Data Management — Niches and Nightmares

RIDICULOUS AS it may seem, database management has been making national news in 2008. Unfortunately, and more precisely, data mismanagement has grabbed some headlines.

For the second time in a little more than a year, the good citizens of Wisconsin have seen their personal information—in the form of social security numbers—left flapping in the breeze of a government mailing. Printers in both cases found themselves sharing in the blame, and the expense, to the tune of hundreds of thousands of dollars for credit monitoring services out of recipient fears concerning identity theft.

The threat, real albeit extremely remote, underscores the importance of the role third-party data manipulation services play in successful mailing campaigns. The stakes are extremely high, and the damage to one’s credibility as a vendor of these services can be severe.

There is a lot at stake for ample reason. Postal rate increases and changes in mailing standards sent shock waves through the direct marketing industry in 2007 which, when coupled with companion increases in paper and other consumables, tempered enthusiasm for the mail marketing channel. Tempered, but not completely dampened.

The Direct Marketing Association (DMA) is projecting healthy annual growth rates in a number of vertical markets between 2005 and 2009, led by healthcare and pharmaceuticals at 10.9 percent. Insurance checks in at 9.4 percent, followed by technology (8.7), automotive (7.8) and business-to-business (7.4). Seven other popular verticals, including telecommunications, retail and hospitality, range between 5.5 percent and 7.4 percent.

Clearly, opportunities exist for those vendors that avail themselves of the latest mailing and database software geared toward providing marketers with optimum payout for the creative, efficient and accurate manipulation of customer information. It all begins with a database of customer information provided by the client to its printer/mail service provider. What that vendor does, or doesn’t do, with the information is what separates the success stories from the tales of woe.

Where There’s a Need

Datamatx, based in Atlanta, prints and mails transactional documents, including bills and statements, for a number of industries. Harry Stephens, president and CEO, notes that his utility customers lack the ability to store and present data graphically. For them, Datamatx may create graphics to represent customer usage over a period of time. Stephens also works closely with customers to devise ways to increase quicker payments from recipients.

For customers looking to promote products or services, Datamatx has entered the world of transpromotional printing through the use of marketing messages placed directly on end-user bills. “Techniques such as highlight color and graphics can be combined with variable messaging pulled from customer data to transform traditional bills and statements into powerful communication tools,” he points out.

“There are print and mail technologies available today that effectively and efficiently track response rates. But it is good to remember that it is the data that drives all this. It’s important to work with all departments that collect and use the data to promote business, whether that’s the client’s marketing, IT or even the finance people.”

Of the services most commonly associated with database management, list hygiene would seem the most remedial and the easiest task to achieve. Yet Stephens points out that 25 percent of all mail contains basic errors, including misspelled street names and improper abbreviations. The undeliverable as addressed (UAA) pieces cost up to 70 cents each to correct, and Stephens says his company uses the latest technologies to not only garner maximum discounts for clients, but to ensure the highest mail-through percentage.

Datamatx also conducts periodic security audits to ensure privacy standards are met for all federal mandates in a variety of industries, including HIPAA requirements and measures intended to eliminate credit card breeches and identity theft. Stephens notes that Datamatx is in the process of obtaining MPTQM (Mail Preparation Total Quality Management) certification, the U.S. Postal Service’s management and standardization assessment system to ensure quality throughout the mail process.

Experience is what helps separate Datamatx from the rest of the growing field of data management providers, according to Stephens. “With data playing such an important role in marketing and promotional strategies today, it’s important for a printer to first understand the intricacies of data management, when it comes to helping their customers increase response rates and foster more business,” he says. “It takes manpower to mine data, and knowledge to know how to avoid the costly issues that can arise.”

Data management should not be viewed as a train that has already left the station. Cheryl Kahanec, vice president and director of digital solutions for Clifton, NJ-based Sandy Alexander, notes how her company transformed from being a printer to a company that joins in the process at the planning and strategy stages.

“The whole industry is changing. We’ve had a convergence of technologies that caused us to have a convergence of industries,” she says. “A printer can’t be just a printer; now you have to be involved in printing, mailing, data management and Web services. We need to offer all of those services because. . .they’re initiating out of the same areas within our customers. These processes don’t happen independent of each other anymore.”

Kahanec feels it is important that Sandy Alexander play an advisory role with its mailing clientele, since it is charged with following through and delivering on that marketer’s vision. In sitting down early with the client, Sandy Alexander can determine how to best leverage the end user information to market the customer’s products and services.

“There’s a lot of brainstorming and discussion about the process,” she says. “The wonderful thing about the technology we have today is that we can produce (their project) almost any way they want to do it, as long as they tell us what it is they want to achieve.”

Sandy Alexander provides services ranging from data cleansing and sorting to conditional data management, analysis and writing business logic for a wide span of verticals, including pharmaceutical, telecommunications, technology, publishing and financial services. Gone are the days when the printer’s main scope was helping clients save money on a per unit basis, though Sandy Alexander has never touted itself as the low-cost provider across any of its product and service platforms.

Kahanec does offer a caveat to those data management providers who consider themselves entrenched once they have initially secured a client’s data collection: Your company still needs to prove its worth.

“If you trust somebody with your data, that is a strong relationship,” Kahanec says. “With that said, if we don’t do a good job, (the customer) will take their data and go someplace else. It’s not as easy as moving a print job, but they will do it. Companies like ours have to continually raise the bar.”

“Marrying Information”

Johnson & Quin, located in Niles, IL, has produced personalized mail with laser printers since 1979. According to Dave Henkel, company president, his firm provides both acquisition mail and continuing customer communications. He views Johnson & Quin’s relationships with clients as being less a marketing and strategic advisor and more of a troubleshooter, ferreting out errors, inconsistencies and misused data. Oftentimes, customers will send Johnson & Quin information from different platforms, leaving them with the challenge of marrying the information.

“We don’t experience too many jobs in the telecom arena where the data is simple, consistent and given to us as scheduled. It’s often more complex, from multiple sources,” Henkel says. “We must have a good understanding of the job so we can properly apply the rules that they’re asking us to apply in setting up the data.”

Johnson & Quin is a resource for a wide range of personalized mailings, from small on-going programs to drops of several million pieces. It also provides basic services such as data cleansing, address hygiene, de-duping and merge/purge.

While not advisors per se, Johnson & Quin finds itself having to offer a degree of guidance. Many of its clients have eroded the middle management structures of their companies, leaving just the higher ups and the junior-level workers. “If we’ve been doing a program for a number of years, generally speaking, we will know that program much better than their internal people will,” Henkel says. “Obviously, there’s a value-add in that.”

Johnson & Quin has worked diligently toward reducing the pain and suffering brought about by the postal increases and standards changes. Henkel feels that many data management and mailing providers stumble over USPS requirements simply because they don’t appreciate the complexity.

Security, too, is a serious issue for Johnson & Quin. Henkel points out there are a number of requirements necessary for doing a financial services communication; ISO 27002 addresses data security and covers general security for financial applications. During 2007, Johnson & Quin spent $250,000 for physical security, staff training and data-related security. It’s an expense that can snowball if not held somewhat in check.

Given the worst-case scenarios that security breeches conjure up, one can’t blame companies for putting their money where their database is. PI