Published In:
CFO Date Published:
15th September 2002 Author:
Simon Segal
Moving corporate mail means that each day, thousands of documents such as invoices, statements, annual reports and rates notices are packed and distributed using traditional and electronic mail techniques. In its more complex form, corporate communication services is a huge logistics exercise involving complex database networks, intricate compilation technologies and an extensive IT infrastructure.
Communication is only partly to do with message content. Most of the investment in communication is in message delivery: how to seek out and identify a customer, how to reach them, how they can reach you, how to make all the links and connections required for communication to take place.
SecurityMail CEO Steve Sparkes finds that organisations are now continually looking to create sustainable communication channels that will keep stakeholders informed and satisfied about company products and services.
"It is a difficult and complex process - a delicate mix of innovation and experience, speed and efficiency, customer service and support and, ultimately, bottom-line costs. Finding solutions requires a lateral approach and capacity to harness appropriate technology," says Sparkes.
Peter Mattick, joint managing director at Salmat - one of Australia Post's largest business customers - finds that communication is only partly to do with message content. He argues the link between a company and its customers is about "keeping the connection alive and ongoing so that the relationship grows, whether that's delivered by mail, the telephone, the internet or on foot". Sparkes' approach to developing an appropriate communications solution is to first determine one's communication needs. He identifies three broad requirements that each demand major solutions:
Essential mail - the distribution of information an organisation has to communicate to its customers or stakeholders. This type of information is requirement-, statutory- or compliance-driven and can either be revenue- or non revenue-generating.
Fulfilment mail - the ongoing management, processing and distribution of information throughout the life cycle of the intended communication.
Marketing mail - the distribution of information an organisation would like to communicate.
In Sparkes' approach, accompanying each of these three solutions, but not exclusive to each, are three choices of distribution channels - offline, online and multi-channel distribution, a combination of both.
Mattick's starting premise is to break down all direct customer communication into three forms - paper, voice and online. "Say you launch a marketing campaign with a piece of direct mail. That can lead to a customer making an inbound call to a call centre. The response to that might be a catalogue or outbound call or even a tailored e-solution," he explains.
Communication links are split into a chain of document management, letterbox delivery, teleservices, fulfilment, e-commerce, data solutions and marketing tools.
"Whether it's segmenting huge quantities of marketing data for a campaign, or de-duplicating and cleansing your data before producing your statement, or customer mailing, solutions can be found. Documents can be designed to specifications into customer-friendly statements and even include marketing messages. Data can be consolidated from various sources, adding rich information. Data can be analysed, and the who, why, and when of buyer behavior and lapsed customers reactivated. Hidden data in billing and accounting systems can be unlocked and transformed into powerful customer-focused marketing information. The opportunities are endless."
Consultant Gaye White from Expense Reduction Analysts (ERA) highlights the mismatch between technological advancement and the mailroom. "Ironically, the mailroom hasn't been swept up in this advancement. One often finds oneself back in the 1950s with mail still in departmental silos. This involves vast duplications and wastage. The challenge is for companies to take a holistic approach to their overall mailing requirements.
"Often, once managers understand the total cost of producing a mail item, they choose different methods of communication for both their business-to-business and business-to-customer needs. Even the most progressive organisations struggle to find the time to review their information distribution methods. Yet, the cost saving implications can be right across the board - from staff redeployment to hardware and software and stationery requirements.
"The total cost of sending a letter is often near $5. Yet the focus is on the 45-cent stamp cost. It can be highly effective to implement new processes and set benchmarks in an area which previously was difficult to monitor."
Mattick reckons the potential revenue benefits from high-quality customer information can amount to millions of dollars. "The quality of customer information directly impacts on the effectiveness of an organisation's marketing efforts and their ability to retain customers."
He finds that up to 20 per cent of data items in critical organisational databases are inaccurate. "When examining the quality of their data, organisations need to evaluate both the inherent and pragmatic quality of their data. Inherent quality is measured by examining the completeness, accuracy, presentation and recency of the data. Pragmatic quality is the value that accurate data has in supporting the work of the enterprise. Data that does not help the enterprise accomplish its mission has no quality, no matter how accurate it is."
White adds that most corporations are generally comfortable receiving and sending information in a variety of forms. "Nowadays, conventional mail is not always necessary or appropriate. Traditional processes and the need for existing equipment should be questioned."
