Oct. 4 2009 12:00 AM

With advancements in digital print technologies and an increasing number of success cases for color in transactional and TransPromo documents, one could argue that the case has been made for digital color. At a time when budgets are tight and organizations are aggressively implementing print suppression strategies, however, seven-figure investments in digital color capabilities present an interesting proposition.

We're all familiar with industry statistics reporting that the end consumer reads 90% of transactional communications and that the use of color can increase customer responsiveness by up to 45%. At first glance, these stats make a good case for the use of color to increase customer responsiveness, but I think further examination of this response is warranted. Specifically, organizations must carefully assess where the use of color truly contributes to their corporate goals.

At the highest level, the use of color in hard copy transactional and TransPromo customer communications must coincide with corporate goals around customer satisfaction, retention and growth within existing accounts. Organizations shouldn't lose sight of these strategic goals when assessing the ROI of color in their communications. In cases where color increases comprehension of the information presented within a document and strengthens the end consumer's perception of quality and customer service, the investment in color pays off and contributes to the ROI. For example, brokerage and retail credit card statements with complex charts and graphics are strong candidates for digital color production because color improves the overall customer experience with the document.

But what about the use of color in documents that customers regard as low value? What if the "strong response" created by color is negative? For example, upon recently receiving the new digital color, TransPromo invoice from one of my utilities - one that is known for poor customer service - in which the new design included TransPromo upsell messaging, my immediate reaction was to log into my online account with the utility and turn off paper statements. It's unlikely that this was the result the utility had in mind when investing in color, TransPromo capabilities. With cases like this in mind, it's critical for organizations to identify where color might have a negative impact or deliver low ROI before making significant investments.

Once you've identified where the production of hard copy customer communications in color will truly have a positive impact on corporate goals and ROI, the next step is to determine whether or not it makes sense to produce them in-house. Traditionally, Madison Advisors has found that the decision to outsource is largely determined by corporate culture. With digital color in the years to come, however, we expect cost and ROI to be among the most highly weighed decision criteria. Given the resource requirements necessary to successfully support digital color production - from hardware and software costs to the new FTEs required to design and produce effective color communications - we advise organizations to scrutinize the business cases for both in-house and outsourced digital color production to ensure you make the right decision for your organization.

When utilized for the right applications and done well, digital color has its benefits. Achieving these benefits, however, is often an expensive and complex process. With this in mind, due diligence is the name of the game for digital color. The right strategy will pay off, whereas one wrong decision could be very costly and difficult to recover from.

KELLEY WEST [kelleywest@madison-advisors.com] is a vice president with Madison Advisors, an advisory fi rm that provides thought leadership, strategic consulting and market research in the print and electronic communications space.