Lists: Ten Things to Consider About Consumer Prospect Databases
Certainly all mailers want to improve their new customer acquisition performance. And in a session during the DM Days New York conference last week, Caryn Gray, Experian’s senior business & strategy consultant, outlined 10 key factors for mailers to consider when working with consumer prospect databases:
Specifically, a prospect database is a client-specific database comprising multi-sourced, agreed-use, non-proprietary consumer records, such as vertical response lists, that marketers use for planning, executing and tracking or measuring new customer acquisition efforts.
In setting the stage for her presentation, Gray noted that the key drivers for improved prospect databases include list fatigue, a lack of new names on the market, shortened lead times and timely campaign management, among others.
1. List sources: Consider how you manage your content, Gray said, be it with or without detail; updates; list types; list tests; number of sources, including continuations and deeper selects; and normalizing data to optimize coverage, including multi-sourced data elements and single-sourced elements.
2. Opt-in, opt-out and do-not-solicit (DNS): Consider the Direct Marketing Association’s DNS service and other industry regulations, she said. Also, consider list-specific opt-outs, such as suppress royalty, not name; audit/validate actions; and reporting and monitoring.
3. Decoys: Ask yourself: Does the list owner continue to monitor its license for unlimited use and triggers? Also consider third-party service providers who serve as middlemen to monitor your use of decoys.
4. House file match: Gray pointed out that list rentals now match to the whole house file instead of simply “house file selects.” She also pointed to the need to define “inactives” when determining whether to interact with inactive customers. Other factors to consider in house file matching include interaction with deEper select names on rentals and such data management variance considerations as who performs National Change of Address and other address updates.
5. Eliminating duplicates: “Unlike list processing services,” she said, “we don’t eliminate duplicates in a database.” Because of that, she noted, it’s important to combine and aggregate instances of the same individuals or households in these databases.
6. Hosting data: Question whether or not to send your data to a competitor to host. Determine whether you should seek to avoid such redundant processes and costs as hardware, staff, data management, and software licenses and access. Above all else, take into consideration if you have the need to outsource your customer database as well.
7. Contracts/agreements: In factoring these into the equation, consider that usage terms can force change on the list renter-owner relationship, Gray noted. In determining a list rental price, consider fair market value and payment structure, as well as industry-recognized broker commissions.
8. Net name agreements: Take into consideration varying levels of list rental agreements and tracking requirements, such as gross, net, net-net, exchanges and additional costs for added data. Also, consider the impact on list rental revenue when marketers are out of your market.
Some marketers have ceased doing list exchanges. “They’re saying it’s too hard to figure out in the prospect database environment,” she said. “They’re kind of playing hardball in some regards.”
What’s more, in some businesses (eg: the catalog business) with a lot of multi-titled and multibranded companies, the lists are part of corporate-wide systems and not single business units.”It’s maybe five business units coming together,” she pointed out. “One brand may use 100 lists, another may use 40. And maybe 10 of those lists overlap. So to get cross-brand circulation and what’s required to be profitable and healthy, it’s a pretty daunting thing. You’re taking it outside of just brand negotiation and starting to do it with multi brands across the corporation.”
So this is potentially pushing list brokers to change some of the ways they’re working with clients when these databases become ways to support acquisition work, she added.
9. Approvals: Consider mailing who, what and when, when renting out a prospect database. This is important, because the list renter could otherwise be mailing your hot list before you get a chance to. “The question is, once you move into a prospect database as a contributor, do you reserve the right to approve when they can mail your names? Open up other areas of discussion,” she advised.
10. Analysis and performance: “When we talk about prospecting,” Gray said, “we’re taking a prospect-centric view about targeting circulation planning. If my core is staying stable, how do I evolve it going forward? It’s not an easy bridge from prospect modeling.”
What’s more, pay close attention to DNS rates. Make sure there isn’t a grassroots campaign to stop direct marketing. “If this is the way the industry can go,” she said, “then we’re talking about each of the independent marketers doing their own prospect databases. So we don’t want to go down that slippery slope without anyone auditing what we’ve been doing.”
In summary, Gray noted that the issue of prospect databases has never been a question of technology. “The technology has always been there,” she said. “It’s a question of whether we can evolve to change and leverage that technoloGy in a way so that everybody comes out winning in an O.K. space. No one company will decide exactly how things should go.”