He believes the answer is often still with mailing houses in both their traditional and modern structure. "They offer the conventional mail-merging facilities, as well as bar-coding requirements and alternative distribution methods such as fax and e-mail." But it doesn't stop there. "They can host a web site so that e-mails are despatched advising the recipient that expected information is now available from the site. From there, the action that recipient takes can be monitored and appropriate departments kept abreast of the response. This can be used across many departments, from accounts to sales, providing eye-opening statistics and dramatic cost savings of up to 40 per cent."
Alternatives to receiving paper bills in the post are becoming increasingly viable. It is almost common to receive bills via the internet, plus view, pay and store them online. This is convenient and time saving, while providing a lower-cost delivery option. While the internet and electronic delivery systems have brought major advantages, most agree that physical mail will always have an essential role in customer communications. The paperless society is not arriving as fast as many anticipated, but electronic technology is assisting in developing processes to manage such costs.
Let the customers know
When the Commonwealth Bank of Australia (CBA) acquired Colonial State Bank, Salmat was commissioned to notify every Colonial customer of changes to their branches and products.
The branch amalgamations were implemented over four months. The campaign identified the top two branches where a personal customer transacted and the top five where a commercial customer transacted. When one of the customer's top two branches closed, the customer received a letter informing them of the closure, and directing them to their nearest Commonwealth branch.
The changes to products involved a variety of mailings sent over a seven-month period. Each existing Colonial product was converted into a CBA product with new CBA account number details. The scope of the changes was enormous. There were over 260 product variations, with several Colonial customers having over 200 different accounts.
The branch amalgamations involved the entire Colonial database of some 1.3 million customers. This database was matched with a list of amalgamating branches. Salmat received a branch "go file" for each of the nine runs. Within one run, there could be three to over 300 amalgamating branches Australia-wide. The "go file" was then run against the main Colonial database. Customers affiliated to the closing branch were sent a letter that informed customers of the changes and directed them to their closest CBA branch.
Based upon customer tier, a small segment of Colonial customers received a telephone call each run. There were no phone numbers provided on input. With help from an outsourced supplier, the selected data was run against the White Pages using the customer's name and address details.
Customers who did not map directly into CBA systems were processed independently to the Product Conversions mailing. This was a small campaign consisting of six segmented groups.
During the integration, the bank also completed a mailing to inform customers of when they could use their keycard. The input quantity was around 200,000 records.
Salmat had a 12-hour period to complete this campaign. The data arrived at 8pm and the job was completed by 5am the next morning. Product Conversion was the biggest component of the integration. The mail-out was a pack to customers of a single source for all relevant information. This included old and new account numbers, product names, changes to accounts and product terms and conditions.
The pack comprised a covering letter, product sheets, and terms and conditions inserts. The data drove the type of covering letter for the customer, as well as the production of the relevant product sheet. Within each product type, different flags drove copy that was specific to each different product. Given the various combinations one customer could have, this job presented various challenges.
Data was initially sourced from the Colonial data warehouse, but this data source did not contain all the specific product information required for the mailing. Over 20 additional files were extracted from various product source systems and consolidated with the information from the Colonial data warehouse. Data providing details of new Commonwealth Bank account numbers was also consolidated with the relevant Colonial product information.
The program catered for more than one million individual customer details, and 2.5 million account records. Within these account records, there were more than 260 different product codes. For each customer record, the product codes were the key to driving the entire production of the customer's personalised pack. This resulted in over 467 variations of letter text files, which were driven solely by the customer's account types and product flags.
The program had to cater for single and joint customer relationships, as well as personal and business customer records. Customers could also hold any combination of single and multiple account types - the range was from one account up to 189 accounts. The Reissue Campaign was devised to track accuracy and customers' reactions following the Product Conversion mailing.
This campaign consisted of regenerating a mail pack from the Product Conversion mailing. There were various reasons for customers requiring a new pack. This may have included change of address, misplacement or account details missing from within the pack.
Each day faxes arrived to Salmat from either CBA branches or call centres Australia-wide. A file was generated from these faxes, which was run against the Product Conversion programs. Once an output file was produced, this was sent to the mailhouse for the generation of the packs.
The success of all mailings was judged on the accuracy of the information in
the pack, customer reaction and calls, as well as the achievement
of the business objectives of each component. The tracking of results
from the aftermath of the Product Conversion mailing was a good
indication of the integration being a success. The results proved
that pack accuracy was achieved for all customers. The bank received
a total of 1632 calls regarding the Product Conversion information
sent to Colonial customers. This was substantially below the expected
target of 10,000 calls.
