Database Services Outsourcing
Outsourcing Services For Your Mailing Campaign
Download PDF file
Professionals say that your house list is your most important business asset. It's been proved to be true time and time again. Experts will tell you the best response a typical mailing can be expected to achieve is around 4% to 4.5% (1% to 1.5% is still an acceptable return - especially if the offer is high-priced). But, when all is said and done 2% remains the anticipated average return of a successful mailing.
But, here's the bottom line: these response averages increase roughly eight times by mailing to your own list! This is for several reasons, not the least of which is that your customers know you and, more important, they feel that you know and care about them.
Computer service bureaus are a little like list HMO's, complete with data doctors. They understand how hard it is to establish and maintain a strong, healthy mailing list and can help you with your list's creation, maintenance and growth. Good service bureaus will also lend their experience in helping you make difficult - crucial - strategic and tactical list decisions.
A better way to put it might be this: A computer service bureau is a company that will perform all of the computer tasks that you either can't or don't want to do. While you may have all the information you need to set up your house list on your own computer, you still may prefer to use a service bureau because:
They work closely with the USPS and will know all the latest requirements and conditions for getting the most out of your mailing list (they change all the time). Their knowledge will facilitate your mailings - making them run smoothly through the postal system insuring faster, more accurate delivery.
They can help you save hundreds of dollars in previously wasted postage by postal encoding. It is only when a list is correctly encoded that it can qualify for significant postage discounts. The USPS requires that carrier routes and ZIP+4's be updated every quarter, when the USPS National Database is issued. It may well be more expensive to purchase and update the software needed to do this than to have it done for you.
Industry mailers will tell you that if only 20% of your list contains bad addresses you're doing better that most. More realistic estimates say that about 30% of your list's addresses are no good - in many instances the percentage is much higher. For every 1,000 pieces of mail you send, 200 to 400 may never arrive at their destination. When CASS Certified software can't apply a ZIP+4 number to an address, it's a flag that something is wrong with that address and needs correction.
By helping you to qualify for participation in useful US Postal Service programs, a service bureau can save you additional money. Implementing the Automated Address Change Service and NCOA systems in your list management procedures is complicated, but saves a lot of money spent sending mail to recipients who are no longer there. They can help you find where your break-even point occurs - to determine if your probable response will support your offer. A break-even point is expressed in how many responses will be needed to break even with your mailing costs. This is always figured against your net profit per order (or net donation) and national response averages. If your break-even point requires a much higher percentage of return than the national numbers say you can reasonably expect, your mailing is in trouble - before you even begin. Finding this out well in advance of the actual mailing will enable you to adjust the offer's parameters, bringing your mailing strategy back into focus. It's how the pros do it - and so should you.
A list service can point out ways to make your database move in the right direction to achieve your marketing goals. Most service bureaus have good connections with many list brokers and compilers that can help you in this area as well.
By using sophisticated software and specialized techniques, they can also keep your list "duplicate free" (often as high as 98%+).
Service Bureaus also receive magnetic media from many different sources, in many different forms and converts it to a common format. They can also take your data and translate it into the formats needed by others for processing (i.e. NCOA, ACS, etc.), or use for their mailings.
Additionally, they may produce personalized letters and other special or exotic effects that are impossible or impractical for you to perform in house.
Data Entry:
The first step in creating a good mailing list is accurate, consistent data entry. Precise entry of your information can make your mailing list. Bad, careless or sloppy data entry can critically compromise it, costing you a fortune - both now and in the future. Your single largest mailing list cost is normally the initial design, creation and establishment of a new list. For this reason, it is essential that your data is entered, edited when necessary, so that it conforms to US Postal Service addressing equirements and information industry standards.
List Brokerage:
New mailing lists may be rented (for test mailings) or purchased (for direct inclusion into your existing list). This will increase and focus your direct mailing effort's performance. Adding new records to your list electronically is called "Merging" and is a good way to enlarge your list with people or businesses consistent with your current customer profile. This is a profile of your archetypal customer or donor - a composite of the important market characteristics which all of your current customers ommonly share. In other words, names and addresses of people who are very much like those already doing business with you now. Basic criteria for defining lists include eographic (where people live or work), demographic (how people live or work - number of children, age, income, etc.) and psychographic (how people think - attitudes and habit patterns). Additionally, your new list might require more specific targeting information, such as: hobbies, sports interest(s), preferred foods or wines, environmental concerns, donation history, etc. The possibilities for defining your perfect list are almost endless.
