How to Evaluate Service Bureaus (1,440 words)
By Jim Wheaton
I participated in a comprehensive evaluation of service bureau capabilities back in 1986, and then again last year.
Last year, I wrote a Request For Proposal for a client and received nine written responses from service bureaus. The participating bureaus represented a complete spectrum, from the largest organizations to a couple of regional niche players. Ultimately, we interviewed four companies and invited three to participate in a test job.
1986 vs. 2000
It was fascinating to witness the changes that have transpired in the intervening 14 years. Data and reports, for example, generally now are transferred electronically and often in the form of Word and Excel documents. However, the evaluation also confirmed my long-standing impression that, in many ways, the service bureau world is stuck in a time warp.
Processing, for example, generally is still performed on mainframes, and some of the record matching algorithms basically are unchanged. More importantly, many service bureaus haven't fully confronted the challenges of today's dynamic database marketing environment. Often, account people operate as reactive order-takers rather than proactive strategic partners. Generally, these people have never been direct marketers, and often view their assignments from a narrow processing perspective.
Typically, whenever an account rep encounters a job request that can't be handled by off-the-shelf application software, he or she forwards it to the service bureau's standalone programming department. Invariably, the programmers have even less exposure to direct marketing than the account people. Often, they're also faced with a backlog of programming requests. This can make it difficult for them to complete their assignments accurately and on time.
Some service bureaus have differentiated themselves by enhancing their merge/purge algorithms to such an extent that they're able to squeeze a couple more percentage points of deliverable, unduplicated records out of the raw names and addresses they process. During the evaluation, for example, one firm introduced us to a separate specialist for each major merge/purge function. Throughout the presentation, the focus was on the small increments of improvement that could be had by placing one's business with this service bureau.