What works now probably was not what worked 3 years ago. What works now certainly was not what worked 5 years ago. In direct mail marketing, and especially B2B direct mail marketing, the tool most widely used for ongoing direct marketing campaigns has been the private list database. The private list database, while not a new tool, proved to have wide acceptance during the "go-go years of the 1990's".

I'm not taking a position in favor or against the economic benefits to either the list owner or the list renter in a private database transaction. That debate has been thrashed out for many years, and there are good arguments on both sides of the equation. The true winner for these private databases has probably always been the service bureau that runs them. However, this is not the focus of this article.

I don't think a private database for B2B mailers can work properly in a recessive economy. Here are some of my thoughts. As a matter of fact, private databases can only hurt the marketing effort and results.

Inherent in databases is history that is built over a period of time. In the case of private database builds where rented lists are used, up-front economic savings are key factors in increasing the ROI (return on investment). Lists are put into the base, then are passed against other lists, tagged against their house files, then used based on experience and past history. New names are added periodically on a quarterly, semi-annually and on an annual basis. Elimination from the base comes through an overall list hygiene of the base itself.

We are in a new economic time, and the current environment has created new challenges that these databases that were created in a growth economy had not foreseen and do not allow for.

We are in a full blown recession. Businesses have consolidated their staff and different departments have gained purchasing power. Employees have been cut; budgets have been sliced. What works now is not a history of what succeeded yesterday. New employees, in different positions have new buying power. The private database cannot reflect this new twist.

In the old equation of RFM (recency, frequency and monetary value) Recency is the first word, and that is probably the most expensive and least adhered to of the three words when it comes to private database builds.

In a growth economy, the database even by some of its strongest proponents had to be more stagnant than the typical merge purged mailing. The cost savings up front and the lack of turn-over in the growing business community allowed these databases to yield strong results, which is not the case any longer. The person responsible for buying product services today is not the same person that was responsible two years ago, 6 months ago and probably not even 3 months ago.
Even taking "hotlines" into a base cannot keep up with a regular monthly list rental schedule. Database builds take a longer "upfront". By the time names come in they are no longer recent.

Names in a "hotline select", most recent 30 days, are already several months old when they come to market. Databases function as a "snap-shot in time" and cannot compete correctly in an economic environment of downward change.

The proof of this statement is not only found on the nightly news, but in the shrinking quantities of hotline names, and fresh subscribers to various business publications. Savvy B2B marketers must by necessity alter their program. The toughest challenge is to find the new buyer in a downsized office with a tighter budget. The target marketplace has also become smaller; even in the macro sense. Companies with 100-500 employees, which have always been a prime target for the B2B mailer, have shrunk in size, and the functions of purchasing have moved up the ladder as cutbacks have appeared. A private database does not catch this critical move within an organization.

The builders of the private database will argue that many of the overlays, tagged suppresses, proportional split payments and linkages to houseflies make the private list database a necessity. That may have been true at one time, but the speed, power and delivery systems available today make those arguments obsolete.

Maybe this is revisionism or return to traditional list rental and merge purge, but in the uncharted waters of an economy that is still turbulent, the private database cannot be the panacea for survival for the direct marketer that wants to see the next upturn.

Roy Schwedelson (roy@worldata.com) is CEO of Worldata, Inc. (www.worldata.com), a leading List Marketing, Electronic Marketing, and Database Services company;
Worldata, 3000 N. Military Trail, Boca Raton FL 33431.