Database Management -- The Cleaner, the Better

EVEN THOUGH mailing and database management services have been around since the 1980s, a substantial number of printers expanded into this highly technical (and profitable) market as competition heated up with the new millennium. Today, more printers are continuing to invest in these capabilities in spite of—or, perhaps, because of—the bleak economy. After all, the weaker the financial outlook, the more important it is for service providers to ensure a bigger bang for their clients’ shrinking print dollars. And, in the world of mailing services, the more accurate and targeted the database, the higher the response rate. The higher the response, the better the marketer’s ROI. Ultimately, the key is list hygiene.

Baltimore-based Vertis Communications has been providing data management and list hygiene services for 25 years. Art Hall, vice president of integrated data solutions, reports that recent changes in USPS requirements have Vertis’ clients asking for more consultation on how to comply with the new regulations to increase their postal savings.

Certainly savings are important, but does that mean services like list hygiene become more important during tough economic times, when marketers are cutting back on printing spend? “The cleaner your addresses, the better chance for your message getting into the hands of your target audience. This also reduces the number of pieces to be printed, the number of undeliverable pieces and the postage required for those pieces,” Hall says.

“And the new postal regulations require more hygiene processes to be performed in order to obtain the best postal discounts available. Without the postal discounts, the postage incurred could cost more than the printing of the actual mailing.” In the past, Hall notes, a certain amount of non-deliverable pieces were not only tolerated, but often expected. However, companies are now coming to Vertis seeking solutions that can help them get to 100 percent deliverability.

Prior to the economic downturn, there had already been a shift in the focus of list hygiene to a more strategic role in marketing strategy and campaign performance, he adds. “The change in importance in this role has resulted in these services becoming a separate profit center at Vertis and for many of our clients.”

Equally important, these service offerings further cement Vertis’ relationship with customers, “especially on the more difficult and complex processing,” according to Hall. “Clients gain confidence in our capabilities as a marketing partner and begin turning to us to resolve postal processing issues, even during the program development stage.”

By leveraging its mailing expertise, Vertis developed an Optimal Postage program that has saved customers thousands of dollars in postage by separating the mailstreams into direct induction, co-palletization and co-mingling pallets, allowing them to gain deeper postal discounts.

Hall believes that in coming years clients will continue to challenge providers to shorten their cycle times, and client communication will have a more one-to-one relationship to the recipient. He also predicts that there will be a growing concern about data security.

A Decade of Service

Rochester, NY-based Cohber Press has been providing mailing, database management, list hygiene and related services since 1999. And, like Vertis’ Hall, Cohber President Eric Webber reports that those services are more in demand than ever.

“More companies are working smarter by using data mining techniques to identify potential markets that they otherwise might have overlooked,” explains Webber. “Using list hygiene techniques, including standardization and National Change of Address (NCOA) features, they are able to clean up their databases and get rid of incorrect or outdated information.

“Data management techniques, such as data modeling and data profiling, enable our clients to understand who their best customers are and what they look like as an organization (size of company, geographic location, SIC code affiliation, number of employees, gross revenue, number of locations, etc.). By doing this, they are better able to target their next marketing program.”

Cohber Press helps clients target prospects that match their best customers’ business type, SIC group, geography, demographics and any other relevant statistical information. This can be done for both business-to-business and business-to-consumer marketing.

“It is more cost-efficient to mail fewer records with a higher response rate, rather than blanketing a geographic area with non-relevant information,” Webber says. “We have found that mailing more targeted records with a smaller file quantity actually gets a higher response and conversion rate.”

Increasing the likelihood of matching customers that have been proven to be relevant and reliable boosts the response rate and ROI of any given marketing program. Cohber uses other techniques to strengthen response rates, such as tracking response rates, online response mechanisms, and personalized text and imagery on the marketing pieces.

Cohber’s list hygiene services are also growing because of the new USPS regulations. “If a customer is combining several lists, there is a need to standardize this information into a common format and pass it cleanly to the NCOA database in order to reduce mailing costs, as well as run the file as one database pass rather than several smaller passes,” Webber details. “This allows time-sensitive files to be run more quickly in one pass, and minimum charges are avoided when passing the data against NCOA.”

