1. E-Delivery in 2010 and Beyond
Prepared for: Xplor
Presented by:
Kemal Carr, EDP
March 16, 2010
1
2. Agenda
Time Session Facilitator
12:00 – 1:30 Introduction / eDelivery Market Study Kemal
1:30 – 2:15 Solimar’s Easy-TP case study Barry Key
2:15 – 2:30 Break
2:30 – 3:30 PFG TransPromo & Multi-Channel Kemal
3:30 – 3:45 Break
3:45 – 4:40 TransPromo & ECM Market Studies Kemal
4:40 – 5:00 Q&A – wrap up All
5:00 Happy Hour All
MADISON | ADVISORS
3. About us
Madison Advisors provides
thought leadership, strategic
consulting, and market research
to clients in the CCM, electronic
delivery, and print industries.
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4. Madison Advisors’ Background
Assist organizations with document strategies –
print and electronic – including selection and
evaluation decisions
Objective expertise – we do NOT sell hardware,
software, or integration services
Analyst firm behind industry-renowned Best
Practices Analysis (BPA) Study
Ongoing research across a variety of markets:
Customer Communications Campaign Management
Management Document Composition
Print Suppression & Multi- TransPromo
Channel Delivery
EOMS & Workflow
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5. Best Practices Analysis (BPA) Objective
Identify best-in-class organizations
Independently evaluate a wide variety of solution
providers
Establish an industry benchmark
Establish relationships and gather current data for
other client engagements
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7. Document Trends
79% of BPA firms utilize
mainframe-based
document layout and
composition systems
Only 15% of in-house BPA
firms have digital color
capabilities
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9. Results…
6.0
COST TECHNOLOGY OPERATIONAL EFFICIENCY STRATEGY ORGANIZATION
5.0
4.0
3.0
2.0
Best Practice
1.0
Average
Company XYZ
0.0
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10. Online Trends *
December 2009 survey: 74% of American adults use the internet.
Percentage that “Do any banking online” : 57%
3/18/2010 *http://www.pewinternet.org/Trend-Data/Online-Activities-20002009.aspx MADISON | ADVISORS 11
11. Multi-channel Delivery
63% of enterprises have established
moderately to very aggressive
hardcopy suppression goals.
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12. 2009 Multi-Channel Market Study
A new study; GA in Nov 2009
To expand our understanding of the
actual print suppression rates, identify
lighthouse verticals / applications, and
validate the techniques that are driving
those successes
To better understand organizational
and consumer behaviors around
hardcopy suppression, highlight key
trends, and capture document owner
and operations behavior, beliefs, and
future intentions
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13. Market Sizing
The bulk of mail volume consists of transaction
documents and direct mail
Transaction documents – statements, invoices,
evidence of coverage, contracts, proposals, trade
confirmations, 401K or other retirement documents,
brokerage account information, insurance policies, and
checks
Direct mail – a type of advertising medium in which
messages are sent to target customers through the
mail to elicit some action, such as making a purchase,
making a donation, or to taking an action such as
voting
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14. Situation Assessment
Every firm (27) surveyed by Madison Advisors has a
customer communications strategy (77% have
formal, documented strategies; 23% informal)
Overall e-suppression rates for are generally below 10% today
(Dalbar: 65% of financial services firms are < 10% adoption)
Majority of firms have five-year suppression rate goals of 26 - 50%
The “Why” is obvious…the savings are BIG (i.e. Financial Services
$12 - $15 per customer per year for print/mailing of statements /
confirms / tax reports)
No
Five-Year
8-12% 17-25% 26-50% 51-75% Goal
Banking &
17% 65% 17%
Credit Cards
Financial
50% 33% 17%
Services
Insurance 17% 50% 33%
Utilities &
22% 44% 34%
Telcos
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15. Multi-Channel Trends – Part One
USPS* reports FYE 2009:
Lost $3.8B, after 2008 loss of $2.8B
1st class mail down 8.6% YOY
Standard mail down 16.5% YOY
Revenues decline 9.1% for 2009
“A significant portion of the 2009 loss is attributed to the
unprecedented decline in mail volume… there is some evidence
that the recession has accelerated the diversion of First-Class
Mail”
“37% Decline in 1st Class volumes in next 10 yrs”
“$238 B shortfall during the next decade”
3/18/2010 * http://www.usps.com/financials/_pdf/annual_report_2009.pdf MADISON | ADVISORS 17
16. Multi-Channel Trends – Part Two
USPS* reports:
Type Revenues Volumes
First Class 53% 35% 47%
Standard 26% 47%
Revenues
“Although the volume decrease
in 2008 was significant, the
price increase held revenue flat
compared to 2007.”
3/18/2010 *http://www.usps.com/financials/#H6 MADISON | ADVISORS 18
17. Multi-Channel Trends
Green Movement gaining momentum
1) Firms now offering Green incentives
2) Firms attempting second subscription wave – new accounts
default to paperless
Archiving concerns diminished
1) Firms holding multiple years of historical documents
2) Timeliness of paper statements questioned
Affluent, mobile, HNW customers recognize paperless benefits
Insurance firms equate with lower risk!!
