The Catablog
Archive for June, 2009
Electronic vs. Printed Communication: The Sustainability Battle
As the United States House of Representatives sends the newly passed “cap & trade” legislation over to the Senate for debate, I thought now might be a good time to discuss electronic versus paper communication.While it is true that both can (and should) be used in concert with each other, is one better than the other from a sustainability standpoint? The answer is a resounding “YES.”
Consider the issue of inputs/raw materials being renewable. Printed communication uses paper as its primary material. Paper comes from trees, which are a renewable resource, and have been for longer than humans have been on the planet. Since this is the case, and since forest products companies rely on trees for their products, they take great care to “renew” their main resource. The forest product industry plants 1.7 million trees per day, more than three times what they harvest. The primary materials used to make a computer require the mining and refining of many different metals and minerals (including gold, silver and palladium). These are non-renewable resources from the standpoint that an individual cannot just “plant” a metal or mineral.
In addition, paper and printed pieces have a leg up on the electronic medium when it comes to energy consumption. 60% of the energy required to manufacture paper in the U.S. comes from carbon neutral sources and is produced onsite at the paper mills. Compare that to the electronics industry, which obtains over 90% of its power from the national power grid, a large part of which is greenhouse gas-emitting, coal-powered power plants.
As well, paper products stand a much better chance of being recycled properly. Nearly 60% of all paper in the U.S. is recycled annually, while only 18% of electronic devices are; and of those that are, almost none are being reused for other products. E-waste is the nation’s single largest toxic waste export.
Some interesting facts, courtesy of International Paper:
- 20% Less CO2 is used per year by a person reading a daily printed newspaper versus a person reading web-based news for 30 minutes a day.
- On average it takes 500 kilowatt-hours of electricity to produce 440 pounds of paper, the typical amount of paper each individual uses in a year. That’s the equivalent of powering one computer continuously for five months.
- It costs an estimated $2.8 billion of energy to leave computers sitting idly overnight in the U.S. On a CO2 basis, that’s an amount equivalent to four million cars on the road.
The paper industry has had much more time to figure out how to be sustainable and responsible. In time, the electronics industry will do the same. But, until then, paper and printed communications have the upper hand when it comes to being sustainable. And while a balance is required between the two for effective communication, it is important to keep the above facts in mind when finding that balance.
To Blog or Not to Blog
I have toyed with this question for quite some time, and this year, with all the hype surrounding social media and social networking, we decided to give it a shot. Who doesn’t enjoy reading relevant commentary from the experts on their topic(s) of choice? My wife and daughters are Facebook and Twitter fans. My brothers like to stay up-to-date on the newest technology trends, so they frequent www.techtickerblog.com. Personally, I check in on various print industry, finance and news blogs.
The aforementioned blogs keep me up-to-date and we should be doing the same for you. Our primary goal for the blog is to further connect with you and to be the first to educate you about industry happenings. With so much going on in the world of mailing, paper, distribution and Lean Manufacturing, we recognize the need to inform our clients of changes as we learn of them. You will be hearing from me occasionally, but more importantly, you are going to hear from some of the industry’s experts on the topics of paper, prepress, data, mailing and more! Not only will you hear Arandell’s perspective, but we will also incorporate information from the ACMA, DMA, PostCom, IDEAlliance, MTAC and other printing industry associations. We look forward to your feedback and hope that you will take this opportunity to tell us what topics we’re not covering and should be. Our blog is only as relevant as its coverage of the topics our clients want to read about, so speak up! This blog’s for you!
The Power of Matchbacks: How they will save your direct mail program
In case you haven’t heard this lately, ROI is the not-so-new mantra. Click here to see the latest epiphany from eMarketer exclaiming ROI a must-have. Costs seem to be driving many decisions lately; this is no surprise because many of you are in survival mode right now. With all the channels / customer touchpoints now in play, it is more important than ever to understand the impact these have on your business and the revenue they generate (and yes…as well as the costs associated to them). We talked about matchbacks as being a key, but as you all know it’s not an exact science. Tim Perry from CWDKids recently stated his frustration about the lack of conclusive data in an article in MultiChannel Merchant. In my opinion, however, matchbacks do give you a very good handle on what is driving your business and as long as the business rules are constant, the information is extremely valuable and useful in analyzing current campaigns and in preparing future campaigns.The biggest constant resource in all of this is your database. It is also your biggest asset. Your database should accommodate all your marketing channels and any new ones that are being created this week. By accommodate I mean that each channel can be clearly viewed and measured in terms of your key needs. The database should also support outgoing information as well as incoming information.
Outgoing information includes; dates, costs and event codes for all campaigns; direct mail, retail, email, Twitter, text or even the ancient telephone campaign. It is critical that each time you touch a customer that information is maintained. With the cost of storage and data decreasing as I write this post, there is no reason not to. Detailed reporting can be derived from this information and you can determine the true value of your customers.
Incoming information includes; orders, returns, “take me off your list,” “do not email me,” “do not call me,” change of addresses, survey information, etc. Again the more you have and maintain, the better.