Thorough processing also increases customer satisfaction when a file is returned to them with the appended relevant information and data cleansing, he continues. “In-house databases can now be updated with this pertinent information and kept internally, so that future analysis can be done effectively and our clients know that their information is up-to-date.”

As an example of how Cohber Press saves customers money with their mailings, Webber describes a recent job. “Due to the tough economic times, instead of printing and mailing 25,000 pieces to the Rochester area, the customer only had the budget for 5,000 records, and we’d supply them with the prospect list.

“In the past, their typical response rate was just under 1 percent. Cohber modeled their current customer list, created a profile using statistical algorithms and came up with a targeted prospect list of 5,000 records. We then printed their mail piece with a PURL to track online responses, as well as included a phone number with an access code for further information. The access code was provided to track this particular mailing more accurately.”

Webber reports that four days after the mail was dropped, the customer experienced a 7 percent response rate to the mailing and anticipated a high conversion rate.

Like Vertis’ Hall, Webber reveals that Cohber Press has developed several profit centers associated with its data management and list hygiene services, including list conversion, NCOA, data modeling, data profiling, list acquisition and specialized database development.

“The more we know about recipients, the more we will mine the data to constantly improve the marketing results,” he says. “This evolution will require management in many aspects including data hygiene, data modeling accuracy, statistical anomalies in results (and how to anticipate those anomalies), and analysis of the overall process. Cohber is positioned to grow with this process because of its talented cross-functional units and cross-trained personnel, who continue to drive results-oriented marketing programs.”

Industry-wide, however, Webber predicts that printers without data specialists will lose customers to competitors that provide all of these services under one roof—and that can give customers price breaks, as well as secure data chain-of-command. He also foresees the USPS continuing to propel increased address hygiene to reduce its UAA mailing costs, which, according to postal service statistics, can be as high as $2 billion annually.

Relative Newcomer

While the Whitmore Group of Annapolis, MD, has been in the database management business half as long as Cohber Press, the company has made great strides in making the niche a key part of its continued growth. George Shenk, president and CEO, reports that many of his clients are not aware of mailing compliance, especially changes such as the Move Update requirements enacted in November 2008. Those changes, coupled with his customers’ lack of up-to-date knowledge on mailing, have produced a surge in volume for Whitmore’s database management offerings.

Much like Vertis and Cohber, the Whitmore Group is experiencing an escalation in customer requests for list hygiene due, in part, to the current economic crunch. Because marketers have reduced budgets, Shenk says, they want to spend their money as wisely as possible.

“In order to ‘de-dupe’ a list, the data should be standardized as much as possible, especially if it’s merged from multiple sources,” he maintains. “A clean list gives the customer the right quantity to mail, which saves on printing costs.”

Shenk emphasizes that he’s also saving clients money by standardizing their lists for the most effective merge/purge, as well as looking at the cost savings of drop shipments.

The increasing demand for database services has turned that service offering into a profit center for the Whitmore Group. “Each step of the process is an opportunity to not only make money, but save the client expenses that are just wasteful—such as mailing to a bad address,” the chief executive notes.

Having the right technology is key to providing the best possible services, though. In Whitmore’s case, executing the Intelligent Mail Barcode (IMB) service will require an upgrade to its addressing equipment. The company already realized a major savings in labor costs by adding a “mail palletization” option to its postal software, ultimately saving a great deal of time and labor by not having to manually prepare mail in sacks.

Forecasting future industry trends, Shenk hopes to see more automation of manually intensive processes, such as the USPS requirement that Move Update info be provided by companies when an employee leaves, just as residents must submit change of address info when they move. He would also like to see the development of online job submissions, so that jobs could go through an automated process of data hygiene and directly to print with little intervention.

“Technology has kept Whitmore on the leading edge,” concludes Shenk, “and now technology will ensure that the mailing division will stay ahead of the power curve, as the USPS continues to throw curve balls at mailing operations and consumers across the nation.” PI