One of the most potentially-rewarding merge purge operations you can do is to use modeling to improve the responsiveness of your list.
Modeling organizations use massive databases containing billions of transactions to estimate the responsiveness of records to various appeals. While each organization does it slightly differently, modeling organizations typically use market segmentation analysis to estimate the likelihood a name on a list will respond to a particular mailing based upon their age, sex, occupation, education, geographic location and/or other demographic characteristics. The more advanced modeling organizations can also factor a person’s interests and product use patterns into their analyses.
By comparing the demographics of each record on your direct mail list to the model they create, modeling organizations can identify those individuals they expect will be less likely to respond to your mailing. Armed with this information, you can simply drop the lower-scoring names from your mailing. Alternatively, you can replace these names with other names the modeling organization predicts will be more responsive.
Two case studies show the potential impact of merge purge modeling:
- Increased Acquisition Revenue: A nonprofit organization focused on growing their donor file replaced 90,000 records that were predicted to perform poorly with the highest scoring names available from the modeling database. Overall response rate increased by 19% and the gross dollar revenues per mail piece increased 21%!
- Reduced Acquisition Costs: A merge purge optimization analysis showed that records that scored in the bottom three segments of the model for this nonprofit had a response rate 64% below average. When the mailer dropped the 49,000 records in these segments from its mailing, the number of new donors acquired decreased by only 3% while the overall response rate to the mailing went up 12% and the mailing’s ROI increased by 16%!
As these case studies show, modeling can have a fairly dramatic impact on the ROI of your mailings. We highly recommend, however, that you test the impact of modeling to ensure that this process pays out for your organization.
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