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Thank you for your sponsorship The New Pioneers: Best Practices in Database Marketing Michael Bloom – Datran Media John Princiotta – Publishers Clearing House John Carter – Equifax Marketing Services Moderator: JoAnne Monfradi Dunn – Alliant May 8, 2008 How Marketers are Utilizing Databases to Target Best Customers and Improve Profitability Michael Bloom General Manager The New Pioneers: Best Practices in Database Marketing 3 - May 8, 2008 3 Datran Direct is the Offline and Multi-Channel Division of Datran Media Datran Media is the Leading Email Inbox Marketer in America • Online List Manager for 4,000 Internet Websites • Online Media Channel for 1,000 Advertisers • Datran Media Consumer Database: – 175 Million Email Addresses Including 50 Million With Direct Mail Addresses – 100% Opt-In – Every Consumer is Permissioned • Direct Mail List Rentals Available through ClickSpenders™ The New Pioneers: Best Practices in Database Marketing 4 - May 8, 2008 4 Direct Mail Industry at a Crossroads Postal Costs UP Paper Costs UP Acquisition Costs UP PROFITS ARE DOWN The New Pioneers: Best Practices in Database Marketing 5 - May 8, 2008 5 Expire Reactivations – Even Top Segments are a Direct Mail Challenge • Direct Mail Financials NOT WORKING • Mailable Universe DECREASING • Expire Universe INCREASING • Old Expires – Response TOO LOW to MAIL How Do We Stop The Slide??? The New Pioneers: Best Practices in Database Marketing 6 - May 8, 2008 6 The Scales are NOT Tipping in Our Favor ACTIVES EXPIRES The New Pioneers: Best Practices in Database Marketing 7 - May 8, 2008 7 Datran Media & Alliant Data – Joint Research Study on Multi-Channel Preferences Email Consumers Direct Mail Consumers 52% Match Rate The SAME Consumers Are Buying From BOTH Direct Mail AND Email Marketing Channels - 44% have bought Family-Oriented products via BOTH channels - 40% have bought Beauty & Diet products via BOTH channels The New Pioneers: Best Practices in Database Marketing 8 - May 8, 2008 8 There IS a Database Solution . . . . . . . • Eliminate Postal Costs • Eliminate Paper and Printing Costs • Reach Expire Segments Previously Untouched • Reduce Costs Per Reactivation Migrate Expire Reactivations to Lower Cost Email Channel • Leverage the Linkage Between Channels! The New Pioneers: Best Practices in Database Marketing 9 - May 8, 2008 9 Reactivate Expires Through eAppends and Email Campaigns • Perform eAppends on Expired Segments • 10-20% Match Rate On Expire Files • Every Matched Consumer is Already Permissioned for Email • 1.4 Emails Per Matched Consumer • Email Campaigns - Drive Consumers to Websites, Phones, OR Direct Mail Pieces • 15-25% Response Gains on Multi-Channel Campaigns • The Financials WORK! The New Pioneers: Best Practices in Database Marketing 10 - May 8, 2008 10 Reactivate Expires with eAppends and Email Campaigns The New Pioneers: Best Practices in Database Marketing 11 - May 8, 2008 11 Multi-Channel Success in Traditional Direct Mail Verticals Telecomm & Cable Publishing Non-Profit Catalogs Credit Cards The New Pioneers: Best Practices in Database Marketing 12 - May 8, 2008 Insurance 12 Thank you. Michael Bloom General Manager The New Pioneers: Best Practices in Database Marketing 13 - May 8, 2008 13 Employing the Latest Print Technologies to Become More Relevant in Today’s Marketplace John L. Princiotta Senior Vice President, Marketing The New Pioneers: Best Practices in Database Marketing 14 - May 8, 2008 “Old PCH” •Direct Mail •Magazine Subscriptions •Mass Marketer “New PCH” •Multi-Channel •Broad Range of Merchandise •Mass Customization The New Pioneers: Best Practices in Database Marketing 15 - May 8, 2008 Timeline • Company founded in 1953 as a true “clearing house” of magazine offers • Sweepstakes was introduced in 1967 • Late 1980’s: books, music, videos and general merchandise became a growing part of the sales mix • Early 1990’s, backend programs were created for key affinity categories • Over time, we’ve continued to develop new affinity categories The New Pioneers: Best Practices in Database Marketing 16 - May 8, 2008 A New Solution • Database Marketing and • Innovations in printing technology Plus a strategic commitment to delivering relevant offers! The New Pioneers: Best Practices in Database Marketing 17 - May 8, 2008 Targeted “Microaffinities” High share of sales and… …an overall lift to the mailing The New Pioneers: Best Practices in Database Marketing 18 - May 8, 2008 Magazine “Microaffinities” Women’s Interest Magazine Buyer The New Pioneers: Best Practices in Database Marketing 19 - May 8, 2008 News or Science Magazine Buyer Digital 4-Color Imaging--Continuity Program The New Pioneers: Best Practices in Database Marketing 20 - May 8, 2008 Pecan Buyers FRONT The New Pioneers: Best Practices in Database Marketing 21 - May 8, 2008 BACK Mixed Nut Buyers FRONT The New Pioneers: Best Practices in Database Marketing 22 - May 8, 2008 BACK Merle Roberts Beauty Cream Buyers The New Pioneers: Best Practices in Database Marketing 23 - May 8, 2008 Reventin Anti-Aging Product Buyers The New Pioneers: Best Practices in Database Marketing 24 - May 8, 2008 Each Offer is Fully Personalized The New Pioneers: Best Practices in Database Marketing 25 - May 8, 2008 Invoice Cross Sells Targeted offers pull better! The New Pioneers: Best Practices in Database Marketing 26 - May 8, 2008 Invoice Cross Sells The