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