Chapter 19

Ten Resources for Information and Assistance

In This Chapter

Getting information about direct marketing best practices

Complying with privacy and opt-out legislation

Understanding where to get data and marketing services

Buying analytic tools

As you go about learning and applying the discipline of database marketing, you’ll at times feel somewhat overwhelmed by all the moving parts. The good news is that you’re not alone. There is a great deal of help available, if you know where to look for it.

In this chapter, I introduce you to some of the resources that are at your disposal. They range in nature from direct marketing best practices to the regulatory environment to software and services. I try to touch on the areas that are most likely to require some outside assistance.

Joining the Direct Marketing Association

The Direct Marketing Association, or DMA, is a non-profit organization that provides database marketing–related services and support to both consumers and businesses. If your company isn't already a member, you should strongly consider joining (www.thedma.org).

The DMA is the standard bearer for best practices in database marketing. It has a detailed set of policies and procedures that all members are expected to follow. These guidelines relate to all aspects of database marketing campaigns, from data privacy to the language used in marketing offers.

The DMA acts as an industry advocate in Washington. It lobbies for legislation that protects the rights of database marketers to use direct-marketing channels in a responsible and ethical way.

It’s also the keeper of several national opt-out registries. These registries allow consumers to request that they not be marketed to. The DMA actively enforces compliance with these requests among their business members.

The DMA provides you with several useful tools. It keeps you abreast of what’s happening with regulations that affect database marketers. In addition, it provides a steady stream of training and informational materials on new developments in the industry.

One key function of the DMA is to keep tabs on mail houses and other marketing service providers. It has a searchable database of vendors and marketing service providers that comply with its standards. Don’t ever use a vendor that isn’t on this list. If someone is selling database marketing services and doesn’t bother to join the DMA, then something is wrong.

DMA membership costs are based on your direct-marketing budget. It charges a small fraction of a percent of your overall annual expenditures. Most companies that do a lot of direct marketing find that just being able to say that they are compliant DMA members is worth the cost of membership.

Subscribing to Industry Publications

Practically all industries have journals, blogs, and websites that are targeted specifically at that business sector. These resources can help you stay abreast of the issues and trends affecting your industry. Many are free. But most business sectors have a couple of best-in-class publications that are considered must-reads for industry participants. A simple web search for publications in your industry sector will give you plenty of options to evaluate.

Using Census Data

You’ll frequently find yourself asking questions about the demographic makeup of various markets. You may be trying to get a sense of how big a given audience is. You may be trying to determine how deeply your penetration in a given market is.

One useful resource for answering these types of questions is the Census Bureau. Its website, www.census.gov, contains a wide array of data that can be viewed geographically. In addition to population data for the major metropolitan areas — data which is important to your advertising department — the Census Bureau also reports age and income data at various levels of summary.

Getting Familiar with the Post Office

If my mailbox is any indication, a huge portion of revenue taken in by the U.S. Postal Service is related to direct marketing. That motivates the USPS to keep direct marketers happy. It also motivates it to make processing direct mail as streamlined as possible.

The Postal Service web page, www.usps.com, contains a lot of information related to direct marketing, including links to publications outlining the address standards for bulk mail. It outlines in detail the advantages and costs associated with different methods of dealing with returned or undeliverable mail.

To avoid having to deal with large amounts of undeliverable mail, the USPS has strict standards for how bulk mail needs to be prepared. These standards relate not just to how addresses are formatted, but also involve matching the addresses to a standardized database of valid addresses. These standards are outlined in detail on the website.

You should know the process by which mail gets certified as complying with USPS standards. This is known as Coding Accuracy Support System (CASS) certification. CASS certification is necessary if you want to get bulk mail discounts. The way the post office does this is by evaluating the software and vendors that provide these services. It provides a list of certified vendors on its website.

Keeping Up with the Regulatory Environment

A variety of laws apply to your database marketing activity. Some of them revolve around privacy in some form or another. Some deal with the sharing of data. Others deal with honoring people’s requests not to be contacted. The DMA can keep you informed about what legislation is out there and how to comply. But I always like to find out what the people enforcing the laws have to say about them.

The regulations that are most broadly applicable to database marketing relate to e-mail (CANSPAM) and the national Do Not Call Registry. The Federal Trade Commission is responsible for enforcing regulations regarding spam. You can find the FTC's take on the subject on its website, www.ftc.gov. The Do Not Call Registry is maintained through the website www.donotcall.gov.

There are some other industry-specific laws governing the use of customer data. Fair lending and other laws specific to the financial industry can be investigated at www.fdic.gov and www.federalreserve.gov. Even if you don't work directly in the financial industry, some of these laws may still apply to you. Offering payment plans or other types of payment deferrals may constitute offers of credit, for example.

There are also laws regarding the way data is used in the health care industry. These laws apply narrowly to the health care sector, but they're the most restrictive privacy laws out there. The main law is HIPAA or the Health Insurance Portability and Accountability Act. The Department of Health and Human Services, more specifically its office of civil rights, is responsible for enforcing these regulations. You can investigate at www.hhs.gov.

The Children's Online Privacy Protection Act (COPPA) is full of potential land mines for marketers as well. This law is actively enforced, and more than a few companies have found themselves paying large fines without realizing they were in violation of this law. The law essentially requires websites to detail privacy policies and to make efforts to obtain parental permission before collecting data on children under the age of 13. But the law has nuances. It's important for you to understand COPPA in detail. The website www.coppa.org contains the detailed text of this law, along with information regarding compliance.

