Editor's Note: This is a multi-part set of articles from the faculty of The Bennett Group's Mailing Training Institute. The first article deals with getting databases cleaned up. The second article, coming in the November-December issue, will be on mailpiece design.
The recently published 2006 Database Practices Survey in Direct Magazine purports that marketers will spend an average of $250,000 on database improvements this year alone. The survey further states that among those planning such improvements, 70% will install or enhance data mining capabilities, 40% plan to expand storage capacity and nearly 20% plan to add a data mart or outsource the project. No mention is made of funding to maintain or improve data quality.
Ironically, about two-thirds of the survey respondents speak to the value of personalization and intentions to fund such efforts at equal or greater levels than last year. But not a nickel's worth of funding mentioned to assure such individualization reaches its targeted destinations when using the direct mail medium. Oversight? Yes. Intended oversight? No.
The reality is direct mail managers fail to speak effectively to their marketing colleagues. They don't convey their perspective of the return on investment (ROI) impact that clean, accurate, deliverable mail brings to the bottom line. To put it another way, most direct mail specialists fail to convey the cost burden and lost revenue impact of non-delivered and returned mail.
This declaration is not to proclaim matters to be in a hopeless state. To the contrary, this same survey goes on to identify that 31% of database departments have increased their staff levels. And workers aren't the only investment. Close to 40% of survey responders expect to spend more on developing or maintaining their systems in 2007, and over 50% of them foresee an increase in their general direct marketing budgets.
It is clearly time for direct mail professionals to stand up and be accounted for in deliberations on the betterment of their company sales and operational performance. To stay sequestered in the mail center is no longer an option. To stay quiet and let others speak on performance and direct marketing campaign improvements is no longer an option.
Direct mail specialists have an obligation to speak perceptively on matters relating to the performance of this important medium. After all, who better to define the cost impact undeliverable mail has on operational overhead? Who better to identify lost
revenue opportunities due to inadequate database management procedures?
Two events illustrate how the industry is forcing reluctant direct marketing professionals to enter into dialogue with their marketing, information technology and financial colleagues. First, the latest CASS cycle brings a whole new dimension of front-end data cleansing capability with the inclusion of the Postal Service's Delivery Point Validation (DPV) dataset. DPV requires careful review be given to the selection of which data elements to use for suppression purposes for a given mailing program.
Two examples illustrate the need for such dialogue: Commercial Mail Receptacle Agents (CMRA), which are storefront box locations often used as suite numbers or fictitious post office boxes. The other is a set of codes that inform the mailer the address lacks a specific location such as house or box number. The former may be selected as a suppressor in prospect mailings because of notoriously low response rates but be retained in the mailing file for proprietary mailings. The latter should be suppressed in all cases because it is considered undeliverable. If mailed First-Class, it will be returned; if mailed Standard, it will be disposed. Either way, it is a cost to be avoided. It is responsibility of the direct mail manager to see that database management standard operating procedures incorporate data cleansing options. It is not the responsibility of the marketing manager or the IT manager.
Another way the industry is forcing internal dialogue between marketers and DM professionals is the mail improvement initiatives currently being taken by the USPS. Postmaster General John Potter has challenged the industry with a new mail delivery quality standard: reduce undeliverable as addressed (UAA) mail by 50% before 2010. To appreciate the force of that challenge, one needs to recognize the present problem in terms of volume and cost and how UAA mail has evolved over time.
The USPS either returns to sender or trashes approximately six billion pieces of UAA mail each year. This costs the Postal Service, in round numbers, $2 billion annually. What mailers fail to understand is that their cost is · closer to $8 billion annually in terms of wasted lists, materials, labor and postage expense coupled with lost sales related directly to undeliverable mail.
As Christopher Lien, Director of Commercial Mail Marketing for Business Objects, so eloquently stated in his recent DM News article, "Reducing UAA Mail Means Change for Mailers," "One could argue that UAA mail is the true definition of 'junk mail.'" This lucid point becomes a third reason why direct mail professionals must come forth and be heard. No one wants to be associated with or labeled as a purveyor of junk mail. And yet internal company fingers of accusation point singularly to the mail department when a campaign fails. The marketing department exonerates itself (blame the list vendor) as does the IT department (all we did was produce the list), leaving the stigma on the mail producers who all too often have little or no say over quality. Does that make sense? Does that not demand the mail manager speak out?
Lest the reader believe that this chasm in communication exists only in the "less sophisticated" or beyond the Fortune 1,000 think again. Based on first-hand knowledge, this communications problem which means equal sharing and listening among departments prevails more often than not. For example, Peter B. Glenn, a now retired, well-respected direct mail guru recognized by the industry and Postal Service alike, often said, "Listen to what the data has to tell." It is the direct mail professional who is best qualified to read results and understand the message. Unfortunately, the larger the corporation, the more difficult it is to communicate or affect change. This reality is further exacerbated by mail managers who are reluctant or forbidden to present the information which offers the ability to institute cost-saving measures and means to increase response rates.
A major reason for this communications impediment is corporate culture. Direct mail historically has been positioned layers below the Chief Marketing, Information and Financial Officer positions on the corporate organizational chart. This is considered a terrible disservice to the Chief Operating Officer who is charged with the efficient operation of the company.
A compelling argument can be made to elevate a direct mail professional to an equal plane with his marketing, information technology and financial colleagues. Particularly in this new era where, on one hand, postage increases are becoming an annual increase in expense, and on the other hand, postal cleansing tools better identify corrupt data at speeds that enable astute mailers to update and improve files just before each mailing event.
Direct mail is a business discipline and needs to be recognized for its impact to the bottom line performance of a company's operations and growth. Educational programs abound through recognized industry associations like the Direct Marketing Association that provide hands-on knowledge of how to improve performance and avoid waste. Reliance on one's experience is the present means by which the direct mail specialist becomes a competent conveyor of the medium's potential to her management colleagues. As good as it may be, the "school of hard knocks" needs to be replaced with a new echelon of education that provides more formal training for the profession.
The direct mail medium needs knowledgeable, experienced representatives to help formulate database management standard operating procedures. Full management collaboration across all relevant business disciplines will result in greater stewardship of the direct marketing budget from allocation to execution.
Robert Swick is Principal of Address Management Solutions, Inc., a provider of USPS and proprietary address quality services. Contact him at 727-733-2822 or visit www.CleanMailProgram.com. For additional information about The Bennett Group, Inc. and the Mailing Training Institute, call 877-743-3379 or please visit the company's website at www.the-bennett-group.com