Is Your Data Green?

Feb 04, 2008 7:03 PM  By

Reflecting on Al Gore’s recent acceptance of the Nobel Peace Prize for his tireless work in raising international awareness of global climate change, and opening my mailbox to discover yet another deluge of post-holiday merchandise catalogs, I can’t help but think about the environmental impact of the direct mail industry.

Each year, more than 100 million trees are destroyed, three million cars’ worth of energy is consumed and reprehensible-by-any-measure amounts of greenhouse gas is emitted into the atmosphere—all in the name of producing, distributing and disposing of direct mail solicitations.

The good news is that a growing number of companies, including major retailers, are starting to turn their attention to the problem. In particular, they’re considering the important role of customer data management.

“Duplicate catalogs being delivered to customers and address errors resulting in returned catalogs are key contributors to what is commonly known as marketing waste,“ says Kristin Micalizio, vice president of direct sales at Office Depot.

For its part, Office Depot has adopted a number of database marketing practices and technologies to help eliminate duplicate and returned catalogs, including a real-time customer data integration solution.

The solution combines transaction data with advanced analytics to enable employees at the point-of-sale to cross-sell and up-sell in a more effective manner. It also allows Office Depot to know which (and how many) direct mail offers and catalogs to send to which customers—and when—to maximize revenues while minimizing both costs and environmental waste.

Best Buy is another major retailer beefing up its customer data capabilities, in the process steadily reducing the volume of unwanted direct mail it produces and distributes to the 130 million customers in its database. Over time, the company’s direct mail communications are becoming increasingly personalized, based on customers’ past purchase behaviors, their geo-demographic and psychographic characteristics, and their value to the brand.

“The intention is to be able to offer up only content that we know is going to resonate with the consumer,” says Matt Smith, senior director, customer insight, at Best Buy. His team matches and merges customer data at a transaction level, integrating online and in-store data to enhance customer profiles and eliminate duplicate addresses. “We do a lot of cleansing using persistent key processes to make sure we get the customer data as accurate as possible,” Smith adds.

I’m also buoyed by the Direct Marketing Association’s “Green 15” resolution. Scheduled to launch in June, it includes a set of “environmental action steps” the DMA is encouraging marketers to take “to minimize defective addresses, duplicate addresses, unwanted mail and undeliverable mail”.

These steps include:

  • Merge/purge thoroughly by matching against outside lists, house lists and suppression files.
  • Ensure accuracy of all incoming names by using Zip Code correction, address standardization, NCOA data, etc.
  • Subject outside lists to the same hygiene standards as a house list.
  • Provide mechanisms that allow recipients to modify or eliminate direct mail.
  • Utilize predictive models and segmentation.

Finally, I’ve received a lot of enthusiasm from industry practitioners regarding my forthcoming Aberdeen benchmark report “Green Marketing: Leveraging Customer Data to Reduce Environmental Waste.” (Readers are invited to take the 5-minute survey—
http://www.aberdeen.com/survey/greenmarketing and, in return, receive a complimentary copy of the final report, when published.)

The goal of the report is to further educate the marketplace about the value of customer data management from a green marketing perspective. It could also prompt more database marketing vendors, including providers of list processing, customer data integration and advanced analytics solutions, to follow the lead of companies like Pitney Bowes, which has long touted its environmental stewardship around the mailstream.

Smart vendors should realize that green marketing is a market opportunity. And they should capitalize on it by communicating the benefits of direct mail waste reduction as part of their overall go-to-market messages.

Jeff Zabin is a research fellow at the Aberdeen Group, where he covers customer management technology, and is the author of “Precision Marketing.” He can be reached atjeff.zabin@aberdeen.com.

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