Sweetening the Pot

Posted on by Chief Marketer Staff

It’s been said by everyone from Don Peppers to Fred Reichheld: Customer satisfaction starts with a company’s employees.

But how do you make sure that your staff fully supports your objectives?

There’s one way.

Incentives.

Yes. Companies of all types are using incentives to motivate employees, above and beyond bonus compensation.

Almost all surveys show that this practice is growing. But many firms aren’t measuring return on investment. And when they do, they’re often unhappy with the result.

It could be that they don’t know what they’re doing. Or maybe they’re getting bogged down in corporate turf wars.

Many people have opinions on this, but only a few of these thinkers really count. One is Don Schultz, professor emeritus-in-service at Northwestern University’s Medill School of Journalism.

Schultz feels that incentives are an element of internal marketing, the science of getting employees to buy into

Sweetening the Pot

Posted on by Chief Marketer Staff

Publishing files, once the most basic of lists, are now being offered to mailers with a variety of bells and whistles, including modeling, regression analysis and file enhancements. The reason? That’s what it takes to get a list rented in an ever more competitive market.

For example, 40% of the list orders placed with Time Inc. are accompanied by requests for modeling services, says Christine Slusarek, director of list management for the New York-based publisher.

Most publishers will find that level rising as mailers get more demanding.

“The trend is just beginning,” says Fran Green, executive vice president of American List Counsel Inc. (ALC), Princeton, NJ. “More and more mailers are beginning to recognize the value of modeling.”

Most of the big publishers, including Hearst Magazines, Meredith Corp., Time, Rodale Press and Times Mirror offer modeling, says Richard Vergara, vice president, list brokerage for Stevens-Knox & Associates, New York. So does Book-of-the-Month Club, whose 2.5-million-name file is managed by ALC.

These tools also help a mailer target more effectively-and expand its universe. Guideposts, Carmel, NY, saw its own mail volume increase 900% over the last six years with the help of regression analysis, says senior acquisition manager Evan Balzer.

By matching the profile of the typical Guideposts customer-a church-going woman in her mid-50s residing in the South and Midwest-to a variety of rented files, the publisher was able to broadly expand its market from one that had been strictly religious into a secular universe. Up to 60% of the new prospects were selected through regression analysis of rented files, Balzer notes.

These services are especially helpful to smaller mailers, who may not have the capability to do their own models, Vergara adds.

What does modeling cost the mailer? It can vary. Hearst offers modeling as a free service if a minimum of 50,000 names are mailed. ALC charges a “nominal up-front fee” of $2,500 on its Book-of-the-Month Club file, while others may impose a surcharge amounting to as much as $10 to $20 per 1,000 names.

But, cautions Balzer, modeling is not for everybody. “People have to do some homework before they just jump in and model a file,” he says. “Regression is not a miracle cure, it’s never going to make a bad list good. It will give a marginal list a lift, but a bad list is a bad list.”

Models can differ in quality, depending on the data, the statistician and who’s going to score the model.

“It’s a skill. It’s an art form,” Balzer says.

Brian Kurtz, vice president of marketing for Boardroom Inc., Greenwich, CT, agrees. “If you have people building the model who don’t know what they’re doing, you put yourself in the position of wasting a lot of time and money.”

Some list companies, like Acxiom/Direct Media, Greenwich, CT, and Novus Marketing, Tarrytown, NY, employ statisticians, while others rely on outside service providers.

To achieve success with modeling, Balzer suggests working with a universe of more than 1 million names to generate a minimum of 100,000 mailable names. And one way to do that, particularly if you are a small mailer, is to participate in a cooperative database.

Enhancements are another way to spice up a publishing file and open the door to a variety of mailers, Vergara notes. “It gets mailers into universes that they otherwise would not be able to mail without that type of analysis.”

Golf Magazine, for example, was able to tap into Boardroom’s files after the publisher enhanced its list with a golfer’s select, Vergara notes.

