Print Solutions November 2006
Cover story
VARIABLE DATA PRINTING
An Introduction to Database Management
Use your unique position as a print distributor to enhance VDP returns for
clients
By Rebecca Trela
With so many printers offering the same basic variable data text capabilities in
direct mail, how do you distinguish yourself to clients? The answer may lie in
a burgeoning data- and knowledge-based sector of the economy.
“When it comes to VDP and databases, I think most distributors haven’t yet seen the tremendous opportunities,” says Roger Buck, CDC, national sales manager at Ward/Kraft, Inc. In the world
of direct mail, distributors and brokers are just beginning to tap into the
potential revenue from mail list manipulation. Cast broader, that database
management net could catch new clients and higher profits.
Today, end users are typically marketing or creative types, not traditional
print buyers. Selling to a marketing staff is different, many say, because
their focus is primarily on returns and performance. They ask,
“what can this campaign do for our company” not, “what does this campaign look like?”
In short, the smart seller knows he is someone who can solve a business problem,
rather than just deliver a lower price. If you take the time to gather good
information, this long-term agenda will serve future campaigns.
The Areas of Your Expertise
Database management is a sliding scale of simple to complex offerings. With a
new client, or a client not yet familiar with the kind of returns possible with
variable data printing and 1-to-1 marketing, start with an inexpensive and
simple fix, such as a merge/purge/de-dupe of their existing mail list.
After that, says Mike O’Brien, managing director of strategic solutions at Jerome Group, standardize the
addresses so they're easy to update and are USPS-compliant. O’Brien has extensive experience with database management and tailored mail lists.
“You’ve just increased the probable delivery of your mail list, that simply,” he says. Run a “move/update” operation on the list, which comes from a nationwide rolling file of about 90
million records, listing Americans who've moved in the past 36 months. It’s available through USPS-licensed providers and the postal service website.
“Also, there are a few subscription lists on the market that identify deceased
individuals,
” O’Brien says. Although they’re files of only a few million addresses, “bumping your list up against this file periodically goes a long way towards not
offending the surviving spouse,
” O’Brien says.
“It’s very surprising how much most people don’t know about their data,” says Bill English, CFC, of Superior Business Solutions in Kalamazoo, Mich.
English recalls a recent job when the customer sent the postcards and the
address list directly to the manufacturer, and the list hadn't been cleaned. The manufacturer noticed the duplicate addresses, stopped the
job and de-duped the database—delaying the postcard mailing for several days.
“The customer was unhappy,” English says, “and the manufacturer was unhappy because they couldn’t charge us for this service that needed to be done, which the customer probably
wouldn't have paid for, anyway.” Now, he says, the company is trying to explain database services more clearly
to customers, but it's a “trial and error process.”
Once an address database has been operated on by simple in-house functions, the
customer has a solid base with which to begin direct mail. Some companies offer
test mailings to try out the coupon, copy or graphics.
“It’s critical to prove your worth—because you’re going to charge a lot, later—by doing a test mailing at a fairly low markup,” Buck says. “Once you determine what the customer would spend to increase sales and you have
the anticipated response rates, you should be able to reach a target price.
”
Most database acquisition done now is priced on a per-name basis—a list house or a manufacturer will supply thousands of addresses at a several
cents per name price point, and the distributor will mark up the list several
pennies more. Of course, if the client can find the list at a lower price point
next time, the distributor has shown no value and may lose the account.
This is the point of add-on services. Several mail houses offer “boutique” address lists, sorted by age, median income, interests, credit card purchases,
even eye color. Some publishing houses offer lists of their magazine
subscribers.
“Every customer database is potentially coveted by some related vertical market,” O’Brien says. Many publishers rent these lists for additional revenue, and some
houses even compile lists through
“inferred analytical data”—such as guessing a person’s median income, for example, by car, yacht and stereo purchases. Extensive
client interviews will reveal exactly which lists to shop for.
