The already crowded consumer co-op database landscape recently got even busier with the introduction of Wiland Direct, the sixth major player in the game. Wiland joins Abacus, NextAction, I-Behavior, Prefer, and Z24. As such, mailers need to question if there is anything to be gained by being in all six databases. Let’s take a look at some of the areas to consider when answering this question:
1) The value of the multibuyer name. Participating in multiple co-ops creates a large pool of multibuyer names. While it’s known that a multibuyer is a valuable name, it is important to classify the multis into three categories: rental to rental, rental to co-op, and co-op to co-op, meaning that names from say a Sharper Image transaction showed up on an Abacus Alliance database on the NextAction co-op for example.
These groupings perform differently based upon the category and price range of the catalog. For example a niche catalog should get better performance from a rental to rental multi whereas a wide product varity catalog should see better better results from a co-op to co-op multi. To determine which grouping is best for your offer, have the service bureau key the multis into the three groups and then read actual mailing results. Seasonality may play a part in performance, so this should be tested in and out of your big season.
2) The value of market research reports. Market research is available from co-ops at a variety of price levels, from free to thousands of dollars. While this valuable information is interesting, you need to make it actionable. What will you do with this research? How will it change what you do? Will it change the direction of your company – mail dates, circulation, product offerings, etc.?
The value and accuracy of market research should be tied to the size of the co-op database and, in particular, the size of your competitive market within each database. The value of the research is only as good as the source.
3) The value of outside-sourced data. Some of the co-ops have affiliations with other information sources. This allows for creative ways to divide up the existing database into finer selections and at the same time go deeper into these selections. For example, you may have been able to successfully mail segment 1 of a model. You’ve tried segment 2, but it’s performed below index. If you were to add a household income select to the model you may find a hidden group of names in segment 2 that will now perform above index.
4) The value of house file models. If your circulation strategy includes reactivation of lapsed buyers, it is important to go beyond your own, internal RFM data. The co-ops identify which of your lapsed buyers are still responsive names. Beyond recent activity, co-ops look at your lapsed customers’ overall buying behavior – do they buy on a seasonal basis, are they still buying home decor, or do their recent transactions indicate that they are buying children’s items?
It is important to test a couple of co-ops at the same time for house file models. Your service bureau should do a mini-merge of the house file models to separate unique names by co-op and to group together the names provided by multiple co-ops. By doing this you will be able to get an accurate understanding of the value each co-op is providing.
In making your evaluation of how many co-ops is the right amount, it is important to review more than just the prospecting portion of the relationship. The overall relationship with each co-op,and all of the “value adds” that each offer should be part of the final equation.
Patricia Hoyt is a senior account executive with New York-based list services firm ALC of New York.