Majoring in Minors — The $7.00 Equation

Some of you may recall a couple of weeks ago when I talked about one of the biggest opportunities to drive cost out of print and direct mail projects: reducing how much is spent on expedited postage and expedited shipping via better collaboration and project management. Many of you weighed in with your comments and suggestions.

I thought I would elaborate a bit further on this.

A few years back, the folks at CAP Ventures/InfoTrends conducted a study. It was their finding that for every one dollar spent on print, an additional seven dollars is spent on other processes or components related to the print. The list includes items like internal creative costs, external creative costs, warehousing, obsolescence, shipping, postage, administrative costs associated with the ordering process and more.

Here are a few examples I have seen where significant improvement was possible:

  • A building supply manufacturer who provides collateral to dealers: I have seen studies that assert that 35% of all print collateral is rendered obsolete before it is used. This manufacturer did some research and found that their number was about 20%, which is still significant.
  • A multi-title publisher who prints all of their rate materials at the beginning of the year and ships them to their reps all across the country: They weren’t able to venture a guess as to how much was being used or not used. I ran into one of their reps at a conference who told me they get piles of stuff they don’t need and don’t use. It’s easy to figure out how much is in your warehouse. Do you ever wonder how much is tossed by reps, dealers, etc. out in the field?
  • An insurance company and a franchisor who produced custom creative for their agents and franchisees: When an affiliate needs custom art, they call the marketing department. The marketing department is buried. Three weeks later the affiliate gets their custom art. How long do you think the affiliates will stand for that? What happens when the process breaks down? The affiliate finds higher cost ways to execute, and brand continuity is compromised.
  • Numerous manufacturers who post marketing materials on websites for their dealers to use: Or, in many cases, not used. Why? Because they have never taken the time to ask the dealers what they will use. How much creative resources and staff resources are spent on programs that won’t be used? Is the answer trashing them? No, it’s asking the customers (the dealers) what they will use.

There is no one-size-fits-all solution. Certainly, many organizations with affiliates, i.e. dealers, agents, field sales reps, or franchisees, could benefit from web-based customization and ordering mechanisms. These provide real insight into purchase behavior while ensuring brand continuity, consistent pricing, quick turnaround and cost reduction. We call them “Cloud-Based Marketing Centers.” However, for these tools to be effective, there must be a solid marketing strategy, marcom and training and education.

What’s your take on the stat that was presented at the beginning, “For every one dollar spent on print, another seven dollars is spent on other stuff related to the print?”

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