Breaking into theDatabase Business

Gail Nickel-KailingBusiness Strategies Etc.Business Strategies Etc.

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Don’t Mail Junk Mail

Junk Mail:Sent to the wrong person with the wrongoffer for the wrong product at the wrongprice at the wrong time.

Illegal or immoral…

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And, remember…

No one ever made a sale from the bottom ofa trash can!

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“This ‘telephone' hastoo many

shortcomings to beseriously considered

as a means ofcommunication. The

device is inherently ofno value to us.”

Western Union internal memo (1876)

‘Scuse Me?

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Today’s Seminar

• Why should you get into the “databasebusiness”?

• Good data:– What it is– How to get it– How to keep it

• Postal mail data vs. email data• Data security and privacy• Choosing a data quality software vendor• Resources

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A Couple of Definitions…

Before we talk about databases, we shouldtouch on what you plan to do with them.

So - in the production arena - what ismailing?– Mailing is NOT printing– Postage is NOT revenue– Mail list manipulation and management is NOT

prepress file management

And always remember:– You must – MUST – keep your mailing

software current at all times!

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Why Get into the Database Business?

• About 55 - 60% of all printed matter endsup in the mail sometime in its productlifecycle.

• As much as 40+% goes directly into themail system.

• Mailing is the #1 value added service thatcommercial and digital printers want toadd.

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Direct Mail

• A strong economy supports direct mail• Legislation and regulation limiting

telemarketing and e-mail marketing• Digital printing approaching an “audience

of one”• Most of us are more upset to receive

unsolicited e-mail - “spam”- than toreceive unsolicited print mail - “junk”

• “Flip side” – states proposing “Do NotMail” legislation

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Direct Marketing Expenditures Up

• Since 2002, direct marketing expenditures:– 69% increased– 16% stayed the same– 15% decreased

• Direct mail expenditures:– 54% increased– 33% stayed the same– 13% decreased

• Expenditures – getting vs. keeping customers– 52% on customer acquisition– 47% on customer retention

• 72% have increased their use of e-mailmarketing

Source: Direct Marketing Association

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2006 Direct Mail Expenditures

Source: The Winterberry Group

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2006 Direct Mail Growth

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“The citizens who livein the next century will

pay one cent for apostage stamp.”

USPS Postmaster GeneralUSPS Postmaster General(1893)(1893)

‘Scuse Me?

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How Personal?St

atic

Lay

out

Dyn

amic

Lay

out

CustomizeAddressed to “Resident” –Same contents – each piece the same

Addressed to “Resident” –Selective inserts – sort by ZIP

Addressed to recipient on envelope –Sorted by ZIP

Address merge – name and addresson both letter and mail piece

Mail merge – name and addressand salutation on letter

Document assembly –assemble pre-written paragraphs

Data merge – name, address, salutation,Plus name or other data embedded in text

Database merge – linkto all fields in database

Hybrid documents – personalizedpages with static pages

Database and image merge – link to databases and images

Rules-based database andimage merge, plus dynamic layout

Every pixel on every part of piececustomized to recipient

Mass Marketing:Every piece the same

Target Marketing:Every piece different

Source: Personalized Printing, Frank Romano, RIT, May 2001

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Another Look at the Continuum

Source: The Winterberry Group

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An Audience of One…

Personalized URL

Personalized Images

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Value ofPersonalization/Customization

• 48% - Increase in repeat orders/customerretention

• 34% - Improvement in response time• 36% - Improvement in response rate• 32% - Increase in overall revenue/profit• 25% - Increase in order size/value

Source: Personalized On-Demand Printing and Publishing: Targeting the Right Opportunity, (C) 1997, CAP Ventures, Inc.

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Improvement in Direct Mail Responses

• Basic mailing: B&W, static text – 0.46%response

• Adding name only – increased response44%

• Adding full color – increased response45%

• Adding name & full color – increasedresponse 135%

• Applying database information inconstructing the offer – increasedresponse over 500%

Source: An Investigation: Direct Mail Responses, by D. Broudy & F. Romano, Digital Printing Council, October 1999.

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“I think there is aworld market for

about five computers.”

Thomas J. WatsonThomas J. WatsonChairman of the Board,Chairman of the Board,

IBM (1943)IBM (1943)

‘Scuse Me?

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Addresses – the Good, the Bad, the Ugly

• All addresses are not equal, some arecorrect but not worth mailing to.

• 17% of Americans move every year, andonly 80% of them file a change of addresswith the USPS.

• Customer databases, for the most part,are abysmal.

• In a 2005 report by the USPS, UAA mail:– 1.6 B pieces of mail returned– 1.98 B pieces were forwarded– Over 6 B pieces were discarded

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E-mail Databases - Even Worse

• Few places to rent e-mail lists• No legitimate compiled lists available• CAN-SPAM - must honor opt-outs• Unsolicited e-mail - “spam”- vs.

unsolicited print mail - “junk.”

