I-Behavior Holds Its Own Against Co-Op Giants
"My clients have been testing I-Behavior since January, and the results are encouraging when compared with the other cooperative databases," said Stephen R. Lett, president of Lett Direct Inc., Carmel, IN. "In all cases, I-Behavior has been performing above the incremental break-even point."
Lett is a catalog consultant specializing in circulation planning, forecasting and analysis. He has several clients participating in I-Behavior as well as in Abacus and Z-24.
Begun in November, I-Behavior is a marketing data and information services business that created a cooperative database of opt-in consumer names. It combines online and offline purchase information to serve as the basis for analysis and targeting.
"We have a number of clients telling us that in many cases we're better than all the other vertical lists and in several of the cases that we're the best list in the entire mailing, beating the other co-ops and the vertical lists," said Lynn Wunderman, president/CEO of I-Behavior Inc., Harrison, NY.
Many participants got out their initial mailings, including I-Behavior names, in January, and results started coming in last month, Wunderman said.
The I-Behavior co-op has 99 committed participants and a database of 25 million buyers who have made a purchase in the past 24 months.
The Hanover Direct catalog files -- which include Domestications, The Company Store and Gump's -- are the anchors of the otherwise anonymous database.
I-Behavior is much smaller than its main competitors, the 1,500-member Abacus Alliance and the 627-member Z-24 co-op.
However, the I-Behavior co-op is considerably larger than Abacus Alliance and Z-24 were at their outset.
Abacus Alliance was launched in 1990 with five original participants.
"Some folks saw good results immediately where there was a lot of affinity," said Brian Rainey, president of Abacus, a division of DoubleClick Inc., New York. "We felt we hit critical mass when we had about 350 participants in 1994."
Experian started Z-24 in late 1991 with about 10 participants.
"It began as a closed co-op to find multi-buyers for those clients to mail," said Peter O'Neil, senior vice president and general manager at Experian, Orange, CA.
Experian shifted its focus about four years ago, opened the co-op and began soliciting more members.
The I-Behavior database is expanding and evolving week by week, Wunderman said. She attributed the co-op's early successes to the integrity of the data used in the models.
Wunderman also said she tries to persuade merchants to stray from the same old selects they take from competing databases.
One health and beauty cataloger who asked not to be mentioned by name is encouraged by the early results of I-Behavior.
"On our first mailing they were beating Abacus by 5 percent and beating Z-24 by more than that," he said. "I wanted to test the whole first decile to see if there was any kind of universe to go back to, but they talked me into a more targeted select, and it's doing great."
While Abacus, Z-24 and I-Behavior models are all based on transactional data, I-Behavior is the only one of the co-ops that uses SKU-level data.
"I believe [I-Behavior's] modeling technique is sound and their ability to model down to the SKU is unique, and it is what makes this database worth consideration," Lett said. "I-Behavior is in a unique position to help catalogers find additional prospect names to mail who may not be identified using traditional RFM modeling techniques."
Even so, at least one competing co-op firm is not convinced that offering SKU-level data is a good idea.
"We look at it every year, but what we've found is that not every participant can give the same kind of granularity of data," Rainey said. "For fairness in the prospecting realm, participants have to be able to get out what they put in, and if everybody can't provide the same level of granularity, it's not an even swap."
Although a few temporary exceptions may be made along the way, Wunderman said almost all of the I-Behavior participants are submitting SKU-level data.
She contends that the absence of SKU-level data hurts the contributor more than it hurts fellow co-op members.
Of course, it cannot be said that Abacus and Z-24 are unsuccessful. O'Neil predicted that Z-24 would double its revenue next year.
Still, Wunderman is not daunted by the prospect of competition with the big boys.
"There's been a real evolutionary process in our model development because when we first started the base, while we had a lot of depth on each individual person in the base, we didn't have a lot of breadth in terms of coverage because the number of clients was limited," she said. "Getting wins from these early builds tells us that it's only going to get better."
As a catalog consultant, Lett welcomes the opportunity to offer his clients a new source of responsive names.
"I firmly believe that catalogers today need all the help they can get," he said. "They need to be able to identify universes and pockets of names that are going to be a source for customer acquisition. The I-Behavior cooperative database is showing real promise and can provide an additional source of prospect names for catalogers."