HCI Direct Joins Bill-Me Co-op to Boost Prospecting Volume
The more than 30-year-old company has about 2 million active customers and sends about 40 million acquisition pieces nationwide annually, yet it still faces challenges finding more acceptable names for prospecting. As a result, HCI Direct began working with Alliant Cooperative Data Solutions in early 2004, inviting Alliant to build a model to be compared against models from other companies.
"They built a model utilizing detailed histories of consumer response and retention patterns across thousands of direct marketing offers, making for a powerful direct mail model," said Marijke Bekaert, senior director of database marketing at HCI Direct Inc., Bensalem, PA. "A post-analysis of this model showed that [using it] would help us in our future marketing endeavors. We then applied the model in our January 2005 mailing."
After further testing, HCI Direct officially joined TransactionBase this month.
Alliant launched TransactionBase for the bill-me segment of the direct marketing industry in July 2004 with five years of transaction and payment history from its nine charter contributors. Those clients are the anchors of the database: BMG Music Service, Bookspan, Book of the Month Club, International Masters Publishers, National Geographic Society, Oxmoor House, Publishers Clearing House, Reader's Digest and Southern Progress. Since then, Scholastic has been added and now HCI Direct has joined.
"We decided that the next step would be to contribute our own data to the Alliant database so that we would be able to request a model which will incorporate our own transaction data in addition to that of other contributors," Bekaert said.
As a result, HCI can mail more deeply into files with names that were considered marginal before, increasing the company's prospect universe.
"For example, instead of mailing just the top five score groups on an outside list model, we can now mail score groups six to 10 as well if the list owner approves the additional processing on the six- to 10-month segment," Bekaert said. "Most list owners see that their usage will increase if they allow us to mail marginal names with the Alliant model, so they approve this new approach readily."
Bekaert would not comment on the volume of additional names that participation in TransactionBase has let HCI Direct mail.
An Alliant executive said HCI Direct's approach highlights the database's dual functions.
"It's a key addition for us but what's really key about it is what HCI is doing with it," said Rick Witsell, vice president of marketing at Alliant Cooperative Data Solutions, Brewster, NY. "The traditional participant in TransactionBase is a bill-me marketer that is looking to reduce their bad debt. What we've been able to do with HCI very successfully is show them how to find more people that are going to be profitable."
In addition, Alliant applied predictive modeled payment behavior variables to HCI Direct's new starts to make them more appealing to other marketers, Bekaert said.
"Since these customers do not have any payment history yet with us, applying those scores created credit-qualified prospects for other marketers," she said.