
1. Adding a name only increased response by 44%
2. Adding full colour increased response by 45%
3. Adding a name and full colour increased response by 135%
4. Applying Variable Data information (i.e. tying the mailing to something you know about the recipient, such as past buying habits) increased response by 500%.
Possible entry-level equipment
Given current printers’ capabilities, the Astro Memjet M1 with Flexmail Software is a natural first step. The printer can digitally handle full-colour CMYK envelopes and take it to the next step by addressing direct-mail pieces. This is an inexpensive acquisition with a tremendous ROI and value-add for a printer’s clients that will never become obsolete.
Next would be a higher-speed single colour inkjet and envelope inserter to provide addressing, personalization and inserting, leading to verification with the addition of a camera system down the road.
Tabbing/clipsealing is also a good choice in the entry-level mailing world, and can be relatively inexpensive, with good ROI. Although there are many price points for inkjets, inserters and tabbers, acquiring well manufactured equipment with inline and offline flexibility and proven partner support will ensure that the investment is a positive “leap” into the mail and fulfillment world.
For more information please visit www.insourcecorp.ca or call (905) 709-3344.