Data Pools and Co-Ops for NFPs
Tuesday, 3rd September 2013 at 9:49 am
Organisations are more and more looking for data prospecting methods that incorporate their own data to leverage better ROI, according to Australian data pooling list supplier, List Factory.
If you ask a database manager whether their database is static and always stays the same with exactly the same customers and the spend is always the same – then they would say you are dreaming.
Direct marketers and fundraisers are constantly looking for ways to top up their donor database through acquisition lists – and looking for cost effective methods that deliver good ROI.
Data pools or data cooperatives are one of these methods that are familiar to the Not For Profit sector both in Australia and overseas – although not every charity looking to acquire new donors is across the ins and outs, and benefits and costs of this approach to data prospecting versus just “buying a list”.
1. What are data pools or co-ops?
In general terms – data pooling is a method of database compilation that merges various donor or customer databases into a single source of prospect data for direct marketing purposes.
It is a form of data sharing or list swapping in a managed 3rd party environment, and there are several different models or structures depending on key motivations.
The motivation for the not for profit sector is focused on accessing good, responsive data – so they can market to these prospects and increase their donors.
2. Data Pools vs Data Co-ops
The difference between data pools and data co-ops comes down to how they are built in the first place, and what are the motivations of the members.
Data pools are list products that are a compilation of customer and transactional data from companies in specific market sectors (i.e. like Mail Order, Merchandise and Publishing), and the product is marketed to non-competing market sectors for list rental use.
Data cooperatives are closed to only contributing data members, and are built using customer databases from members who are motivated by putting data into this environment to get accurate, responsive and ultimately cheaper data out for their own acquisition campaigns.
For both models, there are business rules that dictate how the data is utilised – and to understand this, you need to ask some key questions.
3. Data Credentials
From a data sharing perspective, contributing data to a data co-op comes with certain concerns and questions. Some of these can include questions surrounding how the data is managed – both digitally and physically by who and where:
a. Where is the data being stored?
b. How secure is the location where the data is being stored?
c. What are the database administration credentials of who has access to the data?
d. Is the data staying in Australia, or being sent offshore?
e. What secure protocols are used for transmitting data?
f. Are there rules around how often a record can be used?
g. How are privacy suppressions handled?
These questions and more will become increasingly relevant with the new Privacy legislation earmarked for adoption in the first half of 2014, as data compliance, storage and methods of collection will come under more scrutiny than before.
4. 3rd Party Privacy Compliance
When entertaining the idea of sharing data, the business needs to be across all their responsibilities and legislative compliance requirements under both current laws, and after new legislation comes in.
3rd party privacy compliance – and the ability to show this – is definitely key for data sharing techniques.
Advice and review is required to get all policies, disclosure statements, opt out methods, mail pieces, CRM systems, and other mechanics associated with data collection in a compliant manner first prior to entertaining data sharing in any form.
Legal advice is essential – however it does not hurt to ask independent professionals like list brokers or creative agencies as they probably have examples they can provide you as a benchmark or guideline.
Data sharing, data pooling or swapping have all been methods that have been utilised in various industry sectors over the years including charities – not everyone is doing it, however they are not isolated incidences anymore given the maturity of the industry and need to find the best data available.
Some independent advice from your list broker or agency might be able to help with providing some perspective on this process with their other clients.
And don’t forget – check your own internal legal policies and collection procedures thoroughly first.
List Factory is Australia’s leading and largest data pooling and data cooperative manager – we provide lists and data analytic services to a range of organisations who pool their donor or customer transactional information within a single database, and create sources of prospects for direct marketing purposes.
To find out more call us on +61 3 9017 9090 or send an email to email@example.com