Capitalize on the Enterprise Shift to Outsourcing of Print and Digital

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1 Keypoint Intelligence 1 Capitalize on the Enterprise Shift to Outsourcing of Print and Digital Joe Zurawski Vice President Solution Strategy Matt Swain Group Director

2 Capitalize on the Enterprise Shift to Outsourcing of Print and Digital Matt Swain Group Director Business Development & Customer Communications Advisory Services June 6, 2018 Keypoint Intelligence 2

3 Keypoint Intelligence 3 Agenda State of Printed & Digital Transactional Communications Delivery Leveraging the Outsourcing Opportunity TPI Case Study from Quadient Conclusions & Recommendations

4 Keypoint Intelligence 4 State of Printed & Digital Transactional Communications Delivery

5 Keypoint Intelligence 5 The Customer Communications Delivery Value Chain Enterprises Production Delivery Postal Delivery Services Recipient Technology Vendors Consumers In-house Production Service Providers E-Delivery Service or Commercial Platforms Outsourced Production Source: Keypoint Intelligence-InfoTrends, 2017

6 Keypoint Intelligence 6 Primary Transactional Application by Industry Q: For which services do you receive transactional communications on a regular basis? Banking/Financial (N=1,784) Healthcare (N=778) Insurance (N=1,158) Telecommunications (N=1,479) Utilities (N=1,416) Credit Cards Medial Car Insurance Internet Electricity Base: Consumers in North America who receive transactional communications for these services Source: Annual State of Transactional Communications: Consumer Survey, Keypoint Intelligence-InfoTrends, 2017

7 Keypoint Intelligence 7 Primary Transactional Channel by Industry Q: What type of ELECTRONIC distribution channels do you expect to use for your transactional communications in TWO YEARS? Banking/Financial (N=53) Healthcare (N=52) Insurance (N=37) Telecommunications/Utilities (N=34) Web Portal A Mix SMS Base: Enterprises in North America Source: Annual State of Transactional Communications: Business Survey, Keypoint Intelligence-InfoTrends, 2017

8 Example: Tracking an AT&T Customer Journey Keypoint Intelligence 8

9 Keypoint Intelligence 9 Interaction Summary: Initial Outreach Bill Pay Mail Day 1 Day 66 Outreach Installation Reward Redemption Bill Arrives Bill Paid AR

10 Keypoint Intelligence 10 Interaction Summary: Initial Outreach Bill Pay Digital Day 1 Day 66 Outreach Installation Reward Redemption Bill Arrives Bill Paid AR

11 Keypoint Intelligence 11 Scan this code from your mobile device. Keep up-to-date with the AT&T Reward Tracker

12 Keypoint Intelligence 12 Direct mail piece encouraging me to download the mobile app.

13 Keypoint Intelligence 13 I look at most of the direct mail that I receive. 69% Agree 21% Neutral 10% Disagree N = 2,000 consumers in the US and Canada Source: Annual State of Marketing Communications Survey, Keypoint Intelligence-InfoTrends, 2018

14 Keypoint Intelligence 14 Direct Mail is the Best Way to Reach a New Customer Q: For companies that you don t have an existing relationship with, what is the best way for them to send you marketing messages? I d prefer not to receive any 18% No preference 13% A combination of direct mail and digital marketing communications 16% Don t know 3% Direct mail 30% Digital marketing communications 21% Direct mail is the best way to establish a new relationship with consumers N = 2,000 consumers in the US and Canada Source: Annual State of Marketing Communications Survey, Keypoint Intelligence-InfoTrends, 2018

15 Keypoint Intelligence 15 Highly Personalized vs. Generic Q: How much more likely are you to open or review a highly personalized marketing message than generic one? Equally likely 13% Less likely 2% Don t know 3% Much more likely 28% 82% of respondents are more likely to engage with highly personalized marketing messages Somewhat more likely 54% N = 1,211 Consumers in the U.S. and Canada who often or frequently receive highly personalized marketing messages Source: Annual State of Marketing Communications Survey, Keypoint Intelligence-InfoTrends, 2018

16 Keypoint Intelligence 16 Purchases Influenced by Direct Mail Q: Have you purchased a product/service in the past 12 months as a result of interacting with a direct mail piece? Don t know 12% No 32% Yes 55% N = 1,674 Consumer Respondents in the U.S. and Canada who respond to direct mail Source: Annual State of Marketing Communications Survey, Keypoint Intelligence-InfoTrends, 2018

