Hanover Direct is First Participant of I-Behavior Co-op

Hanover Direct Inc. has agreed to allow I-Behavior Inc., a new e-commerce co-op, to solicit its customers to enroll in the I-Behavior database. In doing so, Hanover becomes the first marketer to participate in the new file.

In an interview with DIRECT Newsline, Rakesh K. Kaul, president and CEO of the Weehawken, NJ-based cataloger and e-tailer, estimated that his company will initially isolate one million unique consumer e-mail addresses, and will send each of these a solicitation to opt into the system and receive e-mail based on their transaction history.

Transaction data forms the backbone of I-Behavior, according to the co-op’s president and CEO Lynn Wunderman. According to Wunderman, most e-mail files provide demographic- and interest-based information. “Neither one lets marketers identify prospects based on their history of buying direct, sight unseen,” she told DIRECT Newsline.

Unlike other co-ops, which base pricing on number of names requested or netted, I-Behavior will initially charge its participants based on click-through rate once consumers have received solicitations. Wunderman hopes eventually to charge based on actual sales, although this will likely not be implemented in the near future.

Hanover is in the process of exploring what types of incentives and offers it can make to its customers to induce them to participate. Some, Kaul said, will join because the targeted offers alone will provide value. Others may need a little more convincing.

“There are companies whose whole business model is that they offer free games and prizes,” he said. But to collect the prizes, a consumer has to provide an e-mail address. “Clearly, incentives work. We will have to test all of these things.”

I-Behavior should, according to Kaul, avoid some of the pitfalls other data-gathering operations have fallen into. Consumers know that they are offering their transaction histories for inclusion when they opt in, and both Kaul and Wunderman emphasize that I-Behavior does not track clickstream data. “The I-Behavior database is a transaction database. It’s no different from what a credit card or catalog database has today,” said Kaul.

There are other safeguards as well. Once they’ve opted in, consumers have the right to audit the information the database holds on them. During the sign-up process they can also limit the number of messages within a given time frame.

Future corporate participants will be evaluated not only on the number of names they offer to the opt-in process, but on the depth of the transactional information they have on each consumer that chooses to participate. A million-name contributor with two data elements on each name provides an important level of breadth, but a 100,000-name contributor with 20 data elements on each name offers a significant level of depth. In the early stages, both companies will receive a small equity share in I-Behavior as an additional incentive to participate.