xploredeliveryin2010beyondsession120100316 12729998500139-phpapp01

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E-Delivery in 2010 and Beyond

Prepared for: Xplor

Presented by:Kemal Carr, EDPMarch 16, 2010

MADISON | ADVISORS

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

About us

Madison Advisors provides thought leadership, strategic

consulting, and market researchto clients in the CCM, electronic

delivery, and print industries.

MADISON | ADVISORS3/18/2010 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

Management

Print Suppression & Multi-Channel Delivery

Campaign Management

Document Composition

TransPromo

EOMS & Workflow


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

MADISON | ADVISORS

BPA Participants

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http://www.broadridge.com/�

http://www.tsys.com/�

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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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Results…

MADISON | ADVISORS3/18/2010 Madison | Advisors 10

Results…

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Best Practice

Average

Company XYZ

COST TECHNOLOGY OPERATIONAL EFFICIENCY STRATEGY ORGANIZATION


Online Trends *

*http://www.pewinternet.org/Trend-Data/Online-Activities-20002009.aspx

December 2009 survey: 74% of American adults use the internet.

Percentage that “Do any banking online” : 57%


Multi-channel Delivery

63% of enterprises have established moderately to very aggressive hardcopy suppression goals.


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


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


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)

8-12% 17-25% 26-50% 51-75%

NoFive-Year

GoalBanking &

Credit Cards17% 65% 17%

Financial Services

50% 33% 17%

Insurance 17% 50% 33%

Utilities & Telcos

22% 44% 34%


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”

* http://www.usps.com/financials/_pdf/annual_report_2009.pdf


Multi-Channel Trends – Part Two

USPS* reports:

Revenues “Although the volume decrease in 2008 was significant, the price increase held revenue flat compared to 2007.”

*http://www.usps.com/financials/#H6

Type Revenues Volumes

First Class 53% 35% 47%

Standard 26% 47%


Multi-Channel Trends

Green Movement gaining momentum 1) Firms now offering Green incentives2) Firms attempting second subscription wave – new accounts

default to paperless

Archiving concerns diminished 1) Firms holding multiple years of historical documents2) Timeliness of paper statements questioned

Affluent, mobile, HNW customers recognize paperless benefits Insurance firms equate with lower risk!!


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)


Adoption Techniques

Organizations are looking for ways to entice paperless adoption


Adoption Techniques

Some techniques work better than others…


Adoption

Source: EDSf , Effective Color Gamut Transpromo, 2008


Multi-Channel Trends

February 2009


About the Survey Set

Participants AnnualRevenue

EnvelopesMailed

Number of Accounts

Banking & Credit Cards22% of Respondents

Bank of AmericaBB&T | CapitalOne

Citizens Bank | HSBCA top-ten commercial bank

$15Mto

$10B+

83MMto

420MM

20MMto

40MM

Financial Services(investment houses,

broker/dealers, & asset management firms)

22% of Respondents

Charles Schwab Fidelity | ING

Pershing | The PrincipalUBS

$500MMto

$10B+

30MMto

500MM

3MMto

80MM

Insurance(property & casualty, life, health,

& annuities)22% of Respondents

Aetna | AllstateAmerican Family

NationwideProgressive | USAA

$5Bto

$10B+

75MMto

300MM

3MMto

17MM

Utility and Telco34% of Respondents

American ElectricAmeren | Entergy

MidAmerican | NSTARPepco | SCANA

VerizonWE Energies

$20Mto

$10B+

1.5MMto

278MM

1MMto

16MM


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



UPS Rate Hikes

Add’l Resource Requirements

Improved Customer

ExperienceCustomer

Preference

Reduce Postal Spend

Reduce Other

Operations Cost

Green 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 3.5Utility and

Telco 4.0 4.25 4.5 4.25 4.75 3.5 4.0

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”



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


Print Suppression Goals

63% have established moderately- to very-aggressive suppression goals.


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!


Strategy


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


Documents Online


Messaging Methods & Effectiveness

SCALECompany Usage: 20% incrementsFrequency: 1=Rarely Used 5=Very High Frequency UsageEffectiveness: 1=Very Poor Effectiveness 5=Highly Effective


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


Internet Adoption *

Formally an inhibitor of e-Delivery solutions, Internet Adoption continues to expand, extending electronic delivery to an increasingly wider audience

* http://www.pewinternet.org/Trend-Data/Internet-Adoption.aspx


TransPromo Future?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Yr 0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10

Suppression Impact on Transactional Print Volumes

Mono Color

e Delivery


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?

MADISON | ADVISORS

www.madison-advisors.com

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