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They May Have Already Won

By Jun 01, 2008

When a channel that provides 20% of an industry’s buyers has been weakened, there are three options: It can fold, limp along or innovate.

This is what consumer magazine publishers faced when sweepstakes mailers like American Family Publishers were curtailed years ago by regulators. By some estimates, sweeps packages were bringing in up to 70 million of the 300 million subscriptions sold annually in the United States. Then it all but ended.

That called for some creative thinking. And mailers got it when a combined co-op database and mailer were created by Subscription Partners LLC and Integrated Marketing Technology Inc. (IMT). Last year it took the platinum award from the National Center for Database Marketing.

“In putting this database together, we’ve become a subscription agent,” says IMT president Jim Tucker. “But instead of relying on sweepstakes, we rely on database marketing principles.”

At first glance, the Subscription Partners cooperative database seems similar to Experian’s CircBase. During the initial one-year test phase that started last June, 140 magazines kicked in 21.3 million names (some 42 million subscriptions).

But the publishers don’t receive lists of prospect names. Instead, Subscription Partners sends out solicitations on their behalf in a co-op-style envelope.

All of this would amount to one big yawn were it not for the tailoring that goes into every package. The mailings are personalized, and each one offers magazines from a variety of publishers.

These solicitations are based on what consumers have ordered in the past. Sub terms can be short or long, discount driven, or full price.

A recipient may find from five to 25 different offers in the envelope. Tests have shown that non-sweeps packages work better than sweeps. But the partners have not given up on the latter.

Targeting is based on RFM, lifetime value, credit and payment history, and other factors. In a twist, magazines can reach subscribers to competitive books as well.

“When you’re building response models, the most predictive variables are transaction variables,” Tucker says. “They’re much more predictive than demographic or lifestyle data. We can’t just have a basic segmentation — everybody who’s direct mail-sold in the last 30 days will get this. We’re trying to ask ‘What specific magazine will Jim Tucker want?’ ”

And yes, the firms are using appended census, lifestyle and demographic data. “That stuff is important,” Tucker says. “But the most predictive data is what people did and less so who they are. When we build models, we have hundreds of pieces of data that go into them, but the top 20 most important are almost always transaction variables.”

The database is now open only to consumer magazines. Tucker wants to refine the program before deciding whether to include business-to-business publications.

For more CRM and database marketing material, go to http://directmag.com/disciplines/crm/.