In the new year, customer communications will continue to be critical for improving customer experiences. As we shift customer communications to a strategic function in the enterprise, it's important to know the true costs involved in communicating with your customers to clearly understand the return on investment (ROI) for the organization.
Too often, we overlook important costs from key steps in the process. When considering the true cost of customer communications, the best way to proceed is to follow the trail of customer communications backwards—from delivery to design. This will give you the baseline of communications produced, which can then help to appreciate the scope of hard costs.
1. DeliveryFirst, look at the operational delivery costs for communications. Start with the most common enemy: truckloads of printed material. There are several types of physical distribution options to consider, including proposals, contracts, statements, correspondence, applications, onboarding kits, contract proposals, and other ad hoc communications. These costs are easy to find, because they should show up as a line-item expense for postage and courier services (e.g., FedEx, UPS, TNT Express, etc.). However, some of the largest expenses avoid rolling up to a single line item, since they appear tens of thousands of times for only $20.00 across many business units.
2. ArchiveThe physical delivery costs are easy to trace, but they won’t show the total cost involved. The archive system will turn up many communications that have escaped accounting. You will find that these simple questions will be difficult to answer: What did we archive last month? Where are the communications for a specific customer? Can you show me the archive for every communication channel? It's likely there are multiple archive systems with multiple owners. The maintenance, management, storage, and labor for each of these systems represent an important component of your overall costs.
Some systems archive email, SMS, social, and other digital communications, while others archive print communications. As you link your customer experience strategy to communications, all of these independent archive systems will need to be cross-referenced when your employees are trying to instantly assess the available content for a particular customer. Archive consolidation will decrease your spend with the number of redundant systems you eliminate.
3. ProductionBefore a communication is archived, it has to be produced. Some of this production takes place through traditional customer communication management (CCM) systems. Often, ad hoc communications are produced in separate interactive systems. Still others will use project-specific software as a service (SaaS) solutions or SaaS add-on services, and some of these may be home-grown systems. Finally, some production may still be outsourced to social channels via an API, often using custom code.
The cost, maintenance, labor, usage, storage, and other fees from these systems need to be tallied up. It's not uncommon for enterprises to have five or more parallel production systems. This can amount to hundreds of thousands in annual software maintenance dollars, millions more in redundant labor, and millions on top of that to respond to uncoordinated customer experiences resulting from this patchwork of systems.
4. DesignAs you move up from production, you enter the design arena. Many production tools have their own design environments. Many have desktop, web, and cloud components to their design front-ends. Most systems can take content from the content management system and define data from core systems. The design utilities are generally equal to the number of production systems, plus a few common graphic design packages, scripting frameworks, and general office software packages. Having a lot of tools translates into redundant designs that increase approval, compliance, and deployment costs.
5. Data and ContentFrom design, you have data and content. These systems are generally feeding the communication solutions. However, some production and archive systems will require specific enterprise content management (ECM) or web content management (WCM) systems to access built-in integrations, which can increase the cost of customer communications. As you consider consolidation, look for opportunities to remove redundant systems, which are maintained by very smart (and often expensive) information technology (IT) experts who ensure every piece of content is managed compliantly. Most executives fail to ask why enough in this area, and costs accumulate unnecessarily because the system selection is not in tune with a clearly articulated strategy.
6. Business UnitsThe business knows a lot about the cost and benefits of communications in relation to their department with an amazing degree of detail. However, they often don't understand the potential upstream or downstream impact of their projects. Business units often purchase “point solutions” that do a great job for a narrowly defined problem. However, these point solutions can cause downstream problems in archive, delivery, and customer experience modeling. These costs can be low in terms of licensing per month at the start of a project, but the integration and compliance costs may be much higher for another team.
As we track the disparate costs for customer communications through each phase of the process, we can see that the true total cost is spread across many areas of the enterprise, with various pieces of the process applied to a variety of budgets. When that reality is taken into consideration, collaborating throughout all points of the project and consolidating systems to support a well-defined communication strategy starts to make a whole lot of sense.
Scott Draeger is Vice President of Customer Transformation at Quadient. He joined the digital document industry in 1997, after graduating from UNLV. He started as a document designer using a collection of hardware and software technologies, before moving to the software side of the industry. His broad experience includes helping clients improve customer communications in over 20 countries. For more information, visit www.quadient.com or follow him on Twitter @scottdraeger.