DSTi Output redefines the billing statement

At one time billing statements were about compliance and considered essential but boring. Now thanks to DSTi Output, the credit card statement has been revived as a mailing which is both transactional and promotional. CEO Tim Delahay reckons that this channel can overtake conventional direct mail.

Forget the fact that DSTi Output has three high speed Versamark inkjet presses, one of which is the first in the UK to offer four colour duplex. Forget that the company is the UK offshoot of a giant US operation that handles 43% of all first class business mailings in the US, has several plants one of which is half a mile from the front entrance to the back door, and that it is a New York Stock Exchange listed corporation. Forget too, that in the UK it has doubled capacity through an emphasis on lean manufacturing in the last couple of years with no adverse effects on service levels.

Chief Executive Officer Tim Delahay would like you instead to remember what the power of this business can deliver. And what that is, is paradigm shifting transactional print.

The company bought the Bristol business from GE Mailing Services in 2002, with the aim of introducing colour to the credit card statements sent out for GE Bank’s customers and growing the business on a commercial basis. Under Delahay, who joined four years ago, it has done just that. “GE wanted to differentiate their offering in the consumer credit card space,” he says. The bank runs the loyalty card schemes and provides finance to the customers of 40 different high street brands. Within these can be different levels of customer, typically silver, gold or platinum card holders, as well as different purchasing patterns. For some it is easy: a dress shop is not likely to have a broad range of customers. But a chain of department stores can have a very broad demographic. Through DSTi Output, they can all be addressed as individuals.

The company has added customers to the original core, with last year ending with the announcement that telecoms giant Orange had signed up. It is a slow moving business. A contract can take a year to negotiate and once settled can stay in place for five years or more. To encourage a move to a different supplier takes a very powerful argument, and Delahay has it.

Put simply, it is to use the power of colour to transform a billing statement into a marketing document, and along the way to explode the myth that colour is an expensive option. He accepts that if mono is compared with colour on a like for like basis, then colour is more expensive. But that is to miss the point. The digital colour that DSTi Output offers has greater impact than to make a statement more appealing. “We will save the customer money,” he says. This is the first part of the three-pronged proposition. Using a white paper solution, he explains, can save money by eliminating other elements in the document supply chain. By printing full colour images, directly on to white paper, there is no preprint element and no document storage to take into account. This can prove expensive when a change in regulations or interest rates renders everything that has been stored obsolete.

However, the real savings come after printing. Because the company prints digitally on to white paper, it can mail sort ahead of the printing stage, and because it can combine job runs, it can earn greater discounts by combining what would have been several separate jobs into one. So the different levels of customer for a storecard can be produced in a single run, instead of separate runs for each card type, as would be necessary with a preprinted job. “60% of a total campaign can be postage,” says Delahay. “If with us the print part is more expensive, the overall job is less. We will not give away our margins, but we will give away everybody else’s margins. We have removed the cost of preprint and removed the cost of holding stock.”

That alone would make the proposition appealing, but it is only one strand of the argument. A second concentrates on return on marketing investment. Using the transactional document to carry promotional marketing messages has an invigorating effect on response rates. Where normal direct mail is accustomed to single percentage point responses, the response to the message carried on the statement is close to 20% on average and can be as high as 27% he says. The reason is logical. “I sort my mail at home, and even though I’m in the business, will immediately discard the obvious direct mail pieces I’m not interested in. Even with a billing statement that I have to interact with, I am adept at whipping out the inserts without even looking at them. But I look at the statement with my coffee in the morning, then again in the evening, put it in a drawer until the weekend, check it again to deal with it and then file,” says Delahay. The point is that any message linked to the statement is going to be seen. And because the statement is printed digitally to a known customer base, the business rules engine that DSTi Output has is able to extract customer information and populate variable fields on the statement with a series of messages appropriate to that customer.

DSTi Output has a design team, located in Surbiton that has experience and expertise in working with clients to come up with the most effective designs that do not compromise the brand and which use the most effective colour combinations, both to drive response and which are suitable to the printing technology. The DSTi Output campaign definition tool can then be used by a client to build the marketing campaign, by deciding which types of customer to target and what messages they should see.

“This channel for marketing can be very persuasive to a financial director who sees the requirement to mail statements to customers once a month as dead money,” Delahay adds. They can now pass say half these mailings as a direct mail, so saving the most expensive, postage, element of the outlay.

The third leg of DSTi Output’s proposition is based around the quality that is integral to the way it works. Before the change of ownership, the company had adopted Six Sigma quality controls and has since added ISO competence. It has SLA figures of 100% and huge customer satisfaction feedback from regular attitudinal surveys. More recently it has been working with the customer first ethic of lean manufacturing. “When this is packaged up and presented to corporates, it becomes a compellingOUTPUT argument,” says Delahay. And it chimes with the mood of the times which is to concentrate on growing the amount of business a corporate will do with each of its customers rather than seeking to win new customers. The effort has shifted from selling a product to servicing a customer he says, explaining that this is why banks are starting to appoint the CXO - chief experience officer. And why what DSTi Output is talking about is finding a ready audience. “After we have talked with the CEO about how we align with his business needs, we then convince the finance director and lastly we talk to the marketing department,” he says.

"This is genuine document management, it's about owning the client communication process for our customer and 1-2-1 communication is the key." Tim Delahay

The offering goes beyond the printed product. Their DA Web system provides the means for customers to track and check their campaign at every point from the original artwork, based around selected templates, proofing, job tracking to execution via a web browser. Multi Bill is a means of compiling the different invoices that a consumer might receive from an organisation, for mobile phone, television channel, credit card and so on, into a single mailing to further reduce the cost of postage. It can talk about e-billing, again drawing on the US experience where DST is the largest operation of this kind. It can show how a financial customer can edit and have a customer letter approved within a 48 hour time frame rather than the six months needed to make a change on the mainframe computer system. It can equally manage a 48 hour turnaround from initial concept of a job to posting the mailing which can allow a customer to respond to wider events, say an unlikely England victory in a world cup, or in response to a competitor offer.

The obstacle is not the creativity that DSTi Output can bring to bear, but the imagination of the customer used to one way of working. Delahay is aware of this, saying that the company will often introduce its service in stages. “At first we will replicate how the client is working now, only they immediately gain the benefits from mail sort. Then we will switch to white paper, removing the preprint and the storage and finally we will introduce variable messaging. And then we can bring variability to the messages associated with different brands and gain the business uplift. For example, we could help a telecoms company which wanted to increase customer loyalty by offering the most effective package to its customers each month, and we can do this through the software we have developed.

“At the moment, we can generate a PDF for print and also send that PDF to a call centre attached to the entire customer history, so that when the consumer calls with a query about the offer he’s been presented with, the offer can be brought to the screen.

“This is genuine document management, it’s about owning the client communication process for our customer and one-to-one communication is the key.”

Forget the print technology that DSTi Output uses, this is the point that Tim Delahay wants everyone to remember.