Direct Mail Specialist Pitney Bowes Makes Digital Strides

GreggZegrasPitney Bowes, a 90-year-old company commonly thought of as a manufacturer of postage meters, is quietly sitting on an $838 million digital commerce business.

Like its competitors, Pitney Bowes’ marketing services is the sum of many acquired parts.

Its many acquisitions include: MapInfo, a mapping and location intelligence platform acquired in 2007; Portrait Software, customer interaction technology acquired in 2010; and Imagitas, a direct-mail agency with close ties to the United States Postal Service, in 2005.

Imagitas’ sweet spot is marketing to movers, about 40 million in the US each year. When someone moves, they’re typically undergoing a major life change – marriage, graduation, an empty nest. These milestones offer unique opportunities to marketers who wish to reach individuals before, after or during those key life moments, said Gregg Zegras, VP of Pitney Bowes and president of the Imagitas business.

Imagitas acts as a classic marketing services unit, advising clients like Williams-Sonoma and Lowe’s Home Improvement on ways to reach consumers before and after they move, which is when it claims a bulk of related spend occurs.

Imagitas is evaluating the downstream effects of the move and beginning to apply those insights to mobile discovery and messaging around consumer’s new digs, Zegras said.

He spoke with AdExchanger.

AdExchanger: What’s the crux of Pitney Bowes’ marketing business?

GREGG ZEGRAS: We operate that change-of-address program with the United States Postal Service. About 40 million people change their address each year through that program, so it’s a large, addressable audience of hyperspending consumers. 

When you’re moving in to a new home, you [might] need to buy a refrigerator or washing machine, and there are [businesses that] want to give you a promotional discount to [shop in their] store.

What do you qualify as hyperspending?

The average mover spends $8,700 in the weeks preceding and [following] their move. If you talk to this consumer in and around the time they’re moving, there is greater opportunity to [attract] that spend. If you’re a non-mover, you’ll typically shop between five and six places on average. But during a move you’ll shop 10-12. There’s a lot of trialing going on and there’s opportunity to win back or win new customers.

We know based on information we’ve gotten back from clients who’ve worked with Imagitas for years, they see the average lifetime value of the consumer they first met through the mover program being several times more valuable than [a customer in] their [regular] file.

Pitney Bowes is primarily known for postage meters. How are you repositioning yourselves for the digital age?

This is a big part of the transformation at Pitney Bowes as a whole, moving from physical to digital. The business I run is undergoing that same transition. We had historically been a direct-mail, direct-marketing service that is now transforming to both an offline and digital business as more consumers change their address online or through mobile devices. As [brand] clients navigate through physical and digital, it’s not an either/or. No client talks exclusively about reaching people through direct mail or digital or mobile. Everyone has their own version of omnichannel. They want to know the right way to optimize that mix for the best results.

Is Pitney Bowes developing a marketing cloud?

I would say we’re still very much known as an on-premise solution, but if you look out three to five years, we know more cloud and SaaS is in our future too. It’s part of our journey for the next few years. We’re developing new marketing capabilities, and much of it will touch on new solutions we have in the market. If you can help solve and provide relevant information and content to people when they’re traveling around with their device, that’s a huge untapped opportunity for Pitney Bowes.

What kinds of solutions are you developing for mobile?

One area of focus is local discovery. If we can help someone find their local pharmacy, bank, school or dry cleaner when they’ve moved to a certain ZIP code or community, that could be interesting. If we know enough about where you used to live and some behaviors around where you used to live, all permission-based, of course, that can get really interesting as well. Another thing is my business today is largely enterprise. I work with large national brand and advertisers, but we’re thinking about, “How do we work with SMBs more?”

Are you developing product around local discovery?

One of the historical assets of Pitney Bowes is a million and a half SMB clients, so if we can tell an SMB client there are 10,000 new customers moving into your neighborhood next month and here’s a self-service platform model that would allow you to market your offering or service, it’s a win-win.

What technology are you leveraging to accomplish that?

That’s very early days, but we can use the technology that MapInfo has … and its data assets to experiment with our own tools. We are experimenting with something called Nearby Deals to offer as a premium service and allow clients and brands to position ads there. Then, if we incorporate the SMB product, it would incorporate more of the local stuff. It would probably be a private entry point and you couldn’t find the [premium] app unless you found your way through our funnel, but then we might have this version available in the app store, including an aggregation of ads from different services and networks.

Why the shift to mobile now?

Marketing, business ops, merchandising and CRM are all kind of reporting in to the same place and we’re seeing this emergence of the customer experience officer. They have to answer, “Do we know that the person who used my app or mobile site accessed my brand again at night from the desktop?” If they saw an ad online, or if they read our catalog, or saw a direct-mail piece, how do I tie those things together?

Is Imagitas tasked with solving that marketing attribution puzzle?

We are similar to other companies where we’re making our investments in digital, and mobile. We’ll be focusing on putting our email opportunities on steroids next. There are opportunities for us to build our own database and with first-party data, look at what is the right way to introduce our clients to those core direct-mail customers on different touch points, even though we’re very protective of our asset.

How is your data leveraged right now?

Pitney Bowes from a database perspective is largely a customer database. In our customer information management business, we aggregate [proprietary and third-party] data and leverage it for data cleansing or data quality purposes. The data in my business is first-party data that’s separate, highly proprietary and confidential. We know we need to do the right thing with it and maintain the trust the consumer’s given us to be relevant to them.

How does marketing services make money?

When people change their address, it is still a very tried and true direct-mail program. We’re really marketing to the address. We know the value of the associated “mover” is high, so when we want to introduce our client’s service – a telco or retailer, for example – they know advertising to that audience holds strong potential.

Outside of our relationship with postal, there are other things we are doing as a business to expand or extend the relationship with some of those consumers who would opt in after [filling out a change of address form]. This is obviously a much smaller subset of the primary audience, but we’re thinking about how we can add more value after they already move.

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