Though definitive results from the initial tests of its cooperative database for “bill-me” marketers won't be in for a while, Alliant Cooperative Data Solutions already plans to add features and participants to the database.
TransactionBase was conceived not only as a risk management tool to identify and eliminate questionable or bad payers from mailings, but also as a way to identify good prospects for bill-me mailers.
Bill-me direct marketers include magazine publishers; continuity and club marketers; single-shot book, CD or video marketers; catalog marketers and merchandise marketers; or any marketer that lets customers buy now and pay later.
The database contains five years of transaction and payment history from its nine charter contributors. Those clients are the anchors of the database: BMG Music Service, Bookspan — Doubleday Book Club, Bookspan — Book of the Month Club, International Masters Publishers, National Geographic Society, Oxmoor House, Publishers Clearing House, Reader's Digest and Southern Progress.
Nearly three years after its inception in August 2001, TransactionBase was ready for testing in early July following the arduous process of collecting the data, building the database and readying it for use.
“It took us a full eight months longer than we expected to finish the database,” said JoAnne Monfradi Dunn, CEO of Alliant Cooperative Data Solutions LLC, Brewster, NY. “It was a huge project and much more complex than we expected but here we are in production with a product that actually exceeded our expectations and hopefully will exceed the clients' as well.”
Leading up to the launch, the first build of the database was completed in December 2003. It was a static five-year view of customer performance across the participants' databases.
“The analytical team used that database to build what we call 'Proof of Concept' models for all of our contributors,” Dunn said. “While that was happening, the development team was building the update facility for the database as well as our production environment.”
The models were tested blind against participants' historical campaign data to prove the database's predictive power.
Alliant began running its first live jobs for clients in early July. Some have started testing already, and others are preparing to start soon. One such client is Reader's Digest.
“We have not tested anything live yet but we've looked at the models, and we are now at the stage of devising our live testing strategy,” said Kari Regan, vice president of database marketing services at Reader's Digest Association Inc., Pleasantville, NY. “At the Alliant client advisory board meeting in June we saw some very encouraging results. The companies weren't identified but we saw some gains charts on some modeling results that looked good.”
Reader's Digest will test the database for customer acquisition direct mail, she said. It could take 10 months to a year to understand the database's effect.
“It does take us a long time to understand the full value of a service like this,” she said. “We're intrigued and hopeful that this is going to work very well.”
Alliant is not sitting back and waiting for results. While current uses of the database include list screening of prospecting files, order screening of incoming consumers and identification of upsell and cross-sell opportunities on house file names, other solutions are in the works. Alliant hopes to have a real-time Web order screening process in place by the fourth quarter of this year.
“On the Web, many marketers had to hedge their bets and move away from bill-me offers due to really poor pay-up,” Dunn said. “With a real-time tool, they would still be able to offer the bill-me option to reliable consumers.”
Alliant can screen Internet orders in batch.
The firm also is looking to expand the database and is talking with potential contributors, hoping to add at least six in the next 12 months, Dunn said.
Another possible growth area would be through partnerships with the list industry.
“We have been having some early stage conversations with some folks in the list industry in terms of how Alliant can partner with the list brokerage and list management community to more effectively work with mailers and list owners to mine databases using some of our solutions,” Dunn said.
However, she stressed that Alliant does not sell mailing lists and cannot use the data unless it is for a credit-based offer because the database is regulated by the Fair Credit Reporting Act.
One list industry professional said the talks were in very preliminary stages because of the database's complexity but that she was open to the possibilities.
“The database is just incredible as far as I'm concerned, and from a marketing perspective there may be opportunities to help other marketers do things like identify pockets of outside lists that they can mail profitably,” said Rosemarie Montroy, chief marketing officer at Direct Media Inc., Greenwich, CT.
