While the term “databasing” has become commonplace over the past two decades, it has taken on a range of meanings.
Within the list industry, databasing holds a special connotation that relates primarily to one or more functions:
* Use of a public database.
* Use of your customer/prospect data to develop targeted mailing lists.
* Building of a proprietary database from house files and outside list rentals.
For technology marketers, proprietary prospecting databases, in particular, have grown increasingly popular, and for good reason. The whole concept of these databases is to create a win-win situation for list owners and mailers. By using proprietary databases, hi-tech mailers gain access to a large, unduplicated pool of names, available in a just-in-time environment. Most importantly for hi-tech mailers, a modeled proprietary database is the only way they can mail cost-effectively.
As a mailer advocate, I have the greatest respect for the power and potential of proprietary databasing. In fact, my comments here are for the sole purpose of helping this young form of marketing survive against a rising backlash. For list owners, participation in a proprietary database holds the promise of a source of list-rental income, assuming that their lists are used regularly.
Unfortunately, poorly engineered and marketed proprietary databases don't ensure that the list owner will receive the expected “return on investment” from its contribution to the proprietary database. The question on many list owners' minds is, “Are we really winning?”
Evaluate: The answer is yes, we are really winning. In fact, list owners can rest easy. When a hi-tech mailer makes the decision to create a prospecting database, it's not a decision made lightly. It's a long-term commitment — a commitment of valuable resources, marketing dollars and energy.
A well-run prospecting database can yield great results for the mailer and the list owner. Unfortunately, in the past, some list owners have had a negative participation experience and have become reluctant to consider any database whatsoever, lumping the whole group together like bad apples. It's time for the list industry to take a good, hard look at the potential of hi-tech databasing before we strangle the proverbial golden goose.
Educate: To even the playing field without losing the players, education must be the first order of business. Mailers need to understand the effect on the list owners' rental income programs, and list owners need to be more open to new and innovative marketing strategies.
Mailers need economic access to the names in a nontraditional way, while list owners need to be fairly compensated for their valuable data. It's easy to create a win-win situation when list professionals mediate and when the clients (mailers and list owners) respect and accept the guidance of their brokers and managers.
The benefits to technology mailers — a greater supply of cost-effective names, better market segmentation, the ability to aggregate and hold data, greater universes, merge-purge cost savings and overall improved mailing efficiencies, including deliverability — need to be reinforced. Similarly, list owners have to be reminded of the greater potential for rental income while minimizing the costs of processing multiple orders. And, even more importantly, owners need to understand that for a growing number of mailers a proprietary database is the only way they can mail profitably. Left to traditional methods, the technology mailer would not be able to rent the list at all.
Assume responsibility: List managers and brokers share the responsibility of protecting and representing the best interests of their respective list owners and mailers. Mailers need to be reasonable. It's unfair to expect list owners to incur all the up-front list fulfillment costs and attendant risk without a high degree of confidence that there will be a reasonable reward. Smart mailers know it's in their own best interest to make sure the list owners are fairly compensated for their data.
List managers need to understand more about contemporary databasing techniques. If you fail to educate yourself, you can't educate your list owner, which virtually insures a negative attitude from the list owner. There are so many successful examples of hi-tech prospecting databases that it's easy to encourage clients to “embrace that database.”
And, list brokers, you're responsible for educating your mailer as to what is fair and reasonable. You need to support equitable practices. You should take responsibility for administering the program. In many cases, it is the trust that the manager and list owner have in you that motivates the owner to participate.
The times they are a changin': What worked in the past doesn't always work in the present. Mailers need to continually innovate to grow and to survive. Our job is to help them succeed.
The list industry must take a realistic view of proprietary prospecting databases so that we all grow together and not at the expense of one another. I'm confident that it, too, will advocate for fair and reasonable policies that satisfy the objectives of mailers and list owners.
David O.Schwartz is president of 21st Century Marketing Inc., Farmingdale, NY, a direct marketing media company.