Update Lists:
Once a great list has been created, it must be maintained and regularly updated to stay great. Lists steadily deteriorate from the moment they're started. People and businesses move at an average rate of 10% to 15% per year. In areas plagued with natural disasters or severe economic swings, this figure can be much greater. Records (each record is a single name and address) which are no longer deliverable or desirable to mail must be removed. Address changes must be kept current for your mail to arrive at the correct destination rather than being discarded by the Post Office. USPS regulation allows incorrectly addressed bulk mail to be discarded, unless specifically stated otherwise, on each piece, by the mailer. Duplicate records need to be removed if each individual is to receive only one piece of mail. USPS regulations require your list to be postal coded quarterly, with USPS-certified software, if you are going to take advantage of USPS postage discounts.
CASS Certified Postal Coding:
In order to insure the success of mail automation, the USPS initiated the CASS (Coding Accuracy Support System) requirements and certification. Postal coding a list not only reduces your per piece postage by as much as 62%, but also insures consistency and deliverability of the addresses in your list. CASS processing of your list includes: verification of the 5 digit Zip Code, standardizes the address information, adds the +4 Zip Code extension and the carrier route designation. Address and 5-Digit Zip standardization also make it possible to isolate duplicate records more accurately. Barcoding for increased delivery speed and greatly reduced postage, for example, requires a current, CASS Certified ZIP+4 extension on at least 85% of your list's records.
Address Change Service:
The USPS ACS (Address Change Service) can help you keep your list up-to-date by returning mail which the Post Office can't deliver as addressed. Reasons why mail is undeliverable include: the recipient moved and left no forwarding address (MLNA's), the recipient has moved and left a forwarding address (provided by the Post Office on ach returned piece), the address is nonexistent or written wrongly (these pieces are colorfully called Nixies), etc. Your list can be manually updated from these returns, or it can be done electronically at a much lower cost. The USPS offers address corrections on magnetic media - for posting address corrections directly to your list. Not only does this option reduce your time to only 10% of what updating by hand typically requires, but will also reduce your return postage by 40% - or more. If you mail seriously, you need to use this system regularly whenever you mail.
National Change of Address System:
The NCOA (National Change Of Address) system is a way of updating your list in one operation. Drawing from the same USPS Address Change Database that is created and maintained by the Address Change Service in Memphis, addresses gong back as far as 18 months can be marked, corrected or removed from your list. Which of these services should you use? If you have been using a list that is current and want to keep it that way, use the ACS system - every time you mail. If your list hasn't been updated recently, or t's a new list you're not completely familiar with, use the NCOA system to prepare it for your initial mailing.
Duplication Detection:
There is no surer way of showing a customer or donor that your business is inept at or unconcerned with keeping accurate information than by sending two, three or more mailing pieces to the same address. As any list matures with use, it accumulates duplicate records. Exact Duplicates are records that contain exactly the same information about the recipient and are easy to isolate. Near Duplicates are much more elusive. Near Duplicates are records that contain the same recipient but have not been entered in quite the same way. This happens when one record has an initial for the first name and the other has the first name spelled out, when one record is correct and the other contains a "typo" or two, when the name in one record is spelled one way ("Anderson") in one record and another way ("Andersen") in another; and so forth. All lists develop these duplicate records unless they are carefully and regularly cleaned with software specially developed for just this purpose.
Reports:
Ignorance may be bliss, but it's not good business. Information will not empower your company if it can't be accessed and, more important, understood. The most common type of report lists your records in any sequence you desire. Galley Reports (all records listed - commonly in last name-first name order) and Sub-headed or Grouped Reports (records are sorted into groups and printed under group subheadings) are the most frequently found. Some reports are designed for verification and list maintenance:
USPS postal presort reports, postal verification reports and CASS Certification Reports are used to facilitate and expedite bulk mailings. They also are necessary to obtain the lowest postage rates.
