Download How Marketers are Utilizing Databases to Target Best Customers

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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