Best Practices When Using Cooperative Databases
by Stephen Lett
Cooperative databases account for at least 50% of all consumer prospecting. Names selected from a coop are super multi-buyers who respond well to any number of different offers. These catalog buyers have been modeled from a cataloger’s actual buyer file therefore they are highly qualified names. What’s more, they represent a good value for the money renting for $70 per thousand or less. Since the founding of Abacus by Tony White in 1990, consumer prospecting has changed considerably. Over time, results have fallen off perhaps due to over mailing the same names. But still, coops remain an important source of prospect names for catalogers today. When participating (or choosing not to participate) in coops, realize that at least 95% of your customers already reside in a cooperative database file. What’s more, buyers on your housefile who have not made at least one purchase from another catalog are not retained by the coop. (These are your unique buyers and they are not used for modeling or rental by the coop.) This month, we will take a look at some of the best practices you may want to follow when using coops. Following these basic principals or practices should enhance your results.
- Don’t block competitors – Rule #1. It is never good to “block” a competitor in a coop from getting access to your names through the modeling. If you set-up a block on a competitor, the coop will automatically block you from any access to their buyers. You have just as much or more to gain than the competitive company you block (assuming their file is larger than yours). Base your decision to block on sound business judgment and not on personal emotions. And remember, other mailers are not getting your list persa rather; they are receiving customer names from a database based on statistical modeling. Yes, some of your customer names will be identified by the model along with buyers from other catalog companies who are members of the coop but not your entire housefile.
- Always take full universes from proven models – Once you have tested and established the fact that a particular model is working, be sure to take the full universe of names within the top tiers (at least tier 1 and 2). You will want to maximize your results by mailing all available as opposed to diluting your results by mailing smaller quantities to more model selects. Rollout with confidence in order to maximize your revenue per catalog mailed within these top performing tiers.
- Test deeper into the proven models – If you know a model works and you have only mailed tier 1, test tier 2 and perhaps tier 3 of the same model. Once you find a model that works for your offer, it makes perfect sense to mail deeper then apply point #2 above. Again, rollout the universe for that tier once you know it is working.
- Always establish and maintain a stable control – Why change a good thing! Be sure not to alter or change the models you know work for the sake of variety. You are well advised to test new models but do this in addition to mailing the proven models and not in place of. Allow room for testing new models in your circulation plans but not at the expense of mailing to proven models.
- Always allow room in your circulation plan to test new models. Just like it is important to test outside lists, it is important to continue to plant seeds by testing new models. It is never good to rely 100% on proven models without testing new ones if you want to grow your business. Test 10,000 names from a new model segment (or two). Have the coop build new models off the continuation models you know are working for your offer.
- Use prospecting models both pre-merge and post-merge. It is common to select names from a cooperative database pre-merge. However, consider taking prospecting models post-merge. Prospecting models taken post-merge help you “hit” the desired quantity to be mailed and they often perform as well as pre-merge models. This guards against scrambling at the end of a merge to find additional names if you “net-out” less than you expected and need to make-up quantity in order to hit the desired quantity to be mailed.
- Include a buyer reactivation model with every merge. This is an excellent way to reactive “old” buyers. Here is how it works. Select all of the housefile R-F-M and inquiry segments you want to mail. Have the cooperative database run a reactivation model on all of the names you do not select by R-F-M. The coop will identify additional buyers and inquiries that can successfully be mailed. Reactivation models identify older buyers who are still actively buying, many times buying from a competitor. Reactivation models identify additional names within your housefile that you would not have mailed. What’s more, the use of these models eliminates the need to make some type of promotional offer, i.e., free shipping, to older buyers for the purpose of reactivation.
- Suppress rental singles in order to increase the RPC (Revenue per Catalog). Cooperative databases identify prospects to mail. Coops can also identify who not to mail. This is done by identifying those catalog buyers from outside rented lists who have purchased infrequently and do not match your customer profile. You can expect a lift up to 20% by suppressing rental singles.
- Take advantage of unselected segments of strong models to build an Add-A-Name pool. Use the unselected segments from your strongest models to build the Add-A-Name pool as fill-in names on the back-end. These names are already qualified catalog buyers which match your own customer profile. This technique will always perform better than a random Add-A-Name pool supplied by your service bureau since a coop like Abacus is pulling these names from your own models.
- Make certain the coop uses your entire buyer file when pulling selects. Doing this will help avoid paying the coops for names you already have on your housefile. Most coops model on your 24-month buyer file. However, most catalogers mail deeper to their housefile. If the coop does not include your full house file, in all likelihood they will identify prospects that already appear on your housefile as buyers to rent back to you.
- Identifying unique names and expanding the prospect universe. Through a strategic partnership with Yankelovich MindBaseâ, I-Behavior can provide attitudinal segmentation models which are more targeted. In addition to delivering higher net names, attitudinal insights have proven to be strong predictors in optimizing multi-buyer names for catalogers. This technique will help expand your prospecting universe by identifying additional names your standard models could be missing.
- Take advantage of SKU level modeling. I-Behavior is one of the database coops who models off of SKU level data in addition to purchase history. This helps to customize targets which can be an advantage for certain catalogs particularly for those who have altered their merchandising mix over time.
- Communicate with the coop. Let them know of any merchandising, creative, or offer changes to your catalog. Databases use responders from past mailings to predict the future responses. They need to be using responder groups most representative of the likely future responders to build the best models. This may be new to file “hotline” buyers vs. responders from the same time last year.
- Use ALL of the coops – Yes, there will be overlap from one cooperative database to another. However, all coops model differently therefore, each one will identify “good” prospect names to mail another one might not.
- Use random allocation – When running your merge, do not give priority to one coop over another. Tell your service bureau to use random allocation in order to give equal weighting to the coops you are using. We like putting the names supplied by a cooperative database in the merge as a group and outside rentals as another group.
Cooperative databases like Abacus, I-Behavior and the other coops provide a valuable source of prospect names. Let them know which models are performing (and not working) so they can tweak the models and/or recommend new models to test. Both of the cooperative databases have stood the test of time and catalogers are well advised to maximize usage. Coops do not provide an unlimited source of “good” prospect names but they do identify the “best” names for your offer modeled from your own customer file. Apply these tips when using selecting prospect names from a cooperative database and your results should improve!