Are You a Hybrid? Check Your Database
By Geoff Wolf, partner of Lenser

I am often exposed to databases that contain a combination of consumers, business customers, education buyers, and even government buying entities. This is most visible during the address integrity portion of the merge/purge process. In most cases, we find ourselves involved in single-title projects that focus exclusively, for example, on home consumers or business purchasers.

But when a company’s house file consists of more than 10% of any one of these address categories, it may be time to consider differentiating strategic plans and merchandising offers. If one category exceeds 20% and only one title or cover version is mailed, money is likely being left on the table.

Our initial concerns are address integrity and maximum deliverability. We are all painfully aware of the cost to print and mail catalogs. The processes that are available in a merge-purge environment are very different for residential, business, educational, and government addresses. If one’s customer file consists of more than one address type, yet the company is performing a single address hygiene process, it is safe to assume that catalogs are not getting delivered in the most efficient manner.

And at today’s paper and postage costs, even if the circulation numbers are small, one should consider mailing the different address types separately. The same applies for list services, response matchbacks, and other data processing.

As the circulation numbers increase, consider your offers. Consumers and businesses demand separate contact strategies, as well as relevant content and messaging. Customer behavior is extremely different in the context of a purchasing decision centered on business operations. The “one size fits all” concept simply does not work here.

What are the main differences between residential consumers and business buyers of any type?

First and foremost is the motivation for making a purchase. Individual consumers buy more spontaneously, either for themselves, their household, or for friends and family. There might also be an occasion or tradition at play. Holidays and weddings are obvious examples; others include birthdays, anniversaries, or maybe just one for a personal spending spree.

But business buyers have clear buying cycles driven by operational needs that frequently repeat themselves. These buying decisions are often planned and require the approval of one or more key decision makers within the organization.

So what should you do?

First, separate customers found at residential addresses from those at institutional addresses (e.g., large businesses, small businesses, schools and other education-related entities, and governmental sites). Also, consider buyers at residential addresses who are buying for business operations – these are typically referred to as SOHOs (small office/ home office addresses).

Second, if these two categories exist on the house file in significant percentages, consider adopting separate circulation and merge/purge practices for each group. It would not be a bad idea, either, to consider working with a service bureau that specializes in business-to-business or hybrid merge/purges.

Be sure to keep these differences in mind both for data processing and your offer proposition if, in fact, your company is a hybrid.

---Source: Multichannel Merchant List & Data Strategies Nov. 5, 2007 newsletter
(www.multichannelmerchant.com). Geoff Wolf is a Partner at Lenser.