Cooperative Databases

How the co-ops can improve your revenue per catalog mailed

By Stephen R. Lett

Are you a stock picker or a mutual fund investor? If you can select specific stocks that always yield a good return, you're among the few. Most of us feel safer buying mutual funds to minimize risk while still yielding a good return.

You're probably wondering what this has to do with using cooperative databases. Well, buying mutual funds is a lot like prospecting using co-op databases. While it's always a good idea to continue to prospect via rented or exchanged lists, it sometimes can be safer to mail to prospect names selected from a co-op.

This month, I'll cover how to best use the co-ops, and why it's also important to prospect to specific lists.

Should You Use a Co-op?

For most small- and medium-sized catalog companies today, about 50 percent of prospecting is to names selected from a co-op database. Prospect names selected from one of the five co-ops I've compared this month are a good value for the money. First, the names are selected from a model, which means they're best targeted to match your own customer database.

Secondly, these names rent for only $60/M to $70/M, which is less than the per-thousand rate for most outside lists (excluding exchanges). Note, however, there are some limitations to relying too heavily on co-ops, which I'll discuss later.

Should you prospect using more than one of the co-ops? Absolutely, as long as they perform for your particular offer. Each one of the co-ops designs its database and builds its models using slightly different methodology. While there's a significant overlap of names from one co-op to another, the modeling techniques they use will yield different names. That is, one co-op will identify good prospect names the other co-ops may not.