I discuss the issues of legal compliance related to privacy and unsubscribe requests in Chapters 3 and 4, respectively. I also talk about the legal environment related to mobile messaging in Chapter 13.

Hiring Direct-Marketing Service Providers

A lot goes into the details of executing a direct-mail campaign. To take advantage of bulk rates at the USPS, several technical functions need to be performed. Addresses need to meet formatting standards. Addresses also need to be verified as being valid, which requires the use of software certified by the Postal Service. And the mail needs to be physically sorted.

On the e-mail side, there is also a fair amount of technical work to be done. But with e-mail, a great deal of this work has to do with tracking what happens to the e-mail. Did it get delivered? Did the receiver mark it as spam? Did the receiver open it? Did the receiver click the link to your website? The list goes on.

Most companies don't perform the mechanics of campaign execution in-house. It's far more efficient to farm these functions out to companies that do them for a living. Because they're distributing the cost of their infrastructure across many clients, these companies can perform these functions far more cheaply than you ever could. When selecting a vendor or vendors to perform these tasks, use the DMA (www.thedma.org) as a resource to check credentials.

Buying Creative Services

Many companies also choose to farm out their creative development. If your company does TV advertising, you already have a relationship with an advertising agency that facilitates media purchases. These agencies are frequently part of a larger marketing services company. They typically have sister companies that provide creative services, from copywriting to graphic design, that are necessary for your database marketing campaigns.

The larger agencies also have relationships with a variety of related service providers. They routinely work with printers and mail houses. These relationships allow for a smooth transition from campaign development through execution.

Grouping Your Customer Records into Households

In Chapter 3, I discuss the importance of collecting customer records together into households. There are two main reasons for this:

Much of the demographic data that you use is only available at the household level.

Your marketing campaigns are typically targeted at households rather than individuals. It usually doesn’t make sense to send multiple copies of a message to the same address.

Most companies choose to purchase householding services from a third party. The advantage is that the vendors that perform these services have access to a vast amount of data that you don’t have. Another advantage is that address updates and standardization are a core part of this process.

Householding can be performed in large batches. You can send your entire database of customers out annually or biannually to be scrubbed and householded. But most of these vendors actually allow you to submit small numbers of new customers daily, or even in real time, to be scrubbed and householded before you even add them to your database.

A few vendors out there have huge databases that essentially contain every household and address in the country. I've had positive experiences with three really big players in this space: Acxiom (www.acxiom.com), Epsilon (www.epsilon.com), and Merkle (www.merkleinc.com).

Third-Party Data Providers

To enhance the data that you collect in-house, you’ll likely want to consider buying data from an external source. A wide range of demographic data is available that you’ll likely never be able to get from your internal data sources.

The data you can buy falls into two general categories. The first is data that’s tied to individual households. A fair amount of data has been compiled from a variety of sources, including public records. Home value, or at least the last sales price, is public record data, for example.

But data providers also have access to a large amount of data that’s protected by privacy regulations and corporate privacy policies. Vendors can’t provide this data to you at an individual household level. What they do instead is analyze their data with a view to creating small segments of customers that have similar traits. In other words, they use the data they have to identify groups of customers who share very similar demographic traits, product tastes and needs, and even psychological attitudes.

Even though they can’t share the data they have on individuals, they can tell you which one of their segments each one of your customers falls into. This combined with a detailed description of the segment makes for a very useful marketing tool.

In the previous section, I mention providers of householding services —Acxiom, Epsilon, and Merkle. As it turns out, these companies also sell a broad array of demographic and customer segmentation data. The major credit bureaus have also jumped into the space of providing marketing services. The data they provide is primarily consumer-segmentation data. Those agencies are Equifax (www.equifax.com), Experian (www.experian.com), and TransUnion (www.transunion.com).

When evaluating data vendors, be aware that they can typically customize the data that you purchase. You can often purchase data a la carte, depending on what’s most relevant to your business. They also can create customized segments that take into account your customers’ purchase patterns. In any case, it’s a good idea to press for some kind of proof of concept before making a large investment in demographic data.

Analytic Software

Throughout this book, I talk about the role of data analysis in database marketing. Some of this analysis can be done with basic reporting tools and spreadsheets. But some of it requires an advanced knowledge of statistics—and software that can perform advanced statistical procedures on large amounts of data.

The phrases marketing analytics and marketing analytic software are used in a variety of contexts. When I use them, I mean statistical analysis. But these phrases also pop up when it comes to doing web analytics and website traffic analysis. And they’re also used in the context of producing consolidated marketing performance reports, known as dashboards.

I briefly address web analytics in Chapter 13. But a detailed discussion of either web analytics or dashboard reporting is far beyond the scope of this book. Luckily, each subject has a For Dummies book all to itself.

In the context of statistical analysis, a couple of software packages are commonly used in the marketing industry:

SPSS: Now owned by IBM, this software package has been a marketing industry standard since it first became available in the 1970s. Its widespread use in marketing applications began in the context of analyzing survey data and other marketing research applications.

SAS: I think I’ve used SAS in every job I’ve ever had since college. SAS is actually a large software company that offers numerous data processing, analysis, reporting, and statistical tools. Many of SAS’s products are customized to specific business applications, such as database marketing.

Neither SPSS nor SAS is particularly cheap. But they both have extensive capabilities. And in both cases, the vendors can provide you with training and support. They also provide consulting services in case you need to farm out your more advanced analytic projects.