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Color and Transaction Documents – A Trend On the Rise?

Digital color printing is not really a new technology, but utilizing color effectively in transactional documents is far from a proven art form. As the cost of digital color has continued to drop, the quality available has risen to higher and higher benchmarks. Has the cost/benefit equation of digital color technology entered a “sweet spot” where organizations find that making the move makes sense? Or, will it take more time for digital color to reach full-scale adoption in transactional document production? 

Regardless of the timeline, one thing is clear: As high volume transaction output (HVTO) professionals manage the transition it will be important to understand the most important trends with color and HVTO. OutputLinks asked its distinguished panel of experts for their perspective on the digital color adoption curve, and for some advice on making the right directional decisions. 

The conversion to color

“The ability to incorporate promotional messages within transactional print is driving the conversion to color,” says Richard Lord, manager, product marketing, Canon, USA. “We are finding that marketing groups see this as a great way to communicate with their customers,” he says. “In addition, the ability to personalize and customize the pieces delivers a tremendous amount of value and increases the overall effectiveness of the piece. With marketing driving this use of promotional messaging on statements, the need for high quality color graphics increases dramatically.”

According to Kodak’s Pat McGrew, EDP, director, industry marketing, transaction print, the effectiveness of color in transactional documents is clear. “Research shows that color printing increases our desire to pick out that particular item from the mail,” says McGrew. “Through the use of data and images to personalize and customize digital color printed materials, companies can create more effective customer communications that attract and hold the attention of their customers with relevant content.”  

Many of our experts feel that the confluence of customer database systems and high-speed variable digital color printing technology presents new opportunities for HVTO professionals.  “Attaining full color at high speeds, such as 1,000 pages per minute, appears to be the next ‘holy grail’,” says Holly Huggins, vice president and general manager of CSF and biller solutions at Metavante Corporation.

Huggins and Metavante offer these tips for color and high volume transaction output:

• Reinforce brand recognition by placing the company’s full color logo on each printed document
• Add full-color graphics like pie charts, bar graphs, and line charts to highlight important statistics in a visually appealing way
• Add color to targeted marketing messages for each customer or class of customer to encourage cross-selling of other products and draw attention to the messages
• Add color coupons to be redeemed for merchandise discounts

Begin with the end in mind

When it comes to using color in the HVTO environment, our panel stresses the importance of making sure that documents are designed with color in mind. “Color should not be used haphazardly, but for a purpose,” says David Monday, director, product management – DOC 1, Group 1 Software, A Pitney Bowes Company. “There is nothing worse than a document that has too much color added to it, or not enough. When not enough color is used, the impact of the message is greatly diminished and the value that you were attempting to add is minimal. Similarly, using too much color can create a busy design where nothing stands apart.”

Digital color technology enables companies to create personalized documents more accurately and vibrantly than ever before. Knowing your customer is essential in order to create this unique communication experience explains Kodak’s McGrew. “Look at your current customer-targeted documents,” she says. “Do you make the most of what you know about your customers? Could you redesign your statements to add color and space for more personalization and targeted offers? With digital color technology, messages can be targeted and personalized more accurately than ever before which creates a unique communication experience.” 

It’s no longer black and white

While the technology has been available for some time, our experts point to the following news. “The fact that color is just now becoming affordable to the HVTO market is crucial to its adoption in an industry that has been dominated by black and white print.,” says Monday of Group 1 Software, A Pitney Bowes Company. “There needs to be recognition by the industry that there is a good ROI for HVTO color.“

According to Julia Mowry, marketing manager – North America, Emtex, A Pitney Bowes Company, the use of color in transactional documents is on the rise. “Transactional documents have become critical customer communications vehicles. With added benefit of color and the use of CRM tools, the transactional document becomes a ‘TransPromo’ document that serves as a valuable selling tool  that increases  interaction with customers. In addition, looking at software vendors that have the capability to transform their legacy black and white transactional documents to a “TransPromo” customer communication document without having to re-write the host application to take advantage of today’s production color technology, regardless what the input or output pdl’s are.”

A business case for color
Denise Davert, vice president of marketing for Elixir Technologies, agrees. “The value of customer loyalty and retention is driving marketing organizations to seek more effective methods of communicating with their customers. The ability to completely personalize a document is a valuable method to stay in the front of customers.”

Davert from Elixir also points out that industry ROI models have matured, making it increasingly easier for vendors and purchasers to justify adopting color variable data printing. “Previous models simply considered the cost per page. Newer models take into account the purpose of the document and factor in response rates when calculating costs. Some even factor the cost to acquire or retain customers. The point is that a strong business case can now be made; typical response rates for direct marketing are listed at approximately 1-2% whereas a well designed dynamic document including color can fetch a 30% response rate or more.”