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18. Situation Assessment
Significant transactional volume migration by those
clients pushing “e”
Retirement Services made an aggressive push (forcing users to
decline e-adoption at every log in), year-over-year statement
envelope counts are down 71%
Implemented a $2 customer fee for paper, year-over-
year statement envelope counts are down 13%
Ran a traditional opt-in campaign, year-over-year statement
envelope counts are down 10%
(1) implemented employee suppressions, reducing
statement envelope volumes by 8,000, (2) moved
towards a statement with 50% less images (“at-a-glance”
statement)
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19. Adoption Techniques
Organizations
are looking for
ways to entice
paperless
adoption
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23. About the Survey Set
Annual Envelopes Number of
Participants
Revenue Mailed Accounts
Bank of America 20MM
$15M 83MM
Banking & Credit Cards BB&T | CapitalOne to
to to
22% of Respondents Citizens Bank | HSBC
$10B+ 420MM 40MM
A top-ten commercial bank
Financial Services Charles Schwab
(investment houses, $500MM 30MM 3MM
Fidelity | ING
broker/dealers, & asset to to to
management firms)
Pershing | The Principal
$10B+ 500MM 80MM
UBS
22% of Respondents
Insurance Aetna | Allstate
$5B 75MM 3MM
(property & casualty, life, health, American Family
to to to
& annuities) Nationwide
$10B+ 300MM 17MM
22% of Respondents Progressive | USAA
American Electric
Ameren | Entergy 1MM
$20M 1.5MM
Utility and Telco MidAmerican | NSTAR
to to to
34% of Respondents Pepco | SCANA
$10B+ 278MM 16MM
Verizon
WE Energies
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24. Key Trends & Drivers
Reducing postal spend is the # 1 driver across all
verticals
Reducing postal spend was an
average 4.9 out of a possible 5.0
Generally, “soft” drivers, such as
customer experience and green
initiatives, ranked much lower
than “hard” drivers
Utilities and telcos (a survey
segment dominated by energy
utilities) gave the 2nd lowest
score to USPS Rate Hikes and
Reduce Postal Spend
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25. Key Trends & Drivers
Summary of key drivers by vertical for print
suppression (average scores)
Scores are based on a scale of 1-5 where 1 = “Not
Important” and 5 = “Very Important”
Reduce Reduce
Improved Other
UPS Rate Add’l Resource Customer Customer Postal Operations Green
Hikes Requirements Experience Preference Spend Cost Movement
Financial
Services
3.6 2.6 3.6 4.25 4.8 3.6 3.2
Banks &
Credit Cards
4.25 3.25 4.25 3.75 5.0 4.5 4.25
Insurance 4.5 3.5 4.0 4.5 5.0 4.5 3.5
Utility and
Telco
4.0 4.25 4.5 4.25 4.75 3.5 4.0
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26. Key Trends & Drivers
Web-based promotion and intervention is the # 1
mechanism for converting customers to paperless
Telephone interaction (call center, broker) is effective
New account signup is the most effective point to enroll
customers in paperless programs
“Green” programs are effective, although potentially
short-term, drivers for consumer conversion
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27. Print Suppression Goals
63% have established
moderately- to very-
aggressive suppression goals.
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28. Market Sizing – Suppression Impact
Opportunity
In 2008, Madison Advisors estimates the North American
market for TransPromo printed in full digital color to be
19.3 billion impressions; our forecast is for this to grow to
40.9 billion impressions by 2012
Monochrome TransPromo images available for full color
transfer are estimated to be over 200 billion!
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30. Outsourcing
Do you plan to work with outsource providers for
your e-delivery and e-messaging programs?
Overall 57% of
companies are
either already in-
house or
planning to
significantly
REDUCE
outsourcing over
the next 12-24
months
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32. Messaging Methods & Effectiveness
SCALE
Company Usage: 20% increments
Frequency: 1=Rarely Used 5=Very High Frequency Usage
Effectiveness: 1=Very Poor Effectiveness 5=Highly Effective
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33. Impacts to Industry
Declining hardcopy volumes
e-Delivery demand likely to outstrip demand in
near term
Large firms are more likely to handle e-messaging in
house than mid-size firms
Many firms have captured the “low hanging fruit”,
however need assistance to get to next level
Regulatory issues still put a cap on e-Delivery
efforts for many verticals & document types
New market leaders to emerge
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34. Internet Adoption *
Formally an
inhibitor of e-
Delivery
solutions,
Internet Adoption
continues to
expand,
extending
electronic
delivery to an
increasingly
wider audience
3/18/2010 * http://www.pewinternet.org/Trend-Data/Internet-Adoption.aspx MADISON | ADVISORS 36
35. TransPromo Future?
Suppression Impact on Transactional Print Volumes
100%
90%
80%
e Delivery
70%
60%
50%
40%
30%
20%
10%
0%
Yr 0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10
Mono Color
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36. Future Studies
Extend research
N. American Round 2 – Launch June 2010
Western Europe – Launched February 2010
ANE – Launch April 2010
Assist firms with e-Delivery strategies
Questions to consider:
What is the future document delivery model look like?
How your organization can prepare for that change?
What steps are necessary to win market share?
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