All this information, literally at your fingertips, gives you the knowledge to understand the what, why, who, when, and how much and makes marketing decisions easier. The key is to have a platform that allows you to do all of this. We will elaborate in later blogs.
Fraser Papers Files for Bankruptcy Protection
Fraser Papers, which operates two paper mills and two pulp mills, produces mostly uncoated publishing grades, although they do manufacture some coated groundwood products. Annually, they produce 410,000 tons of paper and 615,000 tons of pulp. The company claims that, at least initially, their operating plans remain unchanged, and that they will continue to manufacture specialty paper products for existing clients. How long that continues to be the case depends on how much cash they can generate to continue operations and how many orders they continue to receive.
This is the second North American mill to file for protection this year, click here to see the first. A continuing trend? Doubtful. But, if Fraser fails to generate enough cash to keep paper operations going, it will force many of their clients to seek paper elsewhere, and that could tighten the market up.
9 Things You Need to Know about the USPS Summer Sale
Since the recent announcement of the approval of the USPS Summer Sale, Arandell’s postal department has been a flurry with questions from customers, prospects and even people with whom we do not do business. This is the first time in history that the USPS is offering mailers an incentive and mailers are very excited about a potential reduction in their postage. In order to proactively address some of the questions that are coming in, Don Landis, VP of Postal Affairs and Susan Pinter, Director of Postal Affairs recorded a podcast of Frequently Asked Questions, which are listed below.
Click below to hear the podcast.
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Q: Can you provide a brief explanation of the Summer Sale?
The industry has been asking the postal service for an incentive program for several years now, whether it be a seasonal incentive, a prospecting incentive, etc. The postal service, in return, has been asking mailers how such a system would even work.
With mail volume being down as it is and postal revenue at an all-time low, the post office has come up with a program to gain more volume during periods of time when volume is traditionally low. The hope is that mail that was not originally planned for the fall months will be added. Everyone is happy that the post office is offering the program and is looking forward to similar programs in the future.
Q: Who is eligible? What qualifications need to be met?
Out of 100,000 standard mailers, we anticipate that about 3,000 mailers will be eligible for the summer sale rebate. To be eligible, mailers need to have mailed 1,000,000 pieces through a permit during the period of October 1, 2007 through March 31, 2008. It is important to note that the mail does not have to be from one location…it can be from multiple.
Does Summer Bring a Better Paper Market?
Could it be true? Could the paper market be correcting and things starting to look up?
In discussing current market affairs with many of our paper suppliers, the answer seems to be a guarded “yes.” While the first and second quarters have seen a tremendous amount of downtime taken (both temporary and permanent), the mills feel that the moves they have made have been adequate enough to balance their supply with market demand. We shall see. But one thing is for sure: any more months of +/- 20% paper ship rates, and the paper mills could be in more trouble than they are now. No one wants to see that.
What does this guarded optimism mean for prices? Well one thing is for sure: the drastic reduction in paper prices we have seen the last two quarters cannot be sustained. The mills have given back most, if not more than what they gained over the last 18-24 months. And while the mills’ costs have decreased as well, they have not decreased in tandem with price decreases.
Does this mean that increases are on the way? I highly doubt it. Are we going to continue to see the vast differences in pricing levels that we have seen over the past six months? I doubt that as well. Whatever your paper price is today, feel confident that you are not going to see any increases through the end of the year. Also feel confident that you are not “missing out” on some paper price deals by continuing to shop around.
One thing to watch: black liquor credits. What is that? Black liquor is a by-product of the paper making process that is created and then re-used elsewhere down the process chain. Some mills have been able to apply for, and receive large amounts of government money under a loophole in a budget bill passed in 2005. That loophole is set to expire soon, and some members of Congress are looking to close it sooner. Those mills that are relying on this additional loophole funding now might be caught in a bind sooner rather than later if this loophole closes before it is supposed to. If you would like more information about this, please just let me know.
How to Avoid Flawed Results
Now more than ever understanding what each of your marketing channels is driving your orders is critical to your success.
Marketers have attempted various methods to achieve this understanding. What we have found is that in many cases the results are flawed and as a result, decisions as to how to move forward are based on inaccurate information. Doing this process internally sometimes leads to personal preferences and emphases on a particular channel over another.
Even if you decide to keep your matchback process internal, it pays to have an outside company occasionally provide the matchbacks for you. Here are three reasons why:
- The external company can validate your results. For a few hundred dollars you could receive an external reassurance that you are on the right track, and you can continue to charge ahead. Worst case scenario? You weren’t on the right track and now you have a great resource to help you fix and improve.
- Ensure your methodology is consistent. Every company has created a system that works for them depending on their culture and the different personalities in the team. An outsider looking in has the ability to find the flaws and the areas that your team might have overlooked or neglected.
- Review your best practice business rules. There are many different ways to peel an apple. Sometimes your company’s best practice business rules might not be, in fact, the best. A fresh perspective is great to challenge and refine your current approach.
Going through the process, discussing and agreeing to the business rules, understanding where the data is coming from, etc. are all critical to the accuracy of the analysis. Keep in mind – you should already know the total sales for the period being analyzed. The matchback fine-tunes those numbers into the proper channel receiving credit for the sale.