New Pioneers: Best Practices in Database Marketing 27 - May 8, 2008 Thank you. John L. Princiotta Senior Vice President, Marketing The New Pioneers: Best Practices in Database Marketing 28 - May 8, 2008 Financial Services Direct Marketing Trends John Carter, Ph.D. SVP, Analytical Services The New Pioneers: Best Practices in Database Marketing 29 - May 8, 2008 Significant Increase in Mortgage Delinquencies is Impacting the Financial Services Industry Equifax First Mortgage 30+ Past Due Dollar Trend 35% 32.15% 32.39% 30.81% 30% Percent 25% 20% 15% 10% 4.40% 4.50% 4.55% 5% 0.54% 0.55% 0.57% 4q01 1q02 2q02 3q02 4q02 1q03 2q03 3q03 4q03 1q04 2q04 3q04 4q04 1q05 2q05 3q05 4q05 1q06 2q06 3q06 Dec06 Jan07 Feb07 Mar07 Apr07 May0 Jun07 Jul07 Aug07 Sept0 Oct07 Nov07 Dec07 Jan08 Feb08 Mar08 0% Total • • • Prime SubPrime Has resulted in the shuttering of mortgage finance companies, disruptions in pipeline flows, loan loss reserve increases, and underwriting tightening Home Equity, Auto and Bankcards are showing similar delinquency trends Some encouraging signs this month with credit scores rising and delinquencies falling, although it could be a seasonal effect The New Pioneers: Best Practices in Database Marketing 30 - May 8, 2008 Tough Economic challenges are driving new innovations and practices • More rigorous management of existing customers • Increased utilization of triggers for credit and marketing applications • Utilizing of non-traditional data for emerging markets • Implementing point-of-sale decisioning for delivering direct marketing offers to new and existing customers • More sophisticated data/analytics for segmentation, targeting and retention strategies The New Pioneers: Best Practices in Database Marketing 31 - May 8, 2008 Customer Account Management Trends • Risk and Marketing are becoming more closely aligned • Frequency of programs is increasing – Quarterly to Monthly to Weekly driving higher ROI – On all portfolios from credit card to auto to mortgage • Triggers are being used on daily basis – Manually working trigger leads – Assessing value of leads and prioritizing • More sophisticated analytics are being used – – – – Marketshare / Walletshare studies Customer Valuation Models Attrition models to predict household defection Predicting when consumer will have near-term need for credit based on recent credit trade line, inquiry, loan maturation, and / or utilization activity The New Pioneers: Best Practices in Database Marketing 32 - May 8, 2008 Customer Account Management Trends • Financial Services companies are incorporating new data into account management processes – Assets, Income, Home Equity, Net Worth, Discretionary Income are being incorporated into decision process – Consumer Transactional Data – Spending, intent-to-purchase, purchase transactions, etc. • Time series data/analytics are used to identify consumers with positive risk profiles – Improving risk scores – Diminishing adverse information – Attractive credit utilization levels The New Pioneers: Best Practices in Database Marketing 33 - May 8, 2008 Trigger based applications are in wide use • Triggers are now aggressively being used to manage consumer profiles (positive and negative) and quickly react to consumers’ changing needs – Event-Based Triggers identify consumers based on individual inquiry, trade line, or loan maturation attribute changes indicating that the consumer has a likelihood to be currently “in-market” for new credit – Predictive Triggers use consumer data to predict if a consumer is likely to be “in market” for credit such as home equity or loan consolidation – Lifestyle triggers identify people getting married, having kids, changing jobs, buying a new home, moving, retiring, etc • Speed of information is critical – daily data feeds is The the New Pioneers: Best Practices in Database Marketing new requirement 34 - May 8, 2008 Emerging Markets • There are 30+M consumers without traditional credit – Minorities, immigrants, young adults, elderly, divorced/widowed and others • Marketers are searching for new data to target these consumers, authenticate their identities and measure their credit worthiness through non-traditional data – – – – – – – – • Telco/Utilities (phone, wireless, utilities, cable) Rental Payments Checking / Saving Income / Employment History / Occupation Auto Insurance and Claims Continuity / Negative Option Clubs Rent-to-Buy Remittances / Wire Transfers Greater emphasis on pre-paid and debit cards The New Pioneers: Best Practices in Database Marketing 35 - May 8, 2008 Key Findings • Models/analytics are critical to leveraging data to find the right targets satisfying the necessary risk tolerances – Single source data will not be enough to gain sufficient lift – multiple data sources are needed for modeling • Data availability is evolving – Some data is very reliable and predictive but does not yet exist in sufficient quantities • Marketers are continuing to aggressively test data/solutions given the huge opportunities The New Pioneers: Best Practices in Database Marketing 36 - May 8, 2008 Thank you. John Carter, Ph.D. SVP, Analytical Services The New Pioneers: Best Practices in Database Marketing 37 - May 8, 2008 Questions? Best Practices in Database Marketing Michael Bloom – Datran Media John Princiotta – Publishers Clearing House John Carter – Equifax Marketing Services Moderator: JoAnne Monfradi Dunn – Alliant May 8, 2008