Heavy Lifting

IT’S NOT SURPRISING that a health and fitness publisher would put a premium on being lean and limber. But Rodale Inc. has taken the ideal to an extreme, applying it to direct marketing. The Emmaus, PA-based company will cut its outbound mail from a high of 250 million pieces in 1999 to between 180 million and 200 million this year.

Rodale did so by outsourcing its marketing database, designing one with considerably more flexibility than the tangle of separate files it had hosted in house. The new system was also given a thorough data hygiene and integration workout by data services provider Acxiom, which now maintains its files.

Moving the nuts and bolts of database upkeep to the Little Rock, AR data firm has allowed Rodale to focus on marketing. But the new system does more than increase cross-selling and upselling possibilities. Promotion tracking enables Rodale to determine when to send an offer to a customer — and when to stop before the amount spent on that customer turns its lifetime value from positive to negative.

Rodale’s entire database has been scored according to a customer segmentation model and each customer has been placed into one of 10 profitability deciles. The profitability evaluation incorporates everything a consumer has purchased from the company, as well as the cost of all marketing material sent.

While customers in both the high- and low-value segments may cancel their subscription to the same magazine, a higher rated customer may be receiving four other Rodale titles, and is therefore more valuable and worth additional attention.

“We would look at why they canceled the fifth subscription, and what we could do differently,” says Todd Leiser, Rodale’s director of database marketing.

But Rodale simultaneously looks at a customer’s profitability on a campaign-by-campaign basis. On average, regression model analyses indicate that cross-sales campaigns to existing customers are profitable for the top 30% of a ranked prospect, with a few strong products able to go eight deciles deep.

Low-scoring prospects for any given campaign may indicate limited affinity for Rodale products. Under Rodale’s old system, if prospects had made a purchase, their names would have gone back into the database as viable for future mailings.

But if their affinity is low, spending more to promote to them may move their lifetime value into the negative range. By recording the regression model score, Rodale can avoid marketing to such prospects if they score on the low end of profitability in the next modeling session.

“There is a strong correlation between how deep we went to sell to them and their future value,” Leiser says.

All this has contributed to the margin of Rodale’s campaigns. But what about cutting down on the mailing levels? That’s where an extensive data hygiene review by Acxiom came into play.

It took 14 months, starting in early 1999, for Acxiom to build Rodale’s database. Rodale had previously maintained its database in house, on a mainframe that had several different files.

In addition to the active list, which consisted of five years of book customers, as well as all active magazine subscribers and a year of expires, there was a separate list of inactives, as well as up to 2 million new names a year gathered from events hosted by Runner’s World magazine.

Rodale also owned a subscription to Metromail’s national consumer database, which it used to apply data appends onto outside lists. Finally, there was Rodale’s promotion history file. All of these elements had to be pulled together for every campaign the company mailed.

Complicating matters, Rodale couldn’t be overzealous in bumping out names. Like most publishing concerns, Rodale takes a very conservative approach toward deduping its prospect files.

“What is unique [in the publishing business] is that you have this rate base you have to make,” Leiser says. “Lose 10,000 records because you have eliminated dupes that aren’t dupes and you have to find more records.”

To combat this, every record goes through Abilitec, Acxiom’s customer identification system. Abilitec assigns a unique code per customer to synchronize data, regardless of change of address, name or even fragmented contact information. It can even be used to append e-mail addresses.

“If we can save 1% by deduping or doing things smarter, that’s 2 million pieces not mailed or being directed at the right individuals,” Leiser says. “Two million pieces represents significant marketing costs if they are going out as a dupe, or misguided, moved or deceased. You’re not going to generate any revenue from them.”

In addition to integrating the various data sources, Rodale’s current marketing database is considerably more flexible than its previous file. The in-house mainframe had limited consumers to five broadly defined product categories. Under the old system, Rodale would know only that a consumer had purchased health books. The new system allows a much broader range of categories, separating those individuals who purchased nutrition-focused products from yoga and exercise books.

“The ability to target more precisely drove down mail volume,” Leiser says.

The new database is able to integrate more information as well. The old legacy system was difficult to modify, and capturing e-mail addresses was a nightmare. “Everything we wanted to add was a big programming project,” Leiser says. “We were just adding functionality to a system rather than designing something that was much more flexible.”