It’s Transformation Time for In-plants

THE IN-PLANT market is probably the most underestimated user of digital printing technology. The influence of the in-plant is apparent from an examination of the segments where on-demand devices are being placed. The in-plant market drove the adoption of black-and-white digital printing and currently accounts for 40 percent of high-speed monochrome print-on-demand cut-sheet installations. The in-plants are also leading the color charge, accounting for 30 percent of placements in the 24-59 pages per minute (ppm) production color segment and 20 percent of the convenience color copier/printers and production color devices in excess of 60 ppm.

Just like the entire print-for-pay market, in-plants are in the midst of a radical transformation. The use of digital technologies, including the Internet, has triggered this transformation. Digital technology and demands from users are forcing in-plants to adjust their service portfolios.

According to an InfoTrends study, more than 60 percent of document owners and print buyers expect the amount of print produced at their internal staffed facilities to increase in relation to print produced with outside vendors over the next two years. The logic is simple—in-plants have been proven to save money, handle increased volume, meet user department turnaround time expectations and exert more control over security.

The State of the In-plant Market

Although there is good evidence supporting in-plant growth, it is still true that in-plant facilities face considerable challenges. The management of in-plant shops is typically isolated from the main organization, and the expertise required to manage an in-plant shop can be quite different from what the overall business requires. Nevertheless, in-plants have domain expertise that extends far beyond copying to more complex printing and related services. This positions them well versus outside print service providers.

In August 2006, InfoTrends conducted a study titled “A Vertical Market Approach to Document Services in the United States.” While the presence of staffed copy centers, staffed in-plants and staffed data centers varied by industry, some sectors had a very high incidence of these facilities. Retail, legal and transportation equipment manufacturing led the list.

This same study also determined that over 70 percent of companies with more than 1,000 employees had staffed in-plant facilities.

As noted earlier, over the next two years, the majority (64 percent) of document owners expect the amount of print produced at internal facilities to increase. Only 3 percent anticipated a decrease, and the remainder expected things to remain the same. When these responses were segmented by vertical industry, it became clear that some sectors had much greater expectations for an increase.

Adding Value to Documents

To be successful, in-plants can no longer depend on placing ink and toner on paper—today’s market is all about adding value to the document. User departments want value-added documents that are more personalized or relevant, more secure and have more of an impact. They also are demanding marketing materials that generate an improved return on investment (ROI) and much faster turnaround times.

To capitalize on this opportunity, in-plants must strive to make smart investments in hardware and software products that can deliver results in a cost-effective manner. A Web-based print service can integrate users with the in-plant facility’s production workflow. In-plants must also forge partnerships with marketing departments to define and deliver programs that generate a measurable ROI.

Personalized Communications: Help the Marketing Department

The demand for personalized communications is increasing. It is estimated that consumers receive between 250 and 3,000 advertising messages each day, and marketers need to find a way to cut through this clutter. If they don’t, their marketing messages may be tuned out or ignored altogether. It must also be remembered that consumers are becoming very savvy about filtering out unwanted information. Ideally, marketers should strive to replicate the communication that occurred when all interactions were personal.

InfoTrends’ Future of Mail study confirms that direct mail is the preferred method of contact for marketing and promotional purposes, cited by nearly 61 percent of consumers. This is not surprising since direct mail is unobtrusive and easy to manage (as opposed to telemarketing, which ranks very low in InfoTrends’ surveys). Consumers have a high preference for highly personalized direct mail with messages and offers that are designed to reflect their needs and interests (56 percent). The goal is to utilize technology to generate information that is of genuine interest to the recipient. In rating the direct mail that they currently received, however, respondents indicated that only 31 percent was personalized and useful. Meanwhile, 29 percent was personalized but not very useful and 40 percent was neither personalized nor useful. In-plants need to position their organizations to support relevant communications that drive business results.

Transpromotional Applications: Leveraging the Statement

Marketers face the challenge of getting their messages out in a way that encourages recipients to engage in desired behaviors, which can range from simply recognizing a brand to changing investment strategies or purchasing the latest product or service the marketer represents. Increasingly, marketers are using the tried-and-true monthly communications medium—the statement—as well as other transactional documents in new and different ways to ensure that their messages are noticed. This method of advertising is referred to as transpromotional, or transpromo. Transpromo provides an opportunity to blend marketing messages with must-read transaction statements, invoices, confirmations, benefits explanations and other notifications to influence behavior and ultimately drive business volume.

InfoTrends’ Future of Mail study also asked survey respondents to evaluate two different types of statements. One was a traditional statement that generally arrived at their doorsteps and included advertising inserts, and the other was a document with graphics and offers printed on the face of the statement that were relevant to their account information. Not surprisingly, statements with personalized “onserts” were preferred by nearly two-thirds of respondents. There is no question that transpromo is a service offering where in-plant facilities can provide differentiation.

Multi-channel Communications

Combining affordable color and multi-channel campaign marketing solutions with integrated marketing dashboards is helping savvy in-plants transform into valued marketing service providers (MSPs) for their organizations. They are evaluating tools like XMPie, MindFire and interlinkONE to provide multi-channel campaigns. This is the emerging world of integrated automated marketing campaign management. These software products enable marketers to select specific customers for inclusion in a campaign, filter other customers, decide which customers get which offers, determine the timing of when a customer receives certain offers, and through which channel the customer will receive the offer. Additionally, campaign management software can help detect customer responses to the campaigns, and it creates the output for telemarketing organizations, direct mail fulfillment or e-mail offerings. Meanwhile, the marketing department wants the ability to measure the effectiveness of marketing programs. Several campaign management tools can track response metrics in batch mode and real time, providing a user-friendly marketing portal that allows management to see the key reports and metrics on a day-to-day basis.

A number of in-plants are striving to participate in this more lucrative marketing value chain by providing an array of services related to enhancing the business value delivered to the organization.

Conclusion

During 2008, the successful in-plant will continue to lead the digital print transition. The effective application of digital color with software solutions will be critical. In-plants will continue to deliver the high quality and turnaround times that their organizations have come to expect. In addition, they will adjust to the changing environment that values targeted messages and reader impact over historic preferences for craft and quality. In-plants will start down the path to becoming MSPs, and these MSPs will be prepared to participate in the more lucrative marketing value chain by providing an array of services in the marketing process, from campaign inception to program execution.IPG

Barbara Pellow is director of the InfoTrends Business Development Strategies and Custom Communications Services, which helps companies develop multimedia strategies. She previously served as chief marketing officer of Kodak’s Graphic Communications Group. She can be reached at:

Barb_Pellow@InfoTrends.com