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“Computers in thefuture may weigh nomore than 1.5 tons. ”

Popular Mechanics (1949Popular Mechanics (1949))

‘Scuse Me?

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You talking to me?

• D. G. Kailing• D. G. Nickel• D. G. Nickel-Kailing• D. Gail Kailing• D. Gail Nickel• D. Gail Nickel-Kailing• D. Kailing• D. Nickel• D. Nickel-Kailing• Dona G. Kailing• Dona G. Nickel• Dona G. Nickel-Kailing

• Dona Gail Kailing• Dona Gail Nickel• Dona Gail Nickel-Kailing• Dona Kailing• Dona Nickel• Dona Nickel-Kailing• G. Kailing• G. Nickel• G. Nickel-Kailing• Gail Kailing• Gail Nickel• Gail Nickel-Kailing

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You emailing me?

• Gail@business-strategies-etc.com• Gail@whattheythink.com• Gail_NK@yahoo.com• KailingG@aol.com• Gail@Nickelswood.com• DGailNK@gmail.com• g.nickel-kailing@comcast.net

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“There is no reasonwhy anyone would

want to have acomputer in their

home.”Kenneth H. Olson, PresidentKenneth H. Olson, President

DEC (Digital Equipment Company)DEC (Digital Equipment Company)Convention of the World FutureConvention of the World Future

Society (1977)Society (1977)

‘Scuse Me?

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Poor Data Quality

• Poor quality means lost revenue or highercosts

• 23.8% of mail is incorrectly addressedand requires correction

• 2.7% is completely undeliverable• People consider 70% of their e-mail is

spam (DoubleClick, 6th Annual ConsumerE-mail Study)

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Where Does Bad Data Come From?

• Self-entry by the customer - my bad!– 3124 West McGraw Street (BOA)– 3214 West McGraw Street (BSE)

• Internal data entry– Salesforce.com:

• First Name Field: Bobbie (Roberta)• Title Field: Mac Operator, retired, deceased• Company Field: CREDIT HOLD ABC Co Inc / The XYZ

Group

• External prospect lists– External lists are someone else’s internal lists

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Customer Data Quality Requirements

• The data are accurate– The address actually exists– The person/company exists

• The data are current• The data are complete

– Each address has complete info for delivery

• The data are not redundant– One and only one record per contact

• The data are standardized

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Managing data quality

• Trap bad data before it gets into thedatabase

• Flag existing undeliverable addresses forcorrection or deletion

• Update current records with informationchanges immediately

• Enhance records by appending relatedmailing information (ZIP+4 codes, forinstance)

• Standardize addresses to USPSspecifications

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Developing a Data Quality Program

• Acknowledge that there is a problem• Assign a person responsible for the

program• Identify the source of poor quality• Complete a technology assessment• Evaluate data quality vendors• Implement the solution• Validate the solution

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Selecting a data quality vendor

• Completeness• Enterprise design• Ease of use• Sophisticated

rules engine

• Streamlinedtesting and QA

• Comprehensivedata capture

• Ease of integration• Processing power• Vendor support

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Keeping Data Private and Secure

• Physical security - access to the facility,media handling

• Electronic security - fire walls, networksecurity, file security

• Data delivery - physical or electronic• How to handle “back up, store, and

delete”• Production workflow - finished and

unfinished products• Distribution of raw and finished products,

spoilage

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“640K [of computermemory] ought to beenough for anybody.”

Bill GatesBill GatesMicrosoft founder and chairmanMicrosoft founder and chairman

(1981)(1981)

‘Scuse Me?

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Mailing Terms You Need to Know

• CASS – Coding Accuracy Support System– a certification process to ensure thatpostal automation software canaccurately standardize addresses andencode them with ZIP+4 and carrier routeinformation.

• PAVE – Presort Accuracy Validation andEvaluation – a certification process toensure that postal presorting softwarecan accurately presort and preparemailings for deposit with the USPS.

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Working with the USPS

I’m from the USPS and I’m here to help you…• The Post Office is just that place where you

buy stamps.• The Postal Service – as in USPS – is the

service provider with whom you work.• There is no one named “someone” at the

USPS.

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Mailing Services Menu

• Lettershop services – “lick and stick”• Personalized

– Personalized letter, inserted with brochure into windowor matched envelope.

