How Cooperative Are Co-op Databases?
By Hallie Mummert
Industry experts get into the pros and cons of this prospecting and analytics tool
On the surface, participation in a cooperative database sounds like an absolute no-brainer. Merging your customer data with that of other direct marketers to develop more robust models that enable you to prospect more effectively than you could with only your own data to go on—what could be more intuitive?
Scratch a little deeper, though, and you begin to realize that this sweet-smelling rose also can have thorns. Depending on how a cooperative database is governed, list managers and list owners cite risks such as unfair competition, the inability to withdraw their data from the co-op in the future, and a lack of insight into what's driving the performance of co-op names.
On the flip side of this co-op coin is the immense analytical insight offered by many of the co-ops. More than a few list owners find benefit in being able to access competitors' lists in a blind environment (where name source is not identified). As Stacey Hawes, vice president of B-to-B services at Abacus, a direct marketing data and services provider in Broomfield, Colo., noted in a panel session at DMA•05—How to Use B-to-B Co-op Databases to Boost Growth—some lists are available for modeling via a co-op that aren't placed on the open market for rental because the source is kept private. Abacus offers private co-op databases for both the B-to-C and B-to-B sectors.
The upshot is that each direct marketer must assess the associated benefits and risks of co-op database participation. Discussions with several list professionals who play various roles in the list analysis and procurement process resulted in the following set of questions to ask when you're considering how to best work with co-ops. Use them as a framework on which to build your knowledge of how each cooperative works, which in turn will help the managers of these data tools better direct their efforts to meet your business goals.