Nov 27, 2007
HVTO Market Leader: DST Output
Part One: At the forefront of the HVTO Technology Evolution... delivering 2.6 Billion Customer Communications Around the Globe
DST Output is a customer communications company. Building on 35 years of experience, the outsource service provider offers integrated print-and-electronic billing, customer care and customer communications solutions to many of the country's largest financial services, communications, insurance, healthcare and utilities companies. With leading-edge technology, patented systems and a wealth of experience, DST Output designs, produces and delivers statements and other transactional documents of high quality and marketing impact.
“We help our clients get the most value out of their communication from a cost, quality, speed and customer service perspective,” says Frank Delfer, executive vice president of technology and chief technology officer for DST Output. “Companies outsource to us because we strive to be innovative in customer communications... both print and electronic.”
Reaching out to nearly every home and every business with its technology-driven customer communication solutions, DST Output prints, mails and electronically delivers more than 175 million bills, statements, marketing materials, policy statements, explanations of benefits and other business-critical customer communications per month.
With nearly 31 years of experience and expertise, Delfer leads DST Output’s technology organization, comprised of systems development, engineering and maintenance, product management, postal relations and eSolutions. He says the company has more than 3,000 employees, operating revenues in the $500 million range, and produces more than 2.1 billion print and electronic communications annually in the U.S. alone.
In 2006, DST Output and its affiliates produced more than 2.6 billion customer communications, delivered throughout the United States, Canada and the U.K. “We are the largest third-party First-Class mailer in the United States,” says Delfer. “And we have a strong track record of producing steadily increasing volumes every year during the course of our existence.”
DST Output provides its output solutions to many of the country’s largest companies. “We currently service four of the top 10 wireline providers; five of the top 10 wireless providers; and five of the top 10 multichannel providers,” says Delfer. “In addition, we service 33 of the top 50 mutual fund complexes; three of the top 10 brokerage firms; and two of the top 10 defined contribution pension providers.”
Overall---while the numbers look good---DST Output’s greatest success is in helping its clients create better customer experiences and optimize their monthly communication and dollars invested. “What sets us apart is that we’re constantly driving innovations in online and printed statements to help our clients get the most value out of their communication,” says Delfer. “Historically, we have been at the forefront of technology evolution.”
Digital Press Technology Platform
Indeed. DST Output is on the forefront of the industry’s technology evolution. Recently, the company completed a two-year implementation of its high-speed, color printing and inserting platform called Digital Press Technology (DPT). With this innovation, DST Output became the world’s largest inkjet systems printer, propelling the industry forward in a rapid transition from toner-based to inkjet printing technology.
Frank Delfer at DST Output.
"The DPT platform enables DST Output to offer a variety of color and graphics printing options, including highlight color, select area color and full/anywhere color,” say Delfer. “These color variables let DST Output clients choose how much and where to place color to increase readers’ attention to a particular area of the document. Further, DST Output’s DPT provides an option for forms color, which allows the simultaneous color printing of a client’s corporate logo, banner and form along with monochrome bill and statement data. This eliminates the need for preprinted forms because both the color and monochrome images and text are applied as the paper passes through the high-speed press, creating the finished color document from blank paper in one integrated continuous process.”
When combined with DST Output’s Campaign Manager software, DPT enables affordable TransPromo capabilities---integrating transactional printing with proactive promotional marketing offers based on customer demographics and buying habits.
“DPT creates a more cost-effective process and enables TransPromo documents that can replace marketing and promotional materials that traditionally are sent separate from transaction documents,” says Delfer.
DST Output expects to print approximately 785 million statements and 10.5 billion images on the platform this year.
To be continued…
In part two, read more about DST Output and get additional insights from the OutputLinks interview with Frank Delfer, executive vice president of technology and chief technology officer, DST Output.
HVTO Market Leader: DST Output
Part Two: Outsource for Success
As a leader in high volume transaction output (HVTO) and integrated print-and-electronic billing, DST Output produces a yearly average of 2.1 billion print and electronic customer communications in the U.S. alone. With 35 years of experience, DST Output provides integrated print-and-electronic billing, customer care and customer communications solutions to many of the country's largest financial services, communications, insurance, healthcare and utilities companies.