How FSS will Take Away our Co-mail Savings
I have attended several postal meetings recently where postal officials updated the industry on the status of the FSS. Click here to see the FSS in action. It seems the program is back on track after some start-up delays. I would suspect that in the near future the postal service is going to start asking or requiring U.S. mailers to prepare flats for the FSS.
Why are they implementing FSS?
The FSS sorts flats in Carrier Walk Sequence. (Carrier Walk Sequence is just a fancy term for putting mail in the order that it is delivered). The more the USPS can automate the daily tasks of the carrier, the less expensive it will be for the USPS to deliver the mail. Because the USPS is swimming in hot water, you can imagine it will continue to jump at any opportunity to make money.
How will this affect me?
First, we will start to see the disappearance of the carrier route flat discount. The FSS machines will start to do what mass mailers are doing right now, putting flats in Carrier Walk Sequence. The USPS estimates the FSS will sort about 80% of the flat volume when installation is complete. That will still leave 20% of the flats eligible for the carrier route discount, and therefore only 20% which is eligible for co-mail savings.
How to get the savings back
To compensate for the loss of co-mail savings the USPS has stated they are going to give catalogers a discount if they organize their shipping pallets to fit the FSS machine requirements. This process is called co-palletization.
Now, to be frank, I am not sure if the co-palletization savings is ever really going to happen. We have been told and promised by the USPS that we would have savings before, but nothing ever follows through.
If we lose co-mail savings most catalogers would see a 5-10% increase in postage! Postage continues to increase and savings is decreasing. Can we really afford to pay more for mail?
If you are sick of paying more, and more and MORE for postage email the American Catalogers Mailers Association. Catalogs need to have a voice before our postage savings are taken away.
6 Prepress Questions to Ask Your Printer
When choosing a printer, many clients overlook the importance of how it might impact their prepress production workflow and specifications. Although most large commercial web offset printers have similar prepress and plate requirements, there are inherent differences that need to be addressed prior to preparing your final files and proofs.
A variety of conditions need to be taken into consideration when preparing your photography, separations and proofs prior to printing. Here are just a few that come to my mind:
1. Will this job print sheetfed, web offset or possibly gravure?
Proof and file requirements change with each printing method. You will have to ask your printer the best practice methods to ensure the best possible quality.
2. Will these materials be repurposed for other media, i.e. newspaper, web, VDP, etc.?
Different media requires different quality images. When in doubt, always err to the side of critical quality. You can always repurpose your materials for a lower quality standard more easily than you can repurpose your materials for a higher quality standard.
3. What type of paper will I be printing on?
Changing papers, even if it is the “same paper” produced at a different mill, can create a different effect. Make sure you know the best prepress practices for your paper choice.
Prospecting with the USPS Summer Sale
Well, as you all know, the USPS is strongly considering offering a discount this summer if you increase your circulation over the same period of time last year. While this is a great step for the Postal Service in starting to finally recognize the needs and issues of catalogers, it should by no means be the key factor in deciding whether or not to increase prospecting. Right now, regardless of an incentive, this is the best time to build your brand. Consider the following reasons:
•There are fewer catalogs in the mail right now so yours will likely get more attention and have less competition than at any time since after September 11, 2001. Making it smaller and cheaper does not necessarily mean it is better. Will making your retail store smaller and “cheaper” bring in more customers?
•If you believe many of the economists, there are signs and reports beginning to show that consumer confidence is coming back. Again, this is a great time to position your brand, show the consumer that you are still out there and demonstrate that you are in a position to offer value. You need to be ready when the consumer is ready!
•We all heard about the consumer’s lack of loyalty. Many of our analyses, however, show that if you communicate with your customers by telling your story and creating value and positive feelings on a regular basis using all channels, they will be there for you and will be less sensitive to discounts.
•Your house files are shrinking, or at best, remaining stagnant. As we all know, this cannot be the case for much longer. You have two choices; increase prospecting effectively or lose market share and see your business decline. We have seen many catalogers go out of business in part to this short-sighted approach. Don’t forget; prospecting also means contacting inactive customers in your file who have done business with you in the past. Consumer tastes, interests, lifestyles, etc. constantly change, and in the past year, many have changed multiple times.
•The tools and approaches that are available to help you accomplish this are more effective than ever. They are also more complex, mainly due to the fact that we now have to consider multiple channels, contact frequency, lifestyle changes, etc. These are all part of a complex equation that can be solved with assistance from your direct marketing partners.
•Use all channels to communicate with customers. The king is not dead. Catalogs still continue to be THE driver for sales in almost all analysis we do. More than ever, however, customers are receiving, expecting and wanting to be contacted from various channels, so you need to make sure you’re hearing what they are saying and responding accordingly.
Now is the time to get back into the game regardless of a postal incentive. We can help you to do it right by taking a systematic approach; analyzing what has worked or hasn’t worked in the past and developing a strategy to gain market share. It is not a race, but if you don’t get to the starting line soon, you will be left behind. And by the way, if any of you have tickets for the August 29 Buffett concert I’m interested.
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