And after TV Guide applied demographic and lifestyle enhancements to the already popular file, using data supplied by Experian’s InSource and in-house modeling capabilities, “the thing is blowing out the door,” says Monica Smith, executive vice president, list management for Novus Marketing, which manages the file. “They are using their list as a revenue opportunity and a revenue stream and they are doing whatever it takes,” she says.

At Acxiom/Direct Media, one person was hired in 1993 to handle all the enhanced files. Since then, sales in that area have increased 140%, says Rosemarie Montroy, business unit leader. “People are looking for new lists.”

ALC is “recommending enhancements to the vast majority of our publishing list owners,” adds Green.

File enhancements that used to cost “upward of $10,000” are now much more affordable. ALC negotiates with its data providers to enhance files with no up-front charge. The data is paid for as used, on a royalty basis. “It is virtually a risk-free venture for our list owner,” Green says.

Why enhance files at all? You have to in an era of expanding product lines and publishing mega-mergers that combine many product categories, says Tim Barlow, president of The Lake Group. “It’s a multiproduct, multitype environment and that’s what brought about the need for these file-enhancement and file-segmentation tools,” he explains.

Those enhancements, along with price incentives and opportunities for predictive and response modeling, have also attracted catalogers, which now comprise 25% of The Lake Group’s publishing rental business, Barlow says. Time has increased its list rental revenue an average $500,000 per year by offering enhancements, Slusarek notes. “By far the most popular selects are adult age and presence of children in the home,” she says.

Over the past year, Time has appended names with catalog purchase information through Abacus Alliance and Experian/Direct Tech’s Z-24 co-op database, “so catalogers can use publishing files a little bit better,” Slusarek says.

Of course, list owners and managers also have to provide price incentives in such a tough rental market.

Tom Rocco, vice president of marketing services for Rodale Press, Emmaus, PA, says he has witnessed a “continued acceleration” in publishing list negotiations. (The Rodale files are managed by Acxiom/Direct Media.)

Mailers, eager to reduce costs while maintaining list quality, are requesting line-by-line net-name discounts, lower base prices, reduced run charges and other sweeteners, Rocco says. “Some people will try to hit you from all directions.”

Rocco adds: “The list business is complicated enough.” He recommends getting back to basics-“How many names for how much money.”

Negotiations can vary by customer but all have to be well thought out. For example, it’s difficult to determine pricing for a one-shot mailing like a big credit card offer.

“We’re not just going to give away our list for a fast buck,” Rocco emphasizes, “but we recognize in some cases that this is money that’s incremental to us because that’s the kind of deal that can come up out of the blue.”

TransAmerica Files Go to Mokrynski TransAmerica Holdings LLC, Cleveland, planned at deadline to consolidate its files-a total of 1.5 million names-with Mokrynski & Associates Inc., Hackensack, NJ, effective July 1.

Acxiom/Direct Media, Greenwich, CT, had managed the 350,000-name Beauty Boutique file and Bundle of Joy lists (a total of 50,000 names), while Novus Marketing of Tarrytown, NY managed the 500,000-name Anthony Richards, 260,000-name Healthy Living, 110,000-name Windsor Collection and 240,000-name TransAmerica Space files.

“We wanted to consolidate the management of all the files with one manager,” said TransAmerica senior vice president of marketing Diane Huzar.

Huzar had served Mokrynski & Associates as vice president and sales director of list management until her resignation April 30. She accepted the TransAmerica position May 18.

After TransAmerica notified Acxiom/ Direct Media of the change, Novus Marketing resigned management of its four files May 26.

“This decision resulted from our recognition of a change in management and that the direction of both Novus Marketing and TransAmerica would no longer result in a beneficial partnership,” said Joanne Capria, president of Novus Marketing List Management.

West Group Takes Prof’l. DB Off Market West Group, Eagan, MN, said in June that it would take its 1.4 million-name West Group Professional database off the market, effective July 3. Most of the file names attorneys at home address. It’s managed by The Lake Group, Rye, NY.

CMP Names New List Mgr. CMP Media Inc. has picked Database Marketing Concepts, Bohemia, NY, as manager of several high-tech publication mailing lists and databases, effective July 1. The lists name 1.7 million business technology builders, sellers and users and 1.3 million home users.

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