December 1996
Database Maintenance Planning: Scheduling,
Updates and Results
by Kenneth M. Culpepper
Direct Marketing Magazine, December 1996, pp.16-20
This article is part four of a series on database maintenance planning. Database maintenance planning is a disciplined process that integrates entire corporations and organizations for the purpose of efficient delivery of direct marketing mail pieces. It is an ongoing process that produces perpetual financial benefits of waste avoidance and customer recovery revenue.
The articles cite examples from a case study of an actual organization's research, implementation, organizational impact, financial summary and results of database maintenance planning. It is a retailer, direct marketer, cataloger, publisher, wholesaler and sponsor of conferences and events. It has three different transactional system databases along with several other stand-alone databases that combine for a total of approximately 3.3 million consumer customers.
The previous articles on database maintenance planning, described what the Database Maintenance Plan (DMP) does and how critical research about organization-wide database(s) and mailing are assembled to justify its implementation. Additionally, the articles have expedited the translation of research into business planning and explanations of maintenance processes, their flow and implementation. This article will focus on the scheduling of DMP implementation and updates, financial forecasts, and the results of the case study's DMP.
Scheduling the Implementation
Successful DMP implementation is largely dependent upon continuous communication flow within the organization and planning between the it and the database maintenance vendors. Failure to business plan either one of these two variables will cause a derailment of any scheduled implementation goals.
There are two variables of scheduling that have to be communicated and planned for implementation of the DMP: 1) business processes and 2) time.
The business processes that need to occur within the organization and through outside vendors have been explained in the previous series of articles on database maintenance planning (Direct Marketing Magazine, August - October 1996). The time durations will vary by organizational structure, database maintenance needs and choice of vendors.
The following implementation steps are from the case study's example illustrating how this organization scheduled it's DMP. In this example, notice how these steps document who is doing each process, how much estimated time each will take, and what are suggested criteria for some of the processes. The database maintenance processes and other related acronyms are located in a glossary at the end of the article (Figure 5). A Gantt chart showing these 10 steps in sequence, time frame, and simultaneous work-flow is located in Figure 1. (SEE FIGURE 1)
1. Run organizational databases through standardization and verification. On a preestablished date, request the access of all databases to be uploaded for standardization and verification. This should take approximately 15 days to implement.
2. Send the deficient data that is identified to the USPS for AEC. After the databases have made the first pass through standardization and verification, rejected addresses will be sent to the USPS to run through AEC. This step should take approximately 30 days. The databases are coded by source, and are now a customer base.
3. Receive the processed AEC data and update the customer base. After AEC has corrected what it can of the customer addresses, the corrected addresses are sent back to the Information Department (ID) and updated to the customer base. There is a one-time program written and tested by ID, which will update the corrected addresses to the customer base. The estimated time to write and test this program is seven days, plus one day to update the corrected addresses. Planning within the organization will take approximately 30 days.
4. Run the customer base through standardization and verification again. The customer base will run through standardization and verification again to insure it is sent to the outside vendor in its cleanest internally produced form for the initial cleaning. The cleaner the customer base is sent to the vendor, the less dollars will have to spend on the initial cleaning. This step should take one week.
5. Send the customer base to the outside vendor. Postal Services (PS) will send a copy of the current customer base to the outside vendor to be run through LACS, COA, merge/purge and house cleaning. It will then be flagged and corrected through these cleaning processes. This step should take about 30 days.
6. Analyze cleaned customer base and reporting. The outside vender will send the cleaned customer base and reports back to analyze. This step should take approximately 30 days.
7. Update the customer base. Flag and/or purge "non-deliverable" data. ID will update the customer base. A separate installation strategy must have been developed by this time to identify which data elements are critical to implement. Upon approval of the plan, organizational-wide planning will need to begin to determine importance of file layout data provided by the outside vendor.
This planning and decision making will take approximately 30 days and can be done at the same time as the other planning. It is at this implementation step that ID delivers the program that flags each record with the appropriate deliverability and/or COA codes.
By the time all the names and addresses that are non-deliverable and non-recoverable are identified by the cleaning processes, each area department within the organization should have developed criteria to determine who and how it will purge these customer files. Some issues that will call for agreement on a criteria for purging non-deliverable and non- recoverable customers are:
a) Any accounts receivable names that are presently shown as owing money
b) Any accounts that show significant purchase history
c) Any names that are recipients of royalty/copyright payments
d) Any present or former trustees or employees
e) Inactive CSC names
8. Engage in Address Change Service (ACS) with the USPS. ID will oversee this service that sends a tape back to the organization with the forwarded or corrected address, if available. This keeps the customer base more current, saves wasted postage and production dollars in-between cleanings, and controls future COA costs. ID will need to write an update program for the corrected ACS address changes. The planning to implement ACS will need to start as soon as the plan has been approved, and should take approximately 30 days.
