The U.S. Postal Service awarded Paragren Technologies, Reston, VA, a multiyear contract to manage its business-to-business and business-to-consumer marketing databases as part of its plan to create an integrated database marketing infrastructure.
Paragren's work, however, will be just part of the postal service's overall DM effort. While Paragren will handle database marketing and analytical modeling, the USPS will work with Harte-Hanks, Austin, TX, for telemarketing and fulfillment. All of these systems will be linked so the USPS can seamlessly input customer data from its call center operations into the depository created by Paragren.
Before using this system, the USPS worked on database and direct marketing programs with another telemarketing and fulfillment vendor.
USPS also worked on direct mail, direct response radio, direct response TV and direct response print with four advertising agencies: Foote Cone & Belding, Young & Rubicam, Draft Worldwide and Frankel. Besides executing campaigns, these agencies — which are segmented by USPS product line — are responsible for using lists to help the USPS decide where to target its direct marketing campaigns.
These agencies still will be used to execute direct marketing programs, to develop creative concepts and to choose lists. However, the new database marketing system will allow the USPS to provide them with responder knowledge of customers and overlays that it will glean from its database.
“The agencies will still use lists, but we will have a file that will give us an indication of customers' buying habits so we can tailor and target and build more of a relationship marketing environment with customers,” said Tina Lance, manager of direct marketing at the USPS.
In addition, she said, “the USPS will be the integrated, fine-line thread that connects all four of those agencies together.”
Four months ago, the USPS submitted a request-for-proposal to several database marketing companies, and Paragren won the account.
The USPS is using Paragren's One-By-One suite of software products, which includes its Data Discover software that extracts data from data warehouses and delivers it to statistical analysis and data mining tools, and its Campaign Manager program. It also is using Paragren's professional database services to build a database with a variety of data sources and then develop and execute direct marketing campaigns with utility tools. And, finally, it is using Paragren's outsourcing operations to physically run USPS' database.
The first phase of implementation, which began on Oct. 20, will last about 12 weeks.
For starters, the USPS and Paragren will look at profiles in USPS' existing BTB customer database of 2 million to 3 million businesses to decide what logical segmentations fall out of these profiles. Paragren also is helping the USPS profile response histories gleaned from past campaigns.
Paragren is building an Oracle database for all of this data, which will be housed on a large Window NT server at Paragren's' facilities, where USPS database managers can to access it through Windows 95 client workstations and browsers.
“We are already in the process of designing databases [for the USPS], and we will be building them over the next several months,” said Dan Lackner, chief operating officer at Paragren. “The expectation is that we will have a campaign up and ready to go in about 12 weeks.”
In addition, Paragren is using Web-based OLAP tools to build analytic data sets for these initial segmentations, which means the USPS can access this data housed at Paragren's facilities by keying a password into a Web page designed by Paragren.
“This will allow us to have information or data at our fingertips, whereas, in the past, we have not had that ability,” Lance said. “We will be able to go right to our PC and access data and look at current campaigns and historical data, and then do some modeling that will give us the ability to make better decisions in our future campaigns.”
The second phase of the project will let the USPS use campaign management software for segmentation and build a campaign history table to track responses. It will also allow the USPS to add enhanced data from other data providers and overlay data from USPS' call centers.
“[The USPS] is coming to us looking for support across both the whole data discovery and the whole campaign execution side,” Lackner said. “A lot of people come to us and say that they know everything they need to know about their customers, and they just want to send [out mailings]. But the postal service is basically saying to us that it wants to learn more about its customers before it starts going out there dropping campaigns.”