17 Inconsistent Salutation Across Communications Hello Hello Valued Customer Dear Valued Customer Hello matt Dear matt Dear Matt Swain Dear matt swain Keypoint Intelligence 17

18 Electronic-Only Adoption Rates Keypoint Intelligence 18 Electronic-Only Adoption Bills & Statements by Industry Banking/Financial Healthcare Insurance Telco Utilities Banking/Financial Healthcare Insurance Telco Utilities Electronic only adoption varies by industry, but moderate growth is expected in all categories. Telecommunications are leading the way in electronic adoption, whereas healthcare is lagging behind (Actual) 2017 (Actual) 2018 (Actual) 2019 (Estimated) 2020 (Estimated) 2021 (Estimated) N = 2,000 Consumer Respondents in North America Source: Annual State of Transactional Communications: Consumer Surveys, Keypoint Intelligence InfoTrends, Notes: The data from 2016 included U.S. residents only. Values for are calculations based on anticipated growth rates

19 Keypoint Intelligence 19 Bills and Statements Get Opened and Read! Q: Which of the following documents received by mail do you open and read? Statements Bills Loyalty/Rewards program information Coupon packs Informational mail, existing relationship Privacy notices Advertising mail, existing relationship Advertising inserts in bills/statements Credit card offers 58% 96% 95% 90% 84% 83% 76% 71% 66% 0% 20% 40% 60% 80% 100% N = 2,000 consumers in the U.S. and Canada Source: Annual State of Transactional Communications Consumer Survey, Keypoint Intelligence-InfoTrends, 2017

20 Keypoint Intelligence 20 State of Paper-Based Communications Over 88% of respondents are still receiving some paper versions of their transactional communications also accessible online. Among these respondents, the most popular reasons for wanting to receive paper communications include: Wanting a hard copy for records As a reminder to pay As a security precaution These respondents also stated that the following would make them more likely to go paperless: Incentives Being charged a fee to receive paper versions Base: Consumers in North America Source: Annual State of Transactional Communications Consumer Survey, Keypoint Intelligence-InfoTrends, 2017

21 Paperless Policies in Place Today Q: Which of the following policies do you have in place for transactional communications TODAY? Customers choose when to turn off paper 50% Paper is automatically turned off immediately after electronic adoption New customers are defaulted to paperless delivery 33% 32% Trial offer to get paper and electronic versions before going paperless Paper is automatically turned off at some point after electronic adoption Customers must pay to receive paper bills and/or statements Other 8% 11% 22% 20% Don't know 4% Base: Enterprises in North America Source: Annual State of Transactional Communications Business Survey, Keypoint Intelligence-InfoTrends, 2017 Keypoint Intelligence 21

22 Keypoint Intelligence 22 AT&T Mobile Opt-in for Paperless

23 Keypoint Intelligence 23 AMEX Paperless Enrollment

24 Keypoint Intelligence 24 Shifting Other Notices to Paperless

25 Keypoint Intelligence 25 Suppressing the Return Envelope

26 Keypoint Intelligence 26 Leveraging the Outsourcing Opportunity

27 Keypoint Intelligence 27

28 Keypoint Intelligence 28 Outsourcing Customer Communications 69% of enterprises print at least some transactional communications externally Of those enterprises that do outsource the printing of transactional communications, only 36% reported that the provider that managed their printing also managed electronic delivery Base: Enterprises in North America Source: Annual State of Transactional Communications: Business Survey, Keypoint Intelligence-InfoTrends, 2017

29 Keypoint Intelligence 29 Motivation to Outsource Printing in the Future Q: What would be the most compelling reason for you to outsource your PRINT to an external provider IN THE FUTURE? Reduce costs 46% Return focus to core business Improve efficiency Competitive advantage Improve quality of customer communications 9% 9% 8% 8% Access to better technology and processes 5% Other 2% Don't know 12% 0% 10% 20% 30% 40% 50% N = 85 enterprises in North America that print electronic communications exclusively in-house Source: Annual State of Transactional Communications: Business Survey, Keypoint Intelligence-InfoTrends, 2017