– Small volumes– Simple VDP applications – “mail merge+”

• Customized– Simple variable graphics and text (versions)

• 1:1 Marketing– Complex variables, conditional logic,– Cross media publication – e-mail, Web, direct mail– Fulfillment, response management (including

personalized micro-sites, analytics)

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10 Steps to Offering Mailing Services

• Develop a strategic plan.• Select your postal automation/presorting

software.• Select your mailroom equipment.• Develop a mail piece design/validation process.• Develop a list processing/management process.• Develop security/privacy management

processes.• Develop a quality assurance program.• Hire/train your staff.• Modify your estimating and pricing procedures.• Use your postal automation software to generate

new revenue.

Get Involved – Stay Informed

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Mailing “Gotchas!”

• Mailing, as a process, continues to getmore complex.

• Before 1990, there were three postagediscounts.

• In 1990, a postal “reorganization”increased discounts to about 75.

• Today there are over 4000!

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A note: CYA

• Get good “Errors and Omissions”Insurance.

• You could be expected to pay for thereprinting, mail processing, and postagefor errors resulting in a failed mailing.

• Other liability issues:– Inventory “shrinkage”– Postage management

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“The Web – it’s notgoing to be that

profound.”Steve JobsSteve Jobs

President, ApplePresident, Apple(1996)(1996)

‘Scuse Me?

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Prepare a List for Mailing

• Lists cleaned and standardized– Per postal regulations– For aesthetics, e.g., all caps

• Duplicates eliminated (merge/purge)• Current customers’ names eliminated if

appropriate• Names recently mailed are eliminated if

appropriate• All records coded for post-mailing analysis (list

ID, date of mailing, campaign ID, etc.)• Seed names added to monitor postal

performance• Records sorted for maximum postal

cost/efficiency

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Now that we’ve scared you…

• About 55 - 60% of all printed matter endsup in the mail, sometime in its productlifecycle.

• As much as 40+% goes directly into themail system.

• Mailing is the #1 value added service thatcommercial and digital printers want toadd.

• Confirm with your customer and prospectbase that you have the market.

• Go for it!

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“Make all theimprovements you

want, just don'tchange anything.”

AnonymousAnonymous

‘Scuse Me?

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Questions?

The greatest problem inThe greatest problem incommunication ...communication ...

the illusion that it hasthe illusion that it hastaken place!taken place!

George Bernard Shaw

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Postal Software

• Entry level– Envelope Manager, Mailers+4, AccuZIP,

SmartAddresser

• Mid-tier– BCC Software, Satori Software, SmartMailer,

Postalsoft Desktop Mailer, Anchor Computer

• Top-tier– Group1/Pitney Bowes, Trillium (Harte Hanks),

Business Objects, Acxiom

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Resources - USPS

• USPS - www.usps.com• RIBBS – http://ribbs.usps.gov• Postal Explorer – http://pe.usps.gov• MERLIN – www.usps.com/merlin

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Resources - Events

• MailCom, MSMA - October 8-10, Las Vegas NV• DMA05, Direct Marketing Association -

October 13-18, Chicago IL• Parcel Shipping & Distribution Forum -

October 29-31, Chicago IL• Xplor/Graphics of the Americas - February 27-

March 1, 2008, Miami Beach FL• AIIM/On Demand/Xplor - March 3-6, 2008,

Boston MA• National Postal Forum, USPS - May 18-21, 2008

- Anaheim CA

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Resources - Associations

• Mailing and Fulfillment ServicesAssociation, www.mfsanet.org

• Mail Systems Management Association,www.msmanational.org

• Alliance of Non Profit Mailers,www.nonprofitmailers.org

• PostCom – Association for PostalCommerce, www.postcom.org

• Parcel Shippers Association,www.parcelshippers.org

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Resources - Publications• Mailing List Strategies - A Guide to Direct Mail Success ($) -

Rose Harper - 30+ used copies - www.amazon.com• Direct ($) - www.directmag.com• MultiChannel Merchant - www.multichannelmerchant.com• Mail Magazine ($) - www.mail-magazine.com• DOCUMENT - www.dptmag.com• Mailing Systems Technology - www.mailingsystemsmag.com• Parcel Shipping and Distribution - www.psdmag.com• PostalWorld ($) - www.mypostalworld.com• PostInsight - www.postinsight.com• Business Mailers Review ($) - www.businessmailersreview.com• PostalNews - www.postalnews.com• Presort.com - www.presort.com• PostalMag - www.postalmag.com• DM News ($) - www.dmnews.com• Inside Direct Mail - www.insidedirectmail.com

Gail Nickel-Kailing, PrincipalBusiness Strategies Etc.

E-mail: gail@business-strategies-etc.comTel: 425-894-8524Fax: 413-460-3602

Skype: Gail_NK

ProvidingProviding research, advice, and council toresearch, advice, and council toenterprises and service providers toenterprises and service providers to

enable effective internal and external enable effective internal and external distribution of online and offline documentsdistribution of online and offline documents

since 1984.since 1984.