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Though definitive results from the initial tests of its cooperative database for
"bill-me" marketers won't be in for a while, Alliant
Cooperative Data Solutions already plans to add features and participants
to the database.
TransactionBase was conceived not only as a risk
management tool to identify and eliminate questionable or bad payers from
mailings, but also as a way to identify good prospects for bill-me
mailers.
Bill-me direct marketers
include magazine publishers; continuity and club marketers; single-shot
book, CD or video marketers; catalog marketers and merchandise marketers;
or any marketer that lets customers buy now and pay later.
The database contains five years of transaction and
payment history from its nine charter contributors. Those clients are the
anchors of the database: BMG Music Service, Bookspan -- Doubleday Book
Club, Bookspan -- Book of the Month Club, International Masters
Publishers, National Geographic Society, Oxmoor House, Publishers
Clearing House, Reader's Digest and Southern Progress.
Nearly three years after its inception in August 2001,
TransactionBase was ready for testing
in early July following the arduous process of collecting the data,
building the database and readying it for use.
"It took us a full eight months longer than we
expected to finish the database," said JoAnne Monfradi Dunn, CEO of
Alliant Cooperative Data Solutions LLC, Brewster, NY. "It was a huge project and
much more complex than we expected but here we are in production with a
product that actually exceeded our expectations and hopefully will exceed
the clients' as well."
Leading up to the launch, the first build of the
database was completed in December 2003. It was a static five-year view
of customer performance across the participants' databases.
"The analytical team used that database to build
what we call 'Proof of Concept' models for all of our contributors,"
Dunn said. "While that was happening, the development team was
building the update facility for the database as well as our production
environment."
The models were tested
blind against participants' historical campaign data to prove the
database's predictive power.
Alliant began running its first live jobs for clients
in early July. Some have started testing
already, and others are preparing to start soon. One such client is
Reader's Digest.
"We have not tested
anything live yet but we've looked at the models, and we are now at the
stage of devising our live testing
strategy," said Kari Regan, vice president of database marketing
services at Reader's Digest Association Inc., Pleasantville, NY.
"At the Alliant client advisory board meeting in June we saw some
very encouraging results. The companies weren't identified but we saw
some gains charts on some modeling results that looked good."
Reader's Digest will test
the database for customer acquisition direct mail, she said. It could
take 10 months to a year to understand the database's effect.
"It does take us a long time to understand the
full value of a service like this," she said. "We're intrigued
and hopeful that this is going to work very well."
Alliant is not sitting back and waiting for results.
While current uses of the database include list screening of prospecting
files, order screening of incoming consumers and identification of upsell
and cross-sell opportunities on house file names, other solutions are in
the works. Alliant hopes to have a real-time Web order screening process
in place by the fourth quarter of this year.
"On the Web, many marketers had to hedge their
bets and move away from bill-me offers due to really poor pay-up,"
Dunn said. "With a real-time tool, they would still be able to offer
the bill-me option to reliable consumers."
Alliant can screen Internet orders in batch.
The firm also is looking to expand the database and is
talking with potential contributors, hoping to add at least six in the
next 12 months, Dunn said.
Another possible growth area would be through
partnerships with the list industry.
"We have been having some early stage
conversations with some folks in the list industry in terms of how
Alliant can partner with the list brokerage and list management community
to more effectively work with mailers and list owners to mine databases
using some of our solutions," Dunn said.
However, she stressed that Alliant does not sell
mailing lists and cannot use the data unless it is for a credit-based
offer because the database is regulated by the Fair Credit Reporting Act.
One list industry professional said the talks were in
very preliminary stages because of the database's complexity but that she
was open to the possibilities.
"The database is just incredible as far as I'm
concerned, and from a marketing perspective there may be opportunities to
help other marketers do things like identify pockets of outside lists
that they can mail profitably," said Rosemarie Montroy, chief
marketing officer at Direct Media Inc., Greenwich, CT.
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