Episode 67: Driving Print Efficiencies and Increasing the Value of Digital featuring Christoph Stehmann, President of Broadridge Customer Communications

Matt: I'm Matt Swain, and you are listening to the "Reimagining Communications" podcast where we discuss the opportunities and challenges facing companies on the road to optimizing their communications for the future. Today I'm excited to be joined by Christoph Stehmann, President of Broadridge Customer Communications. Christoph, thanks for joining today.

Christoph: Hi Matt, how are you?

Matt: Doing well, thank you. So, Christoph, you know the customer communications market well. You have led multiple businesses in the market and in doing so you have a strong combination of operational, strategic, and entrepreneurial perspective when it comes to this theme of reimagining communications. As a starting point, can you share a bit more context about your background?

Christoph: Sure. So, I've been with Broadridge now for a little bit over a year after spending more than 20 years with Pitney Bowes, first of all in Europe and then the last 10 years or so in North America running several lines of business. The last one was running the international business. And before Pitney Bowes, I used to work in transportation for a company that is now owned by DHL, and I started my career at McKinsey.

Matt: And Christoph, I think you left out that you were also a florist.

Christoph: That is half-true. I was not a florist. I used to have a flower business at some point.

Christoph: Yeah, that was the idea back in the middle of the '90s. I had actually just come back from a stint in the U.S. and something like 1-800-Flowers didn't really exist in Germany, and together with a friend of mine went to try that out. And it was a fascinating experience.

Matt: But now you're here.

Christoph: It was a straight transition from florist to Broadridge.

Matt: Very good.

Matt: Christoph, I don't know that everyone understands the scope of the customer communications business at Broadridge. Can you expand a bit on the size, scale, and the role we play?

Christoph: In general, I think we are one of the biggest communications providers in the U.S. actually. Broadridge Customer Communications has revenues of, let's say roughly $700 million. Most of our customer base is in financial services, bank broker dealers, retail banking and others, credit cards. And then we do play in other spaces that are a little bit separate from the Broadridge core business there. But healthcare, utilities, telecom, insurance are major customer segments that we serve.

Matt: Excellent. So, you've had an opportunity to work with clients across a variety of markets. You mentioned some of those just now. Independent of market segment, what are some of the key themes coming out of those discussions?

Christoph: In communications in particular. Well, the first thing that may be obvious is everybody is talking about cost savings. If you look around the world, the peak mail in a way was around 2008 when the great financial crisis started. And since then, mail volumes have declined all over the world, and they have in the U.S. And the key driver behind that is cost savings. Digital is a cheaper alternative, and people are trying to extend more communications digitally. That cost savings theme has many aspects. It's reducing the number of communications, reducing the content and so on. And of course, going digital.

The second theme that I hear more and more about is how do we actually increase the value of that communication. And we have some of our clients here who are at let's say 80% digital adoption. You go out there and want to sell them with more cost savings, you're running out of steam at some point when everything is digital and there is no more postage to be saved. Period. And then all of a sudden, the question becomes, well, how can we make these things more effective? And it depends on what target you want to achieve and that's obviously different by industry and by type of document that you send out. But that question of how we reach our targets more effectively is becoming more and more important.

Matt: I think your comment about increasing the value of digital is a really important one. We have some at that 80% level but then we have others that are at 20%, 30% paperless or digital. And for them, often they fall back on, "Well, our demographic is different." They lean into why they can't achieve those better paperless rates. But we also look at trying to make those communications more engaging and more valuable. Is this communication any better because it's digitally delivered or is it just a PDF of what I would have received in the mail anyway?

Christoph: Yeah, there's a couple of themes in there. The first one is... So, let's say you have a client, and we've met some that have 10% to 20% digital adoption and the argument our audience is relatively older, more mature, less digitally savvy, and therefore that's what it is. And I have a problem with that argument. I think if we dig deeper, we will probably find that most of these people are actually perfectly happy to talk to their grandchildren over WhatsApp or FaceTime. Most of these people will be perfectly happy to order food on the internet to be delivered by Uber Eats or something. They can make reservations on OpenTable, and they can order goods on Amazon. But somehow, they haven't latched on to receiving certain pieces of documentation digitally. And that's a really interesting question, and it's not a trivial question also, but how do you get these people engaged in digital communications? And some of these things that you're sending might be very interesting to them. Some of them might not be. Quite honestly, there are some pieces of communication that we send out that are for your information only. An explanation of benefits actually starts with, "This is not a bill. Do not do anything with this."

Matt: I think there are also different levels of value that the different stakeholders put on each of those communications. There's a regulatory requirement to send it or there’s recipient value. But thinking about what's going to make that recipient more likely to engage when you want them to engage is part of the magic of creating a better experience.

Christoph: It is part of the magic here. And I think this notion of segmenting these communications in different ways it's probably going to become more popular. Quite honestly, it is not right now. But if I just look at my personal experience there, our dental insurance sends me EOBs and the only thing I will find there is that all of the four members of our family go to the dentist for dental cleaning twice a year. Quite honestly, if that happens the 10th year in a row, that is not the most exciting piece of information that I'm looking forward to. It isn't.

