Black Box versus list specific?

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I've been reading Don Libey's articles with great interest, and I'm happy that he's such a proponent of list-specific databases. However, even though I'm responsible for Direct Media's DataWarehouse, a business-to-business list-specific coop database, I have to scratch my head and wonder why Mr. Libey feels so strongly that it is an "either or" proposition. To be fair, he does allow in his Aug. 16, 2006 article that he could potentially be swayed. But in his many comments since, this does not seem to have happened.

The Direct Media DataWarehouse is a list-specific base that is built to support BTB prospecting campaigns. It enables mailers to deploy their mailings using list owner supplied data enhancements from D&B and Experian, as well as aggregated data like multi-buyer, recency and company activity. Marketers know about all lists available to them and can choose, include or omit any list for their campaigns. They also have the option to include their house files in the base for selection and suppression purposes. But it is not a requirement and does not obligate them to make their lists available to other marketers using the base.

Black Boxes generally offer modeled segments that are based on RFM (recency, frequency and monetary value) but provide no list source information to the marketer. Abacus and Experian (b2b Base) offer this type of solution to marketers and require them to "participate in" or include their customer list and trailing transactional data in the base. They also require that this data be made available to other participants.

From what we've seen, at least with regard to BTB, these prospecting environments complement each other - and that led to the head scratching.

We work very closely with our clients to help them acquire new customers and grow their businesses. We have to find ways to work with their marketing challenges, including shrinking universes, the lack of new files coming to the market and decreasing response rates. BTB mailing strategies have had to evolve, and we need to embrace the technology and the methods that are driving this evolution.

Fundamentally, we need to help our clients address three basic issues: How does a marketer identify the most appropriate contacts to prospect to? How can they improve their mailing results? How can they effectively lower their lists costs?

Simple stuff: Grow your business; save money; improve your bottom line.

Many of our customers are catalogers or merchandisers that fit well into the "sweet spot" of the Black Boxes. As they tested and eventually committed to these environments, we saw the simple truth: The coops work. We also learned a painful truth: the percentage of our clients' campaigns filled by coop names was increasing and we saw an erosion of our commission dollars.

It was gut-check time. We had to decide if we'd try to refute the results or remember that, at our core, Direct Media is the mailer's advocate. Our corporate philosophy, essentially the belief that when our clients are successful, we're successful, dictated our decision. We learned how and why the coops work.

Next, we discussed our clients' mailing strategies with the coops so that they could create improved models for shared customers. Finally, because we understood their value, we introduced them to our clients and helped them become members of the Black Box coops.

The results are very positive. Coordinating multiple strategies within a campaign is helping marketers reach their prospecting goals. Direct Media has learned that combining the strengths of a list-specific database with the depth of transactional data available in the Black Box coops allows us to deliver the most complete prospecting solution ever devised. By using both we can:

• Continue to mail top performing lists and work to improve the performance of marginal and test lists in the normal manner.

• Offer access to lists that do not participate in Black Box cooperatives.

• Offer target-specific selections that identify prospects, independent of list, to determine the best decision makers wherever they may reside.

• Create segments based on company activity and individual activity to leverage company behavior to penetrate top prospect sites.

• Include the most active spenders, based on years of purchase activity, that are selected from the RFM models created by the coops.

By leveraging both types of prospecting environments, we are mining the most responsive and largest universe of prospects from the largest and most inclusive marketing universe ever developed.

Marketers owe it to themselves to investigate both types of environments. They should determine if it fits their prospecting plans, test the names and mail accordingly. A simple analysis of universe opportunity, response and costs will allow marketers to decide if a coordinated effort is appropriate for them.

Michael Tuohy is vice president at Direct Media Inc., Greenwich, CT. Reach him at

mtuohy@directmedia.com.
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