Many mailers are starting to include database marketing in their mail plans, and publishers, who generally have access to more customer data than any other category of mailer, are viewing database marketing as a key component of their mailing strategy.
This is primarily caused by increased new business acquisition costs, list fatigue and the need to develop new and sizable sources. There is a greater acceptance of shared information, and for mailers, the lower cost of a direct mail sourced database is attractive.
Over the past 10 years, database marketing has made a tremendous impact on the way direct marketers promote their products and services. Today, the use of customer and broader universe databases plays a major role in enabling marketers to develop strategies that build targeted lists and marketing programs, find qualified sales leads that closely mirror their best customers, identify and develop new markets and increase customer retention.
For mailers, the direct marketing plan includes selecting those lists that match the demographics of their customer base as well as other elements such as combining telemarketing with your direct mail.
Some of the fastest growing segments in consumer marketing are in ethnic databases. The movement of more Hispanic, African and Asian Americans into the American middle class with home ownership, well-established credit and spending history and the development of new products to reach the growing market segments makes this a key area. Some of the biggest users of the ethnic database besides publishers are fundraisers, credit card issuers, telecommunications providers, insurance agencies and merchandisers. The largest groups segmented are Hispanic, African, Italian, Catholic, Protestant and Buddhist; and more than 70 ethnic groups are represented.
As part of a managed database, mailers who participate receive more benefits than just increased revenue from list rentals. Some of the added benefits include the use of customer profiles appended with mail-order buying habits, lifestyle interests for their own mailings and use of the larger database at reduced rates.
Smaller mailers also find an advantage in using large databases. Regional mailers can take advantage of a rich universe of names in a limited geographic area, which holds the same demographics as the mailer's target audience. This holds true for ZIP penetration strategy as well, in that an affluent ZIP can be mapped to reach similar communities in each state. This strategy is available with a large universe that has the qualified data appended. Niche mailers with changes of address offers benefit from those large databases, which are frequently updated with customer-initiated and NCOA information.
The business arena continues to grow, in stages, because of reluctance on the part of BTB publishers to share data with other publishers and the data control issues that were concerns of many consumer database participants early on.
Database marketing is an important tool used in reaching buyers at four-line business addresses, and typically business databases are smaller than consumer/household universes, but the information captured is key to today's marketing techniques. Such information as SIC, title, number of employees, sales volume and niche markets within the business arena such as working women with families and identified home businesses help mailers reach new markets and acquire important data about their own customer base. The database overlay assures the end user of reaching qualified businesses.
Malcolm M. McCluskey is president of List Services Corp., Bethel, CT.