However, if there's a major piece of surgery coming up, my kids need braces or their wisdom teeth torn out or whatever, it gets more interesting. So…all of these pieces of communication in different cases really, should they really be communicated the same way? I don't know if that is the case, and I don't know that we're maximizing the value there. We electronically send PDF copies of a paper document. That would be the same in a way as if the New York Times decided that the best way to go digital is to put somebody in a studio and have them read the paper version of the New York Times by candlelight or something. That is not a digital experience. There's all of that interactivity. I mean, pictures, video, interactive communications that are inherent characteristics of digital communications that you lose if you do that. And if that is not fully engaging, then, yeah, that's no surprise.

Matt: It actually brings up an interesting point. Your first theme was cost cutting and cost reduction. And often when clients talk about digital transformation or driving digital, there's a cost cutting undertone. And therefore, I think that's why clients aren't fully taking advantage of the value of digital because they're leading with the removal of postage costs and print costs.

Christoph: And to be clear, that's a perfectly legitimate motive to do these things. Absolutely is. However, at the end of the day, at some point you have saved all of the cost there. And then you're competing not only in costs, but you’re also competing on the experience that you offer to your clients. Take insurance companies. I mean, quite honestly, most people engage with their insurance when they need a policy and then they pay their bills and basically want to get it over with and the money is gone. And then the next time they engage with them is when they actually have a claim. How do you make that claim handling process so much more efficient?

We had this one example where we helped them cut down the turnaround time from four weeks to a matter of days through digital online forms communication. And that's a massive improvement in customer experience. And different people are different. So, people choose their insurance companies for different reasons. But knowing that when I have a claim and I am in trouble and I need to have something solved that I'm not an expert in, by the way, to have somebody by my side who actually helps me quickly and to know that upfront that I'm in contact with a company that can do that, I think that's very assuring.

Christoph: With many of these communications, sometimes you have the impression they are designed to be cheap and to minimize costs to the call center because calls to the call center are cost again. And again, perfectly legitimate. There are cases where that is really the one thing that you should aim for. But equally, you could look at that and say, "Well, how do we make it more engaging? Is there something else we want from the customer? Do we want a call center or something?" And even if they engage, let's say claims handling or something, how do they engage actually really matters. If they engage digitally, they give you the right information in the right fields with the right validation, that's much better than calling the call center and having somebody on the phone for half an hour. So, I think that the whole notion of cost saving is important but then, yes, you need to look at the value of the communications and define that by document type. What do you really want to achieve and segment it? Are a one size fits all approaches really appropriate or not? That is a question where I think we all in this industry still have a lot of work to do.

Matt: The other piece of what you had said in the setup was not all communications should be created equal or treated equal. That's actually a really interesting angle with your dental insurance piece, because I think often an EOB is an EOB, right? And being able to differentiate points where maybe you add a personalized video that has a custom message on what you're about to embark on or why this cost is higher because of this unique treatment, just experimenting with other media types and other ways to communicate in those moments, would be an interesting follow up.

Christoph: Yes, it is. And that will involve experimentation. I can remember a case. It was about 10 years ago where we experimented with real time personalized videos to communicate telecom bills in Australia. And the interesting result was actually people paid their bills faster, which is what you want when you send out bills. So, that was an interesting example, really. But at that time, it was really prohibitively expensive to produce these videos in a custom personalized way. But that's an interesting example of when you experiment with some of these things, you actually learn something.

Christoph: The question for that particular client was much more, "How do I get my bills paid faster and how do I save an extra cent on the communication?"

Matt: And understanding the use case of what the end goal for the client is obviously plays into the strategy that you implement. Reducing day sales outstanding in a bill pay example is often one of those primary use cases, also reducing call center volume, happier clients, all those things.

Christoph: Yeah, absolutely. The other interesting aspect of what you mentioned there is there's a counterbalancing tendency here to the things that we're just discussing, which is around standardization. So, one of the things that are difficult in our industry right now is there's a lot of custom programming here. Not only with Broadridge. I think that's with everybody. There's a lot of custom programming.

And producing all of these custom pieces of communication with custom code on every version of a composition system that has ever existed is expensive. So, one of the easy answers is therefore we need to standardize everything. And the question is, does that mean that everything will look the same? And that is obviously not where we're going. After all, every piece of communication that you send out has something to do with brand identity and so on. And therefore, they won't look the same.

But the interesting discussion is, how can you standardize things under the hood, so to say, so that you can actually produce these documents much more efficiently but still allow for an appropriate level of variation, diversity, complexity in the look of the document, but in a way, that's easy to produce. We're at the beginning of this journey where I say, "Well, what are the right elements where you want to make variations and diversity really, really easy? And where do we say, "No, these things are hardcoded, and they will always be the same"?

Christoph: Do you really need all of these variations in where the address is positioned on a document so you can look at it through the varying windows that you have there, or could that be just really at the same place everywhere?

Matt: Which then leads to increased efficiency in production, output, and savings again for the client.

Christoph: Yeah, absolutely.

Matt: I think of certain document types that are less differentiating. I'm not going to say non differentiating, letters or confirmations or checks even, those feel like they're ripe for standardization.