“Very often the size of those files isn’t big enough for what the marketer wants to do, though,” O’Brien says, which necessitates more than one overlay list. For example: a
sporting goods company rents the subscriber lists for five different hunting
magazines. If a name appears on more than one list (or all five), the
distributor needs to establish a hierarchy of keeping a name and from which
list. Usually, you keep the name from the cheapest list or, more importantly,
the list you have proven experience with.
“Typically you will engage with a list manager for a net name arrangement,” O’Brien says, which means that for every 100 names, there is a certain percentage
of duplicates. A standard net is about 85 percent, he says. There is also a
“running charge” for finding the unused names, generally $5 or $10 per thousand.
Track each step along the way, advises Buck, and show the ROI and value of each
service when negotiating with the client.
“The charge for the itemized service should be lost in the ROI of the program if
it's done correctly.”
Is the Price Right?
Every customer is different, says Patrick McGuffey, owner of East Texas Business
Printing, and every list experience is different. McGuffey may keystone, or
double, the cost per name—but cautions that with some customers, he can’t always get a marked-up price. Some distributors suggest acclimating the
customer to intangible solutions in stages, moving upwards in levels of
involvement and price.
As your mailings grow, they should grow more refined. This will lead to greater
effectiveness and more prospects, lowering the cost per acquisition and
boosting the customer's ROI. “Now, you can charge 10 percent of the results and maybe more,” Buck continues, “which gets your customer in the mindset of paying for results. It protects you
from the print salespeople who can't or won’t do this.”
You’re best off keeping it in simple terms, says McGuffey. “You don’t have to show the customer everything you’re doing,” he cautions. “Show them how you’re increasing recency, frequency, and dollar amount. Then, go do the work.”
“Most people in our trade give this service away, and they’re fools for doing it,” says English. “People who sell print have a hard time selling data services.”
Carol Schwachenwald, president of Integrity Document Solutions in Indianapolis,
has been selling mail lists for about five years, mostly to church groups.
“You really have to work with the clients to understand who their target market
is and what approach they want to be taking,
” she says. When she first started, clients had to be educated about the process
and possibilities.
“They would say, ‘I think I might want to buy a mail list.’ And I’d be a consultative seller: ‘Okay, tell me about that.’” Now, Schwachenwald says, most of her clients are savvy and know what effect
they want.
Marketing personnel are very loyal buyers, some say, because they’re focused on results, not price. Once a job is completed to their satisfaction,
they will turn to you time and time again to solve their problems and
“ease the pain.”
At the marketing manager level, McGuffey explains, the client who understands
the value of information doesn't care about the extra 35 cents postage per piece, because a long-term
relationship has begun between the mail recipient and the retailer.
Beyond the Database
For the savvy distributor, though, acquiring and cleansing a list is only the
beginning. The print world is uniquely positioned to administer database
functions in conjunction with other software applications the client uses,
including their back-end accounting system, as well as printing press software
and online offerings. It's a step away from the world of selling forms, but you’re still helping the end user achieve the same objectives, some say.
“For a number of our clients, we maintain mirror image databases of their
customer files,
” O’Brien says. “In most organizations, the customer databases are housed on the operations side,
and the marketing/sales teams don't see them. So we do that for our marketing people.” This maintenance includes accepting a customer information feed and managing
and monitoring that data.
“We’ve developed web-based query tools that a client can access in a secure online
environment,
” O’Brien continues. “How many people bought a particular product last month? How many companies with
more than 100 employees bought that product?
” If his client doesn’t know how many employees their customer who bought the product has, Jerome will
acquire a mail list of that data and overlay the two data sets. O'Brien also seeks revenue by building databases for companies without IT
departments, warehousing client data, and making the warehoused data usable
through marketing initiatives that come from other parts of the company.
Rebecca Trela is assistant editor at Print Solutions magazine. Email comments to rtrela@PSDA.org.