Duplication Reports, Frequency Reports and Summary Reports all tell you what's going on inside your database. These reports can save you thousands of dollars in wasted postage, pointless mailing expense and list deterioration.
Profile Reports are windows to your data that will reveal the patterns and unique habits that are common links between your current customers or donors. Once these patterns are recognized - and defined - a "Profile" of your most desirable prospects can be developed. It now becomes possible to directly contact the individuals with the greatest potential for becoming your next customers.
Mailing Projection and Response Tracking Reports are the professional mailer's way of minimizing risk and maximizing return while testing for new market opportunities. successful direct mail is fueled by accurate information based on actual results. Guessing and assumption are the surest ways to commit direct mail suicide and literally throw your money away.
Labels:
Labels produced for bulk mailing can take a variety of forms and format. In general the ideal mailing label includes the following:
An Optional Endorsement Line which tells the level of postal discount for which this piece of mail qualifies. Ideally, an ACS customer ID number should appear in the first several characters of the first line.
The second line should have an ACS-approved Key Line Code (a unique identifier for your internal use).
A USPS Postnet Barcode (even if the piece isn't automation-qualified, it will help to move the piece through the mail much faster - putting your message in your customer's hands much sooner.
The next few lines should have, respectively: the person's name, the company name (if applicable), the address line (or the secondary address line - if there are two), primary address line (if there are two), the city, state and Zip.
Labels are output in USPS postal presort order to simplify the physical processing and reduce production costs.
Labels are usually printed in Cheshire Label format (plain paper labels which are applied by machine - used in larger mailings) or Pressure Sensitive format (familiar "Peel and Stick" labels - most often used in mailings of less that 3,000 pieces). Direct impression Printing (printing an address directly onto an envelope is another form of labeling which is used when a more distinctive look is desired). It's a more expensive way to go, but the good impression created and the increased response produced makes this an option worth considering.
Ink-Jet addressing sprays the address (and other, optional information) directly onto your mailing piece, envelope or catalog. These addressing system can easily process several thousand pieces per hour at a reasonable cost. This kind of addressing is ideal for oversized or unusually thick mailing pieces.
Data - Media Conversion:
There will come a time when you will need to bring new data into your mailing list. Perhaps it consists of a purchased list or a list from another department or branch of your own company.
Conversely, there will also probably come a time when you need to take data out of your database and put it on some form of electronic media; diskettes, CD ROM/DVD, or over the Internet. Most often, this is done for impact addressing, personalized laser letters or data conditioning (i.e. postal coding by an outside service).
Any database program that you use has essentially two parts to it. The first consists of all the files that make up the programming portion of the software. These files contain all the instructions to manipulate, sort and arrange data, output it to reports, labels and letters, etc. The other part is the files that hold the data itself and indexes for faster information retrieval and handling.
In order for this to happen, the program will infuse the data and index files with programming information that the database can understand. Since different programmers rarely do things the same way, it should be apparent that one database will almost never read and handle the data and index files of another DBMS (Data Base Management System) program.
This problem was occurring back before personal computers came into general use. The answer was found in the ASCII (American Standard Code for Information Interchange - pronounced: ass·keý) developed years ago. The premise is simple: strip all the programming and control characters out of the file and just leave the data (that's why ASCII files are sometimes called "text files"). Any true database program should be able to Import (bring data in from) and Export (send data out to) an ASCII file.
Consultation, Training and Support:
Even though it may always be more cost-effective to outsource some list operations, it's likely that, at some point, you will want to bring more of your list management back in house. It also makes sense that you will want to bring a service bureau's level of skill to that end, when you do. Effective list maintenance is strictly a matter of the right software matched with sound list management techniques. Responsible list specialists typically offer their clients consultation, training and support. Consultation is the act of determining your direct mail requirements and needs, then defining, developing and implementing an appropriate, practical solution. Training, while often a part of the overall consulting process, concentrates on teaching in house personnel what they need to know to be successful in keeping your list on-track. Support is that function which follows any successful consultation and enables it to "stick." When support is no longer needed, this important transition is now complete.