9. Establish mail tracking mechanisms. Determine the impact of the DMP. This step is a by-product of documenting each mailing. This should occur in PS and should be devised and implemented from the first cleaned customer base mailing. The tracking document should take about two days to create and implement. Each mailing should document: 1) quantity 2) postage rate 3) estimated production costs 4) any ACS returns
A program should also be written by ID to track all recovered customer account numbers and average spending for the remainder of the first year of implementation. This will allow the organization to put an actual dollar amount on the value of recovered customers. Development of the program, process and documents for tracking the mailings should take approximately 30 days, and should be developed as soon as the plan has been approved.
10. Reporting cycles yielding the previous quarter savings from the DMP. A report of the previous quarter savings will be reported for each business unit along with requested analysis. These reports will also be sent to the upper management on a quarterly basis if requested. Other reports may be necessary. This step will take approximately 30 days.
The Gantt chart (Figure 1) schedules the DMP by implementation step and by date from an anticipated start up date (June 1). This allows all areas of the organization to know what is coming their way and when, why each step is necessary, and how much time is needed for each step to complete the implementation process. Also notice, the Gantt chart illustrates that several implementation steps can begin as soon as the DMP has been approved. This is important because only certain steps are dependant upon the completion of others, allowing for a flexible time frame to complete those that are non-dependant. DMP Updates
Database maintenance is a perpetual process. Because data continuously degrade, additionally, there are ongoing savings that the DMP gives an organization. Consumer data degrade in usefulness approximately 20-30% annually, while business-to-business data are estimated to degrade at a more rapid rate of 50%. Therefore, a DMP is a perpetual process in any organization that uses a database.
After the initial cleaning, there is an on-going maintenance process that should be put in place to update and continue data hygiene. As with the initial cleaning, updates are determined by estimating the waste avoidance and customer recovery revenue for the period of time that is in-between cleanings. It is important to document and estimate the financial impact of the data hygiene updates, and include these figures in the financial impact of the DMP. Figure 2 (SEE FIGURE 2) illustrates how the case study estimated its update.
Financial Impact of the DMP
What typically speaks louder about the approval of the DMP to upper management is the long term financial forecast for the organization. This is generally because financial numbers are usually the language that most of upper management speaks and uses to make business decisions.
The financial impact of the DMP for the case study shows the expenses verses the income (waste avoidance savings and customer recovery revenue) contributed by its implementation over a five year period. Figure 3 illustrates the case study's DMP financial impact. Notice that Figure 3 (SEE FIGURE 3) also contains the financial impact of the data hygiene updates. DMP Results
After plan approval from upper management, the case study's DMP began implementation. As with most business plans, the DMP in this example did not foresee some of the time snags during implementation. However, because of planning on the front end, those time snags were absorbed by other time gains that enabled the DMP to be only two weeks behind at customer base update time.
Figure 4 illustrates the combined total of all three databases and compares the results from each and the combined total to the estimates given in the DMP.
The actual results of the cleaning processes were approximate to the results of the sample from the organization's customer base and the estimate of the plan. The overall results from the organization's combined databases were better than estimated by the DMP. The data had degraded to higher levels of deficiency over the months between the database sample and the actual cleaning processes. A couple of processes show a slight improvement from the estimate; however, these improvements are due to sending the outside vendor data that had been sent through some prior cleaning processes that the sample was not sent through.
The results of the cleaning processes reported that the financial impact of the DMP will be greater than estimated. This is due to its conservative estimate, the degrading of the data since the time the sample was taken, the greater numbers of records that were sent through the cleaning processes than estimated, and more customers recovered than estimated.
The costs were greater than estimated because the data had degraded in time and the number of records increased by approximately 900,000. The DMP estimated the initial cleaning costs to be $31,080. The actual initial cleaning costs were $37,231. (See Figure 3)
Conclusion
There were three unanticipated benefits that came out of planning this organization- wide database maintenance process. These three benefits are strong characteristics of the implementation of the DMP in any organization: 1) It is usually the first place the wrecking ball comes out and starts tearing down the corporate culture walls, and forces people in the entire organization to work together; 2) It is usually the first time that the entire organization gets a glimpse of the customers being its assets; and 3) It is an initial and perpetual funding for database marketing.
In conclusion, the DMP accurately achieved the savings in waste avoidance that was estimated for its implementation into this organization. In fact, it did better than it conservatively projected and would have been more valuable considering the United States Postal Service's recent classification reform.
Each business and organization is different. There are different aspects of corporate culture to deal with in all of them. Only through the database maintenance planning approach, can a multi-business organization integrate its database hygiene efforts.
The reality is that no matter how great a direct or database marketer you are or intend to become, if you are not delivering your marketing communications piece to the intended customer, your response rates and return-on-investment (ROI) for your marketing efforts are leaking precious profitability.
Ken Culpepper is president of Integrated Marketing Solutions, Inc., a
knowledge-base marketing firm that
integrates tactical marketing strategy with management of multiple contacts
of businesses to their customers, prospects and channel customers. IMS incorporates
marketing business planning, long-term corporate ROI strategies, and marries
knowledge-based marketing with e-commerce strategy and systems. IMS has
offices in Atlanta, GA (770) 390-9199 and Nashville, TN (615) 782-0461.
(Web: migmar.com/ims)