The Cost of Customer Communication Management

The cost of managing an enterprise CCM program can be difficult to universally estimate, as it varies from business to business and their respective needs. However, in this article, we will dissect its intricacies and hopefully leave you with a better understanding of these costs. We’ll identify where in the CCM production workflow costs usually occur, and offer common strategies for managing them or, in some cases, reducing them.

Delivery Costs

Legacy Print & Mail

The most expensive form of delivery and the biggest contributor to CCM costs is print & mail communications. USPS postage alone comprises roughly 70% of the cost for print & mail delivery; the additional material costs for paper and envelopes, the paper printing costs, and the return mail processing costs can create a very heavy price tag.

These costs have the added challenge of being unpredictable: as commodities, paper and postage costs are susceptible to wild, unforeseeable price swings. We expect these fluctuations to continue with post-COVID staffing challenges, volatile fuel costs, and constraints the U.S. Congress has placed on the USPS regarding pension accounting. These variables make the task of accurately budgeting for a full year of CCM costs all the more challenging.

Electronic Channels

On the other hand, electronic delivery channels have drastically lowered the aforementioned print & mail costs. But that’s not to say electronic channels are not without their own set of financial obstacles. What electronic channels giveth in some ways, they taketh away in others.

Leaving the analog world of mail for the cyberworld of email and SMS text requires all the data and network security associated with electronic interactions to be iron-clad, particularly those containing PII and PHI data. Given the potential harm from data breaches and identity theft, the expense, whether spent externally on a third-party provider or internally, is not one to skimp on.

Preference management also contributes greatly to electronic channel costs. While personalization efforts and omnichannel capabilities have been a positive development within the CCM industry, they also necessitate that companies manage those preferences. In many large companies, there are complex, and by nature expensive, webs of several online locations, sometimes mixed with in-person point-of-sale and self-service channel preferences.

Given the ease with which consumers can now electronically request their delivery preferences, there has been a coinciding demand for multi-channel communication delivery. This is seen most often with documents containing critical financial data, such as monthly mortgage statements and quarterly brokerage statements, so that customers have the added security of both physical and electronic copies.

• Costs specific to email: Though email addresses have been mainstream for several decades, they still have shortcomings that USPS mail addresses do not, if they are even available. There is no reliable way to check the accuracy of an email address—or auto-correct an inaccuracy—as there is with USPS addresses. Consumers can, however, easily and quickly change their email address, something which they cannot do with their USPS street address, short of moving. Managing email addresses, re-sending content when they fail, and implementing a replacement contribute significantly to the cost of working with email.
• Costs specific to SMS text: Because this channel’s delivery pathway goes through telecom infrastructure, there are additional costs here not seen through email channel deliveries. Fees telecoms may charge for delivering the text, both for the sender and the recipient, and the telecoms themselves are overseen by FTC regulations where strict opt-in requirements are in place.
• Costs specific to online viewing: While it is harder to identify costs associated with online viewing, management services are integral to the infrastructure of online communications. User authentication, document composition and indexes, a user-friendly search engine, and functionalities that allow the user to email, print, or securely download their documents are all added costs that are hard to see at the outset but add up in the long run.

Pre-Production Costs

90% of CCM production work is often said to be completed in the pre-production stage—before a single communication is even printed or emailed. Aggregating and standardizing input data from distinct sources, adhering to government regulations, composing variable content for multiple channels, growing consumer empowerment . . . These factors all require high-end technical workers with high-end salaries.

• Data: A document often contains several different types of data—personal information, account numbers and balances, products and service purchased, payment amounts and due dates, etc.—from more than one internal information system. In particular, large companies with a long history of acquisitions and different information systems find this stage to be the most logistically daunting. There are significant challenges related to aggregating and standardizing large quantities of varying data into the common formats required to create a transactional document. Dealing with them requires high-level technical workers—with the accompanying high-level salaries, of course.
• Preference management: When a customer can change a banking or insurance relationship with little more than a click, the consumer has unprecedented transactional power. Part of that power is in dictating their communication preferences; it’s led to the proliferation of preference management systems, wherein a company may find itself with a network of systems that can require a significant amount of technical time to sort and coordinate.
• Complying with regulatory directives: It’s no secret that many CCM programs are heavily regulated by government agencies, both federal and state. In response to the financial crisis of 2008, the federal government created the Consumer Finance Production Bureau (CFPB), which continues to hold enormous influence over CCM communication practices. Understanding its directives, and those of other government agencies, and applying them to CCM programs requires business analysts, programmers, and legal workers with expensive, high-level expertise.
• Change management: Government directives are not only plentiful but also subject to frequent change. It creates a real challenge to stay informed of the new rules, interpret them, and remain flexible to maintain compliance. This has an exceptional financial burden on CCM program management, whose financial impact is often not fully understood.

People Costs

Cost assessments for CCM enterprise programs usually center on the logistics of print production: operations management and internal print shops, for example. But several other fields contribute greatly to labor cost, especially those concerning business analytics, data processing, page composition, project management, and legal. These areas are staffed by intelligence workers with special expertise that command large salaries, incur high recruiting costs, and come with the expectation of continuing education, annual bonuses, and advancement opportunities.

Faced with this reality, companies need strategies to provide excellent work experiences that retain them as employees and to potentially reduce the number of these workers as much as possible.

Now that we’ve identified the primary sources of cost in CCM enterprise programs, we’ll delve into the strategies to manage them, through either reducing cost or mitigating increases.

Reassess Delivery Methods

Because communication delivery weighs down most of a CCM enterprise program’s cost, several good strategies are available for either reducing cost or minimizing increases.

Evaluate your digital print & mail execution:

• Streamline static content printed dynamically along with the variable
• Use window envelopes to bypass the need for pre-printed envelope stock
• “Fill the envelope” to take advantage of the 3.5 ounces allowance for “1 ounce” First-Class Mail
• Include marketing and relational communication within transactional mail pieces to offset their costs
• Maintain current-state digital inserters to save on manual labor and pre-printed insert costs

Transform your CCM strategy from print & mail to electronic delivery methods:

• Take greater advantage of embedded links within emails and SMS text
• Examine the marketing campaigns, preference management, and user interface components that may be holding back e-migration
• Make sure your multichannel delivery reduces costs associated with silos and takes advantage of current omni-channel approaches

Automate Pre-Production and Self-Service Internal Management

Given the complexities of input data processing and multichannel page composition, the biggest driver of cost reduction lies in automating these tasks. The cost of human intervention is very expensive and jeopardizes the deadlines crucial to a successful CCM service. Using a top-tier platform, the right planning, and upfront programming, the most diligent CCM pre-production tasks and backend reporting can remove almost all human intervention.

But not all tasks can be automated. As discussed earlier, government regulations and policies change frequently, requiring a never-ending need for document change management and human intervention.

For those moments of human intervention, there is a way to make the work faster, easier, and more accurate. Strategies that effectively handle the people component of CCM result in positive cost management. A top-tier CCM platform will improve efficiency and cost management with:

• A full self-service approach: Workers can manage changes themselves online, anytime, anywhere. It may seem counterintuitive calling “self-service” a time-saver, but when compared to relying on a service provider to do the changes, it saves more time than you might expect.
• A non-technical approach to programming: A more “plain language” translation, rather than technical programming code, leads to greater comprehension and better user experiences.
• An archive of versions and changes: A worker can spend considerable time tracking down and verifying past versions without a top-tier platform to track and archive those template changes for them.

CCM production has plenty of complexity and cost. At times, it can seem overwhelming and intractable. But it doesn’t have to be. If you currently are not aligned with a provider like Neps, ask us how we can apply these strategies to your business.