Christoph: At the end of the day, nobody is interested in a check. They're only interested in the money. So, that's a good one. Change of address confirmations.

Christoph: How many documents does this earth need for that? I don't know. I'm certain there are marketing aspects of this where people would argue yes, that is needed. But how radical that needs to be, that's a different question. And then again, I think you can compose these with different intentions for different people.

There's a similar argument on the wealth side, in the wealth statements. That's a statement for somebody who has three index funds and keeps them there forever. Does that statement have to look the same as somebody who has highly managed more than a thousand positions? It's a totally different purpose. And so why would that document be the same?

Matt: Now on the flip side, going across industries, I could argue that regardless of how much my utility bill is, I don't think my utility bill needs to look any different from a utility across the country. Why not use the same template, the same approach across those clients?

Christoph: It could. And probably if we did an analysis of all of the utility bills across the U.S., we would find that there's a lot of elements that are common and some elements that are different, where different utility companies have different priorities. And there needs to be appropriate flexibility actually to accommodate those, which again leads to an interesting discussion of, is there a common core of these things that you can standardize and then allow flexibility on the fringes or not?

Matt: I'm going to transition a bit here and get your thoughts on generative AI. And I'm curious about your perspective on the role that it plays in the customer communication space today and in what role it could play in the future.

Christoph: That's a big question. And I know that there are people out there who would suggest that AI is the solution to everything, and I'm not necessarily in that camp. I have to say that upfront. Having said that, I think there are multiple questions where AI of whatever shape can actually play a big role. We talked about segmenting communications for different people, meaning clustering customers, consumers of various sorts into different segments to tailor communications could be a classic case for AI.

Generating the content might be and might not be. That's where I'm hesitating a little bit. There are some cases where precision is actually important. That sort of precision in the documents and in the core facts need to be absolutely safeguarded. And whether that means we'll produce them through AI or something else, I'm open to that, but that would sort of be my caveat there.

And then there's other things. We talked about videos before. That could be another really interesting case. Can you produce meaningful explanatory videos on a personalized basis with my data and my name and everything there? I think that's a lot easier today than it was 10 years ago. So, I could come up with multiple cases where I think it might be really, really useful, and promising and other cases where I'm a little bit more skeptical.

Matt: So, on that theme, and you may have covered this already in some of our discussions, but how do you expect the customer communications industry will continue to evolve in the coming years?

Christoph: That's a good old saying here that we always overestimate the amount of change in the next two years and underestimate the change in the next 10 years. Let's talk about the next 10 years. If I look at trends worldwide, actually, it's not hard to predict that there will be a whole lot more digital communication than paper based. I mean, there are countries in the world where mail is gone literally. So, I think we will see a whole lot less mail. We will see a lot more people signing up for digital communications.

I think we will see this interesting tension between standardization, segmentation, and specialization. And we will learn how to use the inherent qualities and advantages that digital communications have over paper. We'll learn how to use them much, much more. Things will get more standardized in the sense of there will be standard definitions for certain data sets, how people communicate between computers. It will therefore be easier to compose documents out of certain standard data sets. That will enable us to, on the one hand, produce standardized sets of communications really cheaply where that is the requirement. And that will also enable us then to identify those segments that need a special touch and do something about that.

And with that, I think the communications landscape as such will be much, much richer than what we have seen so far. Here, there will be more variation, not less variation, but it will be produced in a much more efficient way. With that, another interesting distinction there would be business-to-business versus business-to-consumer. I would argue a lot of business-to-business will be totally electronic. You see this with electronic invoicing in Europe, where more and more governments are actually mandating that business-to-business invoices go electronic for all sorts of other reasons. But there's no paper involved. In some cases, there's not even a PDF image involved. It's just a structured data set that gets transferred from one company to another directly into the ERP system and will be processed. And I think we're going to see a lot of that happening there.

I think companies will also look at not only their outbound communications but their inbound communications and see how much of that can be digitized directly. Incoming invoices are an obvious one. Digitize and have it sent through some portal, whatever, directly into the ERP system. Incoming checks. I mean, at some point that needs to go digital there. It will go directly through ACH and not on checks.

Let's say queries from clients, from consumers or complaints or something. The standard way would be to have a form on the internet where people enter these things rather than send a letter that then needs to be decoded and so on. And I think there's a connection there between outbound and inbound. A lot of the things that people receive are forms that they have sent out before. So, I think there will be a drive to automate these things much more and digitize them much, much more. So, those are a couple of random thoughts here.

Matt: Excellent. Well, Christoph, thank you for joining today.

Christoph: Thanks for having me. Thanks, Matt.

Matt: I'm Matt Swain. You've been listening to the "Reimagining Communications" podcast. If you like this episode and think someone else would do, please share it, leave a review, and don't forget to subscribe. And if you're ready to reimagine your communications experiences, consider the Broadridge Communications Cloud, an end-to-end platform for creating, delivering, and managing omnichannel communications and customer engagement. To learn more about Broadridge, our insights and our innovations, visit broadridge.com or find us on LinkedIn.