Dec. 29 2006 12:23 PM

Virtually everyone in the customer messaging industry appreciates the power of the monthly bill or account statement to collect revenue. After all, that's the primary reason our industry exists. It's why so much time and effort is invested to assure the efficiency of the entire statement production and delivery effort: To collect money owed as promptly and cost-effectively as possible.


But in recent years, channels of communication have proliferated and consumers are now inundated by a plethora of marketing messages. And the monthly account statement has taken on a broadened role as the "Monthly Appointment with the Customer."


Collecting what is owed quickly and cost effectively is still critical. But increasing attention is now being given to the relationship-building and revenue-producing capability of the monthly bill or statement. And while there has been much success in exploiting the carrying capacity of the envelope to generate added revenue principally by enclosing a mix of pre-printed inserts the use of the actual statement document itself has been woefully underutilized until now.


"The monthly statement is the quintessential regular communication with the customers of any business," says Larry Rebenack, senior director of IT Print Services for Qwest Communications International, a telecommunications firm based in Denver, Colorado. "It communicates a sense of quality and showcases the priorities of the firm, particularly how much individual customer relationships are truly valued."


Recent advances in technology, according to Rebenack, now make it possible to develop and deliver highly targeted, value-added messages which can be displayed in the unused "white space" of virtually every statement in far less time and at a fraction of the cost of either stand-alone direct marketing appeals or the pre-printed inserts now routinely enclosed with monthly account statements and bills.


However, Rebenack is quick to point out that it is not just the technology that makes the difference, but rather how it is used. "Customers do not want to be bothered by appeals that exist solely to make money for a business," he says. "That's the whole premise behind the national "Do Not Call" registry. Customers are interested in value," he continues, "in offers that are highly targeted to their needs and wants. That's why any white space or statement-messaging effort must deliver value to be successful."


As an example, he points to telecommunications, where his firm is committed to the "Spirit of Service," which is aimed at providing value, options and outstanding service to customers. "Qwest is now planning to offer bundles or packages of services, so consumers can access added features, more services or more robust services at a lower cost," he says.


"It only makes good business sense for us to make highly targeted appeals to our customers," says Rebenack. Since the firm already knows what services customers in similar geographic areas or demographic profiles value, such as high-speed Internet access or custom games or even music, it is easy to custom-tailor offers to meet those specific needs.


Additionally, the statement document is ideally suited to delivering one-to-one marketing messages. "Television or newspaper ads can reach a lot of people quickly," he says. "But these shotgun messages are really tailored to everyone or to no one." As an example, Rebenack points to emerging services like DSL, which are not yet universally available. "Much of the marketing support that promotes a DSL capability across a wide geographic area can be wasted," he continues. Worse, such messages might even create dissatisfaction among customers who want the new capability, but are unable to get it.


The alternative to shotgun or mass advertising is direct mail marketing, which can be highly targeted according to geography, demographics and the extent of the business relationship. Direct mail is widely proven to be successful, but it can also be time consuming and costly to produce, depending on the complexity of the package and the volume mailed.


It is not uncommon for some organizations to budget as much as a dollar a piece for direct mail solicitations in view of the time and effort involved in creating the appeal and package, as well as in analyzing results and tracking the success of the campaign.


But including that same marketing message on the statement document itself provides two important advantages. First, it gets to the right person with no wasted or unneeded exposure or circulation. And second, it gets opened and read, because people open and read their monthly bills and statements.


Of course, using the statement to deliver marketing messages assumes that the statement itself is accurate, with every page included in the right order and properly addressed and delivered to the correct recipient. And accuracy, or rather perfection, is something that Rebenack has perfected. His twin statement processing units, one in Omaha, Nebraska, and the other in Albuquerque, New Mexico, have just completed five straight years of statement production without a measurable error. That's an improbable streak of more than 600 million consecutive monthly account statements without a single mistake normally inherent in high-speed production.


There are three principal ways to use the available space on the statement document as a message platform, according to Rebenack.

1. Use the leftover or underutilized space on either the front or back of the statement for text messages and simple graphics using black ink and existing print resources.

2. Fill the envelope to the one-ounce limit or subsequent one-ounce limits by producing additional pages in the same style as the statement document. The additional full sheet can feature single or multiple marketing messages and should be easily accommodated by existing inserting platforms.

3. Create a high-quality or photographic image via a separate data feed and print the image on the statement at the time of insertion. This approach is still being developed; the technology is slower, the inserting platforms must be retrofitted to accommodate the extra data feed and the cost-per-print image is higher. But it may soon be used for extremely valuable customers.


Indeed, Rebenack believes that color may not be worth the investment, at least not right now. Why? Because "color is associated with advertising, and the point of the statement message is to deliver value to the customer. Black ink is still more associated with valuable news and information."


As for costs, the advantage to statement messaging couldn't be more compelling. A typical direct mail marketing appeal is often budgeted at a dollar a piece. Pre-printed inserts may be estimated at a cost of a penny each


But a marketing message printed on the statement may cost only one-one thousandths of a cent a piece, or a little more than the cost of the toner. (This estimate does not include the cost of creative.) For comparison, a color image on the statement might cost one-third of a cent, but there are also preliminary costs to incur and it may put throughput at risk.


"There are also some data-processing challenges to overcome," adds Rebenack, who points out that a sophisticated format engine that allows for conditional processing will be required. In effect, the system must be capable of looking at the contents of a bill and making informed judgments about what the customer might need or benefit from. "But if a company can make an offer to a brand new customer, it ought to be able to make an informed offer to an existing customer," says Rebenack.


Each statement message will also be comprised of three key parts: (1) a header, which will · use the customer's name and the specific product or service name or benefit; (2) the marketing text, possibly with a generic image in a gray scale of fairly high resolution that can be easily imported; and (3) a trailer, which is a specific call-to-action emphasizing the ideal entry point into the sales channel. These entry points could encompass a variety of options, including, but not limited to, an 800 number, a self-service Web page or an assigned sales representative.


Rebenack also acknowledges that statement messaging requires a sophisticated tabling mechanism capable of: storing hundreds of possible messages, images, headers and trailers; composing and matching those messages with the target; and tracking the results of the offers and the campaign to assure future offers are ever more effective.


But once that system is up, he expects the time required to prepare and deliver a highly targeted offer to collapse. A pre-printed insert currently consumes about 90 days from creative through production, shipping, storage and inserting. With statement messaging, the essence of that same offer can be prepared and delivered in about 48 hours.


While the cost and time advantages of statement messaging may be overwhelming, Rebenack believes that the approach will be successful only if it is firmly rooted in value. "Customers do not want to be bothered by unnecessary and unsolicited sales pitches," he says. "The national Do Not Call registry, the increasing efforts to block 'spam' and the new HIPAA legislation all underscore the consumer's desire for privacy."


Yet consumers still desire information that is useful and helpful. That's why newspapers, magazines, cable TV channels as well as many other forms of the media continue to succeed and proliferate.


"The challenge for the customer messaging industry," according to Rebenack, "is to use the statement to build relationships as well as generate revenue. And it will succeed only if messages are highly targeted and offer the consumer real value."


George Linkletter is a marketing consultant who specializes in customer messaging. You can reach him via e-mail at