30 Keypoint Intelligence 30 Motivation to Outsource e-delivery in the Future What reasons would influence your decision to outsource your ELECTRONIC delivery to an external provider? Access to latest technology 35% Better security and compliance protocols within the provider Increase in software maintenance and support costs Desire to increase electronic workflow efficiencies Corporate shift in strategy 30% 29% 27% 25% Increase of complexity in workflow and IT Need to stay competitive 21% 22% 0% 5% 10% 15% 20% 25% 30% 35% 40% Multiple responses permitted N = 132 enterprises that outsource printing but not electronic delivery Source: Annual State of Transactional Communications Survey, Keypoint Intelligence-InfoTrends, 2017

31 Keypoint Intelligence 31 Growing Interest in Outsourcing That Include Additional Channels Have done RFI on s. Our print vendor constantly saying they can do it for us. Large US FIN Services firm We are now outsourcing , archive, SMS and maintenance. In the future we will move print over too. Large Canadian Bank In our upcoming RFP, we are considering outsourcing HTML5 documents within notifications, depending on if the service provider can do it and what the up charge would be. Large Insurance firm Source: Pricing for Digital: Exploring New Models for Transactional Communications Delivery, Keypoint Intelligence-InfoTrends, 2017

32 Keypoint Intelligence 32 Batch Delivery is Dominant, But Real-time Volumes are Rising Q: Yes, we see an increase in real-time document pull delivery Transactional Communications Q: 80%+ of these documents are produced in batch mode versus real-time 81% EOB Healthcare 72% 73% 79% 71% 76% 80% 77% 74% 71% Statement Trade Confirmation Bills Privacy Notices Lease Agreements Invoices Notifications/reminders Regulatory comm. 71% 69% 69% 68% 67% 65% 64% 59% Base: 219 enterprises in North America Source: Pricing for Digital: Exploring New Models for Transactional Communications Delivery, Keypoint Intelligence-InfoTrends, 2017

33 Keypoint Intelligence 33 Outsourced Transactional Communications in Movement 100B CAGR 2% - 4% 100B 0B Growth in Digital Transactional Communications Decline in Transactional Print 0B CAGR 4% - 6% Digital starts to shift to outsourcing Outsourced Print stays flat Total Digital Volume Digital Outsourcing Volume Total Print Volume Print Outsourcing Volume Source: The Value of Customer Communications Delivery in NA Forecast , Keypoint Intelligence InfoTrends, 2018

34 TPI Case Study Multi-Channel Marketing for Casinos 34

35 Founded in Des Moines, IA in 1973 Focused on the gaming and casino industry Over 300 individual casino properties as customers Over 200 employees Multi-channel engagement services include print, , SMS, personalized URLs with flipbooks, onsite kiosks, and mobile 35

36 Several years ago, TPI recognized an opportunity to become a multi-channel marketing partner for casinos But many challenges to realizing this opportunity: All communications must be consistent, time-synced and available via any channel based on customer preference Cannot have errors with guest s personal information Offers change frequently and must be updated quickly (same day) Input data (constantly changing formats and quality) may be comprised of many files and offer matrices for just one job Offer errors are always honored big financial penalty 36

37 Personalized communications requires handling many variable data fields Names Calendars Photos/images Amounts Valid dates Barcodes/ID codes Signatures Host letters Salutations Player levels

38 38 Offers must be consistent across all channels

39 39 Complex personalized offers means difficult challenges in manipulating the data and being completely accurate

40 TPI turned to Quadient Ignite and Inspire to dramatically decrease processing time and scale the entire process Within first 3 months, 6 days of work per person per month was reduced In first year, average jobs per month increased from 830 to 2,000+ without adding resources One same-day job reduced from 5+ hours to <5 minutes customer is sending more work 40

41 Keypoint Intelligence 41 Conclusions & Recommendations

42 Conclusions & Recommendations Take an inclusive omni-channel approach. Customer communications preferences are now more diverse than ever. Enable more communication channels to appeal to the breadth of client and end customer preferences. Don t discount the value of print and mail. Bills and statements are opened more than any other communication received by mail. Leverage that mail moment! Review your CCM platform. Consider a CCM platform that supports a broad array of communications channels, creates communications that enable superior customer experiences, as well as provides capabilities to understand how recipients engage with these messages. Keypoint Intelligence 42

43 Keypoint Intelligence 43 Thank You! Joe Zurawski Vice President Solution Strategy Matt Swain Group Director