Tipping Point
On the forefront of innovative transaction-output, DST Output’s Frank Delfer, executive vice president of technology and chief technology officer, believes that statement and billing output is at a tipping point. “Companies are beginning to realize that they are wasting money with the old techniques and the new technologies, such as Digital Press Technology (DPT) and TransPromo, are changing the game,” he says. “Customers are demanding better experiences. And with the successful convergence of the data center and graphic arts environments, we are seeing direct marketing morphing into our transactional communications.”
[editor’s note: see Part One for more on Digital Press Technology or DPT]
Delfer adds that the biggest factors in play at the moment are the new postal rates, inkjet printing technology, print/electronic integration and campaign software tools that are driving the transactional-promotional trend.
“We’ve received a lot of positive feedback from our clients who are implementing TransPromo capabilities,” explains Delfer. “Essentially, by integrating promotional messaging into their customer statements they are beginning to experience higher returns in comparison to other methods such as traditional direct marketing. Some have told us that the TransPromo program has become one of their better performing marketing channels and that it has become an advantage for them in their marketplace.”
Big Rewards for Costco
One DST Output client that benefits from the TransPromo revolution is Costco, which uses DST Output’s Campaign Manager solution to implement a membership renewal reward program. Each month, DST Output produces full-color, graphic-rich Costco renewal statements and reward gift certificates to about one million of Costco customers in the U.S., Canada and Puerto Rico.
DST Output implemented this highly-effective program in May, 2005, and Costco is very pleased with how DST Output has helped them target its audiences and personalize messages on statements at various membership levels. “In effect, this campaign management solution helps Costco enrich its customer relationships and retain its customers while building loyalty and interest in Costco products and services,” says Delfer.
Electronic Solutions playing increasing role
Certainly, many companies like Costco are taking advantage of DST Output’s expertise and high-impact solutions. However, with DST Output’s campaign management software, clients are not only able to target and customize content and graphic images at the individual statement level for their printed material, they’re also able to do so for their electronic customer communications as well. According to Delfer, “This is an area that often gets overlooked---the tie-in between the print and electronic TransPromo targeted capabilities.”
DST Output will celebrate the tenth anniversary of its eSolutions capability in December. Seemingly under the radar over the past decade, the eSolutions offering has proven to be an integral part of DST Output’s business, with more clients adopting its integrated print and electronic capabilities.
“Adoption rates continue to grow at a slow, steady pace and there is a younger generation of financially independent consumers who are likely to drive the electronic trend higher,” says Frank. “This presents opportunities for our clients to communicate and up-sell to these consumers with messaging that can be targeted and synchronize with their print delivery channel.”
Outsource for Success
Delfer believes that HVTO outsourcers are a primary force in demonstrating how to maximize the capability and ROI of HVTO technology. He says this is true because outsourcers like DST Output have the output volumes to be able to achieve economies of scale that are impossible for most companies to reach on their own. “It’s also because we are able to leverage our experience and resources to achieve optimal speed, quality and performance in a high-volume environment,’ he says.
Delfer points out that many companies evaluate most of their billing operations based on production costs. But the costs---and opportunities to reduce costs--- aren’t necessarily in printing. “They’re spread throughout all the other aspects of billing and statements---data center, integration with CRM systems, logistics, postage, information design and software,” explains Delfer, and this is where DST Output can help. “By focusing too much on printing operations and not enough on the holistic process, companies overlook opportunities to cut costs, cut billing cycles and get more value from TransPromo statements that reduce cost in other parts of the enterprise or increases revenue and profit.”
Perfect Storm
At the moment, DST Output is poised to leverage changes in the industry. “Right now, for us, we believe it’s a perfect storm,” says Delfer. “It’s the combination of the reduction in postal rates for additional ounces of First-Class mail, our new DPT platform that enables cost-effective color document production, the integration of print and electronic communication channels, and our campaign management software capabilities. These factors make it extremely attractive for our clients to take full advantage of the many TransPromo capabilities including the application of color, graphics and targeted marketing.
Looking Ahead
What is DST Output’s strategy for the future? The company’s philosophy is to add superior value in every phase of the process from data entry, design, production and finishing, marketing and print/electronic delivery. “We believe we are a leader in this industry because we are driving innovations in all phases of the business, helping our clients maximize the total value of each communication,” says Delfer. “For me personally, I just want to convey my thanks to my colleagues at DST Output and throughout the industry. It’s an exciting time to be in this field and to see the results of our combined efforts come to fruition.”