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Consumer Strategies Report: How does a cable company go about building a consumer database and how much would it cost?

Mr. Berrios: Before you even begin, you would have to consider that certain databases just aren't ever going to be too large. Our analysis of other cable network consumer databases tells us that a typical niche cable network, like Disney's SoapNet or the recently launched JTelevision, a 24-hour national Jewish network (1), may peak at around 500K or so relevant subscribers to a database.

Companies we've worked with to date have bought lists or created their own through sweeps and promos. In either case, the most important thing to having one is a user-friendly interface. Don't allow accessing your interface to become a big hassle for the unknowledgeable and uninterested consumer. Also, ask for their info; it's roughly about $1 per email from your entire marketing budget based on a broad category analysis, so you wouldn't want to waste it.

The cost fortunately varies depending on the size and scope of your efforts. (i.e. it gets cheaper when you aim to acquire 200,000 in one shot. Typical efforts yield between 50 - 100,000 emails. Now, if you've already got 500,000 emails, every additional email you acquire may be slightly more expensive, since you've already got the low-hanging fruit).

CSR: What and who are the best people to manage this database?

AB: This database shouldn't simply be seen as an asset to be managed. It's your direct link to your audience. It's the culmination of the value of your relationship with consumers before they decide to spend money and time on you. As a result, it should be managed by a dedicated person (i.e. director level, with multi-channel communications experience).

There's always internal debate as to how many people have access to this database: the fewer, the better.

In fact, guidelines for its use should be spelled out clearly for all to know, with the director having final veto power over what sort of messages gets sent out to it in accordance with these guidelines. (This should eliminate biased decisions and internal bickering since everyone knows the guidelines.)

Although there are software packages out there that make mass emailing a jiff, I strongly recommend working with a professional firm when your list exceeds 10,000 (i.e. Striata, Bigfoot). Even your ad and media agencies outsource to these professionals. The reason is that there are things like list development, hygiene, management, security, whitelisting, and analysis that require special attention (and software).

A final note: since your list is an actual asset that you've acquired with promises of privacy and security, allowing another firm to use your list (i.e. professional emailers or advertisers) can be minimized because these firms now allow you to upload your list onto their web-based programs, as opposed to giving them your list altogether.

Consultants like us can help develop all of the guidelines you need for a successful relationship with the folks on your database.

CSR: What are some of the items we should be putting into our timeline for creating a database?

AB: - Goals of your database (not set in stone, but helps when you decide the sort of information you want to get from consumers, which is the biggest mistake most companies make starting off):

- Segmentation of consumers who you want to include in your database (so you spend your acquisition budget more efficiently.)

- Guidelines development and enforcement, (important for potential stakeholders)

- Finding a dedicated manager of the database, (including incentives that would make this person act as part of the team, yet powerful enough within the organization to utilize the database to meet its intended goals)

- Interface architecture (which is extraordinarily important to get response from consumers in all aspects of this undertaking)

- Analysis-goals to produce actionable data (after all, you're going to enter an even more complicated realm of information that doesn't originate from Nielsen which you need to be ready for)

- Involvement of other depts (on-air advertising, pr, etc) during acquisition efforts (which is why you want a person with multi-channel marketing experience in charge of your database)

- Carefully planned retention strategy (after all, after you worked so hard and spent to much to get it, you wouldn't want to lose them right away, would you?)

CSR: And what timeline would you recommend?

AB: Prep time should be about 2 months. Launch time should be about 3 to 5 weeks, optimally.

Current efforts to acquire information for consumer databases only yield information during the actual sweeps and promos. It stops almost entirely in between.

Promos shouldn't be too long because consumers get confused and tired. We just completed a major analysis of an 8-week promo for a retail client and it revealed that with every phase of the campaign, awareness decreased substantially. From the first-to-second phase, 57%. Then another 12% when it moved to the third and final phase.

This is where guys like me are extremely valuable to firms building their databases: we advise you on the best expenditures and time-frames so you don't blow your wad in one shot and get little in return.

Since agencies are still paid on some sort of commission + performance incentive, they will always steer you to spend the most and for the longest time. I'm paid per hour regardless of the outcome or your budget, and as a result, my advice is always rigorously analyzed to deliver the most objective recommendations that are in your best interest.

Write to Al Berrios at editor@alberrios.com

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Footnotes

1 http://www.jtelevision.com/

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