Private Databases Work for Big MailersWant to cut marketing costs and increase response to your business-to-business direct marketing campaigns? If you mail a million pieces or more per year, you can significantly improve results with a private use database.
In a private use database, names are taken from all the lists you want to mail and maintained in a single, unduplicated database for your company's exclusive use. This costs less than you might imagine, since you pay only for the names actually mailed, and not all the names taken from the various lists and placed into the database.
In a consumer private use database, mail-order buyers comprise a large percentage of the names. But in a BTB private use database, typically 90 percent or more of the names are from controlled-circulation subscriber lists -- the very lists most BTB direct marketers mail to, most of the time.
Business-to-business private use databases are usually enriched with demographic overlays that tell you a lot about the records, including Standard Industrial Classification code and number of employees at the location or company.
These private use databases are then linked with the mailer's house file, capturing additional information such as purchase history. Tag suppresses can be added to records, allowing records to be selected based on previous use -- for instance, you can suppress and choose not to mail to any sites (company locations) that have received your last 10 catalogs and have not purchased anything.
There are several advantages you gain with a private use database over traditional merge-and-purge mailing lists:
Higher de-dupe rates. When lists are brought together in a private use database, they typically unduplicate at a 50 percent rate. With merge/purge, list owners usually extend an 85 percent net name agreement. This means you pay for 85 percent of the list at full rate, and run charges for up to 15 percent duplication. So private database users cut their costs in half versus merge/purge users.
Pay per usage. With merge/purge, you pay for all the unduplicated names you order. In a private use database, you pay nothing to put the unduplicated name in your database. You only pay for the names you actually mail.
Database intelligence. When you rent lists, your knowledge of the prospects on the list is extremely limited. With a private use database, your knowledge of the prospects is extremely deep.
For example, one of our clients is a large seminar marketer. At times it mails brochures for 15 to 20 different seminars a week.
Mailing 15 to 20 seminar offers to a single individual in a week is counterproductive. It is an enormous waste of postage and paper - no one is going to sign up for 15 different seminars in a week. The flood of mailings from the same company is also likely to irritate the customer. With a private use database, you can identify overmailed individuals and suppress their names to cut down the volume they receive.
Tag suppresses. As previously mentioned, you can suppress records by a wide variety of other parameters.
For instance, through linkage with your house files, you can identify which sites in your database are buying your products and which are not. The response to buying sites is anywhere from 2 to 10 times the response to nonbuying sites. By mailing to buying sites and limiting mailings to nonbuying sites with the best firmagraphics (SIC code, employee size, buying influences, etc.), you can substantially increase response rates and dramatically cut wasted postage and printing costs.
Integrated marketing campaigns. In the merge/purge list universe, e-mail lists are largely separate from traditional mailing lists, making it difficult to coordinate a marketing campaign combining paper direct mail and e-mail.
The records in a private use database can contain both e-mail and physical addresses, and you can track who has received postal mail, e-mail or both - and when. So you can easily do an integrated campaign combining print and the Internet to improve your results and lower your costs.
Increased selectivity. Private databases can capture much more data than you get with merged/purged lists. For instance, you can tag records of companies whose mailrooms do not distribute Standard Mail. When you mail, you can segment these names and send them your mailings First Class.
Tracks mailing and buying activity. A private use database lets you know who you mailed, how many times you mailed to them, whether they responded, what they bought and what they spent. So for instance, if an individual received 15 catalogs without buying anything, you may want to suppress his name and not mail to him further. Or you may cut down frequency to one catalog a year versus the four catalogs a year you send to active buyers.
During a recession, when layoffs are frequent, purchasing authority frequently shifts from one individual to another within a company. By tracking sales, a private use database helps identify who within a site has the real buying authority.
Inexperienced database marketers have asked me whether private use databases are too static and do not capture new information quickly enough.
In BTB marketing, the majority of names in these databases are from controlled circulation subscriber lists. These names on these lists do not change frequently -- only at the BPA audit, which takes place once a year. This is because publishers make every effort to retain subscriber names on their list and are reluctant to drop subscribers. They attempt to renew them up to the day of the audit, and for obvious reasons: Their advertising revenue hinges on the subscriber base, and if a subscriber drops from the list, they have to replace him.
Can you duplicate the intelligence you get with a private use database with merge/purge lists? Only if you bring all the old names you mailed previously back into the new merge/purge, link them to your customer files and enhance the data with demographic overlays. If you mail monthly, you would repeat this labor-intensive and costly process 12 times a year.
But doing so is the equivalent of creating a private database for one-time use only. With a private database, you do this work two to four times a year, instead of 12. You save money, effort and time. You know more about your customers -- who they are, where they are, what you mailed them and what they have bought.
With a private use database, you increase the response rates to your mailings, while significantly lowering your postage, printing and list costs. For a marketer mailing 1 million names a year or more, a private use database can make a lot of sense.
Are there list owners that will not agree to let you put their names in your private use database? It is increasingly rare. Reason: Because of the substantial time and money it costs to do a merge/purge, private database users will not mail any list that cannot go into their database. As a result, list owners that provide their names to private use databases get a substantial amount of usage they would not otherwise receive.
When a private user database wants your file, you send all the names at one time -- which means list owners pay for a single run charge. The cost and labor are significantly less than with traditional merge/purge list rentals, which involve a separate run charge every time a mailer does a 5,000-name test of your list.
If you are a list owner, ask your list manager how he can market your list to private database users. By getting the names you own into multiple private use databases, you can significantly increase file turns and list revenues, even during economic downturns: When the economy is soft, marketers cut down on outside list rentals and mail to their database more. If you are in that database, it is like money in the bank -- for you.