Sallie Mae's DM Response Rates Increase 50% After Outsourcing CRM

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SAN FRANCISCO -- Response rates for Sallie Mae's e-mail marketing and direct mail programs increased 50 percent since outsourcing its database marketing solution three years ago, according to Kaenan Hertz, marketing director at Sallie Mae.


Hertz was part of a panel yesterday at the Summer National Center for Database Marketing Conference that included Jeff Caplan, vice president/group marketing director at Harte-Hanks. Sallie Mae is the nation's leading source of funding and servicing support for education loans. It manages a loan portfolio exceeding $92 billion in student loans for more than 16 million borrowers.


Three years ago, Sallie Mae "began to transform data from a loan processing system to a customer-centric consumer marketing database internally," Hertz said.


Sallie Mae started outsourcing its data management and campaign selection software "to ensure better functionality," he said. Harte-Hanks was chosen as the outsourced provider.


Sallie Mae integrated consumer and transactional data from all of its affiliated companies, appended Acxiom demographic and segmentation data and tested e-mail address overlays.


Sallie Mae has a 17 million-record database hosted by Harte-Hanks. The database, updated monthly, contains:


* Terrestrial and e-mail addresses.


* Segmentation variables such as source of name/loan, loan amount, loan status, lifestage coding and demography.


* Contact preference information by source and channel.


* Contact and response history for 24 months.


* Prospect information for two of its programs, TrueCareers and Wired Scholars.


Sallie Mae's customer communication goals include loan consolidation, brand enforcement and cross-sell of new and partner products.


Sallie Mae delivers eight to 10 e-mails monthly. It also executes five to 10 direct mail or telemarketing campaigns monthly. Hertz said campaigns are sent in daily waves to control the effect on call centers.


The e-mails build the brand and follow a letter format. Typically, Hertz said, the e-mail test strategy includes three subject line tests. For some products, Sallie Mae also tests creative.


Sallie Mae receives daily reports on e-mail response. Reports also are provided regarding aggregate e-mail response and overall migration trends.


It also gets response analysis and indexes. In an example Hertz presented, a response analysis from a campaign indicated that the population of buyers was younger and less established than Sallie Mae believed.


"This information was used in future campaigns to fine-tune selections, improving response rates and conversions," Hertz said. "Building an integrated marketing database is worth its weight in platinum -- not even gold, platinum."


He also said outsourcing non-core competencies, such as the marketing database functions, lets Sallie Mae focus on marketing rather than infrastructure management.


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