Case Studies

Why invest in data..


The Postal Preferrence Service UK

The Interessebank Denmark.

The future of direct marketing is data driven…
Now is the time to take your place in the driving seat

Let’s assume you have the basics right. You offer reliable postal delivery at
a fair price.

You offer consumers value added services that satisfy real consumer needs
and deliver profit.

To achieve this you have mobilized the efforts of thousands of people and developed
systems that are the envy of many businesses around the world.

As in any business, you need to decide where to invest and focus the
energies of your organization in the future.

The challenge is to allocate resources where the need for improvement is greatest and the return on investment is highest. Strategic success is
built on over-investing in high potential and ruthlessly cutting waste.

To get more results from your investments, while providing better
advertiser and consumer service, you should be considering
investing in consumer data programs. 

Sometimes the most obvious is hardest to see

While researching this paper we downloaded over 150 presentations made at
Postal Conferences and read the annual reports of a dozen Postal Services.

Even though it is a key business driver, the references found to data development were
few and far between.

It seems no one wants to talk about data- for many it’s a dirty word.

But for advertisers data is what drives direct mail. They spend a lot of time
and money on creative work and strategy, but the final decision on the
number of mailings is based on the data available. 

Data drives profitable mail volumes. Advertisers start with the number of addresses/
consumers available to contact to determine how many mailings are printed and how
many are sent.

Data drives direct mail and mail volumes  

New data is needed to drive growth
More developed markets
In the more developed postal markets direct mail has grown year by year. What
many do not realize is that for many companies the biggest driver of mail growth
is not better and better profitability, but falling results. They need to mail more
each year to get the same level of business.

No industry can be built on reluctant customers, buying more because they have
to. What advertisers don’t need, is another compiled list or mail order response file.

They need new data. New data matching consumer interests and advertiser
needs is the way forward. One type of data with particular promise is preference
data where information on consumer interests are collected over a broad range
of categories.

A study by the US Postal Service showed that each response to a direct mail advertisement
can generate as much as 40 additional pieces of mail (2 parcels, 13 first class mail pieces
and 25 additional pieces of advertising mail)

Lifestyle and Preference data which are usually collected with information on range of
consumer interests offer even more potential to build mail volumes.

Less Developed Markets
Large mailers sending mass mailings is the key to profitability in any market. For the
developing postal markets this volume is critical. Before advertisers mail, they need a list of
consumers with some basic information: age, sex, and income ... The extra volume generated
by large mailers is the foundation business productivity and profits can be built on.

Mail volume is key to productivity and profits

Regardless of the type or size of market you are in, large mailers make their decisions in the same way. 
If direct mail is profitable they will mail more. 

     Experts estimate that a good list determines over half of the effectiveness of a mailing

Consumer and advertisers agree

Consumers and advertisers agree that the National Postal Services should be working to
make direct mail more targeted to consumer interests and profitable for advertisers. 

Contrary to what many in the media say, consumers like getting mail. And they like it even
more when the mail they receive is targeted to their interests and desires.

In many countries consumers complain about the way data is collected and sold without
their knowledge or permission. These same consumers are willing to share information with
a trusted third party such as the National Postal Service if they will get something of value
in return. 

Advertisers are always on the look out for new ways to make more profits. New more
accurate data for their mailings is an obvious way to improve their profitability.
In most countries advertisers are looking for data suppliers they can trust more than
the existing suppliers.

What kind of data ?

There are essentially two kinds of data; ‘new business data’- data that can be used to
acquire new business and ‘hygiene data’ - that can be used to clean and update other
data sources.

Both types of data are needed for cost effective direct mail. In many markets the postal services are active in the hygiene data market, but absent from the new business data

The quickest and easiest way to build new business data is the creation of compiled files
and consumer survey programs. It is important to remember there is no “one size fits all solution” these need to be adapted to the local markets.

Returns on investment

New data programs set up correctly can
   * Improve consumer satisfaction with mail
   * Increase mail volumes 
   * Give you control of a key business driver
   * And provide you with information to create many new services

But more importantly, it will generate profit and create real value…depending on your market situation you should be able to get a multi-fold return on investment.

The future for the National Postal Services

A few of the National Postal Services are taking steps to build and improve the data available
in their markets.

We predict as markets liberalize the distinction between data and delivery will disappear. Advertisers will buy contacts like they buy contacts in other media. If you don’t have
access to the data, many advertisers will use another delivery company.

For the forward thinking Postal Services a new position in the market is available that offers
a chance to lead the market, improve the quality of service to consumer and profitability
for advertisers.

     Data is key to the future of your market. There is no time better than         now to focus some of your investments on this key business driver.

   Copyright: Postal Solutions 2003