MARKETING 4 DIGITAL: The Price That's Right for VDP

On-demand printing, at least in the static environment, is really a manufacturing solution. Someone is coming up to the print salesperson, saying, “Here's the disk; I need this now; produce it digitally rather than by offset.” Variable-data printing (VDP), on the other hand, goes back to marketing. Its best use comes from its middle word, “data.” Understanding data's value is an important component to a salesperson who gets “it” in the VDP area.

I think of data as prospect or customer information, pertaining perhaps to past purchases, age, gender, lifestyle, special interests, region, etc. Part of the beauty of VDP is that it allows that information to be utilized in a marketing campaign to deliver highly targeted and relevant information to prospects and customers.

Out of that customer database comes a prospect, someone who might be interested in buying your products and services, but isn't now. By using those identifiers or qualifiers, you can go to a data house and say, “Find me more people that look like X within a certain geographic region.” It's a safe assumption that you can sell the same sorts of products and services to these customers.

VDP pricing is an art form. Cost per piece is a manufacturing measurement, gauging competitiveness, efficiency, how good of a buyer the printing plant is with supplies—papers, inks, etc. But—especially with VDP—you can also think about print per result, print per sale, print per whatever the objective is—something that represents the true value of the marketing expenditure.

It's very interesting to compare cost per piece versus cost per sale. Your cost per sale is the total cost: printing, creative, postage, research—every element that goes into it is really the total cost. The clearest indicator of your success is total cost divided by total revenue generated, or by the total amount of registrations, phone calls, Web leads—whatever your measurement of success is. You can't just say, “Well, digital printing costs 20¢ per piece rather than 5¢ for offset.” It's a different scale.

In the marketplace, by experience, I segregated all the development costs out of the unit costs of the click charge for digital printing. I realized many print buyers were still going to be using a cost-per-piece measurement. Knowing the bottom line of our costs, I shifted them within the cost structure presented to the client in a format I thought would be most acceptable. As a rule of thumb, I kept the manufacturing cost as low as possible and dumped all the costs I could into a fee-based approach: databases (acquisition, analysis, cleansing and modeling), creative services, writing, copywriting, research, development, etc.—all the fees that businesses are used to spending.

You're essentially asking a customer to no longer do the “same old, same old.” Force of habit is a part of human nature, so you must be able to communicate that the payoff for changing the way they market and communicate is great enough to make it worth the effort.

That includes making the transition to a more complex marketing product as painless as possible for the client—stepping in with the IT, programming or database services, or assisting in creative—whatever you need to do. They're all chargeable fees, but it avoids having them confront some of the internal issues, which may be a deal-killer.