Hanover Joins Start-up’s Co-op DB

Cataloger/e-tailer Hanover Direct Inc. will allow start-up I-Behavior Inc. to solicit its customers for a new co-op database. Hanover is the first marketer to participate in the file. I-Behavior provides marketing data to e-commerce firms.

Rakesh K. Kaul, president and CEO of Weehawken, NJ-based Hanover, estimated that his company will make I-Behavior’s opt-in offer available to 1 million of its customers. Those who accept will receive e-mail based on their purchasing history.

Transaction data forms I-Behavior’s backbone, according to the White Plains, NY co-op’s president and CEO Lynn Wunderman. By contrast, she says, most e-mail files provide demographic and interest-based information. “Neither [of these data types] lets marketers identify prospects based on their history of buying direct, sight unseen.”

Unlike other co-ops whose pricing is determined by the number of names requested, I-Behavior will charge participants based on click-through rates once consumers have received solicitations. Wunderman hopes to set charges based on actual sales, although this probably will not be implemented anytime soon.

Hanover is exploring incentives it can give customers to get them to participate in the co-op. Some, Kaul says, will join because the targeted offers alone will provide value. Others may need a little more convincing.

“There are companies whose whole business model [calls for offering] free games and prizes,” he says. But to collect the rewards, a consumer has to provide an e-mail address. “Clearly, incentives work. We will have to test all of these things.”

According to Kaul, I-Behavior appears likely to avoid some of the pitfalls other data-gathering operations have fallen into. Consumers know they’re offering their transaction histories for inclusion when they opt in, and both Kaul and Wunderman emphasize that I-Behavior does not track clickstream data.

“I-Behavior’s database is a transaction database. [The information contained on it is] no different from what a credit card or catalog database [includes] today,” Kaul notes.

There are other safeguards. Once they opt in, consumers can audit information the database holds on them. What’s more, during the sign-up process, the number of messages transmitted to consumers can be limited to a given time frame.

In the future, participating companies and organizations will be evaluated not only on the number of names they offer to the opt-in process, but on the depth of the transaction information they have on each consumer who opts in. A 1-million-name contributor with two data elements on each name will provide important breadth, but a 100,000-name contributor with 20 data elements on each name can offer key depth.

Early on, firms will receive a small equity share in I-Behavior as an additional incentive to join the co-op.