B-to-b co-op databases present unique challenges
For most list owners who have participated in co-operative databases, the results have been mixed. Of course, the reason to ship names into these databases is to generate additional revenue streams outside of what a list owner might expect from renting their names in the traditional list rental environment. For some list owners, this revenue stream has been significant. For others, and especially for the list managers representing those list owners, the results have been less than expected. There are a few tips to help minimize any downside and maximize the upside.
Knowing how to evaluate database offers is the key to minimizing costs and maximizing rental dollars.
The first tip: do not approve for database usage any offer that you are currently booking directly. Unless the mailer of that offer prospects solely out of the database, you risk losing significant revenue if you allow usage by approving a current continuation mailer for database usage.
A second tip: using the same logic as above, you might want to look closer at the approval sheet and segment out those mailers/offers you feel should be testing the file you represent directly. It has been my experience that it is easier to secure a test in the “traditional” list rental environment than it is to get a test in the database environment. For this to work, you need to be able to determine for each mailer whether they prospect solely out of the database or if they also do a merge for each mailing. If the mailer prospects solely out of the database, the same rule applies as above — if you feel the offer is on target, approve the offer.
The third tip is in response to one of the inherent profitability issues in processing database usage orders. It has been a challenge for list managers to make participation profitable, as there are many small orders on each monthly usage report. These are a result of “cross-base” usage. A mailer is not selecting your list; instead, a mailer is taking a cross-section of the co-op. The best way to minimize these orders is to turn down any offers for mailers that would never use your files. Will a mailer selling janitorial supplies select subscribers to CEO magazine?
In conclusion, for outside list managers and list owners, b-to-b co-op databases present unique challenges. Using the simple suggestions mentioned above may help increase your overall profitability. You should see that your monthly usage reports are smaller, but the average order size goes up accordingly. This should be the goal of every list manager who represents a list owner participating in databases.
Tom Mack is vice president of list management at Infocore. Reach him at email@example.com.