Davert expands her business case for color. She says, “Advances in technology are delivering higher quality, greater reliability and lower TCO. Per-page costs are now down as low as five cents, which industry experts have considered for years as the benchmark at which volumes would rise considerably.”

Job appropriate color

As color becomes more and more expected in high volume applications like statements and invoices, how color is incorporated becomes increasingly important. “Technology is at the point where we can provide the right color for what high volume customers need. That is, ‘Job Appropriate Color’,” says Guy Broadhurst, senior director, product marketing for Océ Digital Document Systems. “Océ is a leader in delivering job appropriate color, for example, with the color roadmap we’ve laid out for our Océ VarioStream 9000 product line. Customers today can print black plus one, two or even three colors, depending on the configuration they are ready for.” 

While costs have come down, Océ’s Broadhurst asserts that color is at least four times more expensive relative to black and white output. This means, put it to good use. “The more important question is what does color mean to you?” says Broadhurst. “The use of a specific highlight color for the company's logo is a good compromise between marketing’s branding needs and the desire for full color. Océ is one of the very few vendors who can manufacture any corporate color.”

Software and data enable improvements
GMC Software Technology is also seeing a significant increase in the use of color in the HVTO market segment. The company concentrates heavily on software technology development to accommodate and enable the use of color by its customers. GMC’s Jeff DeVoyd, VP of technology, says a key to implementing a successful transactional marketing program --- including the reliance on and use of color --- is having the correct software and technology to support it.

With the advent of software technologies that are much easier to use, even by non-technical resources, GMC’s DeVoyd envisions collaboration across many functional areas of the organization --- including outsource providers like commercial printers, direct marketing providers, ad agencies. “Sophisticated tools like GMC’s PrintNet document composition software incorporate advanced data handling and color capabilities, with rapid application design and composition, enabling highly time-effective design, maintenance, and delivery of high-volume, targeted communications documents rather than simple statements of accounts.”

The HVTO evolution – Highlight color to full color

COPI’s Al Cooper says that thanks to the introduction of inkjet printers, color has been a reality to PC users for some time now. “Today you can buy a good quality inkjet printer for under $100, and the ongoing expenses have dropped rapidly,” he says. But does Cooper believe that full color will follow a similar path in the high-end transaction printing industry?  “Yes, but I don’t think the reduction in cost will be as radical as we have seen at the desktop level.”

In spite of the comparatively diminutive adoption compared to the desktop environment, Cooper asserts that full color is moving into the HVTO industry in earnest. “This is evidenced by the industry’s AFP Consortium’s activities in developing and publishing standards for introducing full color support to the AFP Architecture. As an active participant, I can assure you that color is coming to the industry. Just don’t expect full color pages at five cents per page,” he smiles.

Cost per page drives four-color documents

While the cost-per-page of digital color has yet to rival traditional black and white, the price tag has become more attractive for many organizations. “For the last 5 years, Personix has utilized digital presses to produce high-quality full-color specialty cards,” says Dick DeTingo, product development manager at Personix. “Within the last two years we've seen increased interest in 4-color documents. This is due in large part to the decreased cost per page yielded by today's high-speed ink jet printers.”

According to DeTingo, in addition to the improved economics, higher print quality has resulted from modern DOD technology. “Coupled with paper specifically made for ink jet, the newer printers eliminate much of the poor quality reputation ink jet printers had in the past.  There are laser printers that will deliver moderately priced spot color solutions. However, the demand for spot color applications seems to be decreasing. This could be due in part to the improved attractiveness of four-color ink jet printing narrowing the economic difference between spot and four-color.” 

Moving forward

How best can HVTO professionals move forward with the adoption of digital color? “Our advice to HVTO professionals is to understand how color fits into their client's value proposition to their customers, and provide the solution that balances image quality and page cost,” says Personix’s DeTingo.

According to Harald Grumser, managing director of Compart Systemhaus GmbH, color will be a challenge for the next few years. “Not just for the HVTO professional,” he says, “but also for users. Hardware is available to print at reasonable prices, but the processes need to be changed. The goal will be to improve output while at the same time not having to adapt legacy systems. Nowadays it costs nothing to send color e-mails."

However HVTO professionals manage the transition to transactional color, our panel stresses the need for a well-thought plan. Monday, of Group 1 Software, A Pitney Bowes Company, puts things in perspective this way: “With the onset of color it is more important than ever for companies to develop a comprehensive document strategy for the lifecycle of their documents, from design through archiving.” Indeed, our panel is united in the advice that making the move to digital color will require a clear understanding of communications goals, technical trends and capabilities, and both the costs and benefits associated with color transactional documents.

We conclude with this final thought from GMC’s DeVoyd. “The value of color has risen considerably with the recognition that the transaction document is the one communication with the customer that absolutely needs to be opened, read and acted upon.”