The Power of Co-op(eration)
A cooperative database is one where various companies and organizations contribute their buyers’ or donors’ names along with their transactional histories to create a large pool of individuals who have responded to their offers. These individuals and their transactional histories plus additional enhancement data such as demographic, psychographic and lifestyle information, etc., make up the entire cooperative database. The depth (number of transactions) and breadth (number of data sources) of data within the database give a comprehensive view of consumers’ behavior (donating, reading, buying, etc.). The greater the size, depth and breadth of a co-op, the better the view of the consumer. Once created, the database is continuously updated from buyer or donor transactional history by the co-op’s participating companies and organizations.
Co-ops (depending on their size) can provide their participants with access to as many as 200 million-plus individual consumers and donors with transactional history from hundreds or even thousands of participants.
Statistical models accurately predict the future behavior of individuals by ranking them based on hundreds of key variables and past transactions. There are two primary model categories: response models and profile models. Simply defined, response models are based on the characteristics of previous campaign responders, and profile models are based on the characteristics of a participant’s active housefile. Within each category there are various types of models that can be created, and each model is customized for every participant. The types of models created are determined by the participants’ specific objectives. Models, the logic behind them and the co-op participants vary from co-op to co-op, which is why organizations can use multiple co-ops successfully.
Using models helps organizations increase net income (“optimize” results) by mailing more efficiently. Ranking and scoring individuals from “most likely” to “least likely” to respond to an offer gives mailers the opportunity to eliminate from any mailing (house or prospect) however many low-scoring names they choose. Mailers who eliminate low-scoring names increase response and reduce total mail cost. There is also an option in prospect mailings to eliminate low-scoring names and replace them with higher-scoring names from the co-op universe to increase response.