Data Sets & Data Models Explained
5 mins Read
/ Jan 20, 2022

When you work with Postie, you will often hear us talk about data sets and data models. When running a campaign, we usually suggest testing different data providers to see which one performs better. If you have been with us for a while, we might even recommend retesting a previously used data set. Yes, we know this topic can get complicated, so let’s break it down casual interview style.

Q: Can you please tell me more about data sets and 3rd party data providers?

A: Of course. As their name implies, data sets are sets of data that contain information on the US population. It helps to think of them as massive excel sheets with tons of rows and columns filled with raw data. Raw data can include a mix of demographic, spend, interest & behavioral information tied to a given individual.

There are several 3rd party data providers in the US, each with its own data set. At Postie, we work with three industry-leading providers: Acxiom, Epsilon, and Experian.

Q: Now, what is the role of data models?

A: Data models process and organize information; they use algorithms to identify complex patterns within the raw data.

When Postie builds a lookalike audience for a direct mail campaign, we run a Postie model. The model’s output ranks all the individuals in the addressable market based on how similar they are to your customers. Without the model, it would be impossible to build an effective lookalike audience.

Q: Does this imply that Postie has its own data models?

A: It certainly does! One of the things that set Postie apart is our proprietary modeling. We’ve made a significant investment in industry-leading technology, a robust machine learning platform, and a team of visionary PhDs to develop top-performing models.

So, while anyone can purchase the 3rd party data sets, the Postie data models are proprietary, and you won’t find them anywhere else. Additionally, we make a unique model for each data set to ensure we are leveraging each data set optimally.

Q: Can we go back to data sets for a sec? Why does Postie use three?

A: Good Question. There are two main reasons.

First: Just like diversity makes teams better, it also makes data science better! Each data set has unique features and strengths. For example, one might have excellent behavioral purchase data, while another might contain very accurate credit data. Using multiple data sets, we can access different types of information.

Second: This gets more technical: The way individuals are classified differs between data sets, meaning that the same individual can be described or identified differently in each data set.

An example can help; let’s say we want to see how Lebron James could be classified in two different data sets. Data set A classifies him as a basketball player for the Los Angeles Lakers, while data set B classifies him as an elite athlete that lives in or near a major metropolitan area. Both are accurate, but they are not the same.

Q: Why does it matter how Lebron James is classified?

A: It matters because it will make a difference when creating a lookalike audience. Imagine Lebron James is a customer within your CRM, and therefore the seed audience for your model.

Suppose you run a lookalike model using data set A. In that case, the model will prioritize identifying other pro basketball players who’ve played for Los Angeles Lakers, like Magic Johnson, Shaquille O’Neal, and Anthony Davis.

Now suppose you run a model using data set B. In this case, your lookalike audience will highly rank other elite athletes living in or near major metropolitan areas, like Tom Brady, Floyd Mayweather, and Simone Biles.

Let’s tie that back to your Direct Mail campaigns. There are some scenarios where you might want to find prospective customers that are nearly identical to your existing customers, but for other campaigns using a broader lens to find the best prospective customers could be wiser.

One Seed Audience Two Different Lookalike Audiences

 

This is why Postie uses a variety of 3rd party data sets and builds its own proprietary models; we have numerous levers we can adjust to optimize campaigns.

Q: Makes sense! So how do I know which data set to use?

A: Like any data, math, or science-driven enterprise will tell you, we won’t know until we can test it, and this is why we recommend trying different data sets. As a general set of guidelines, the table below highlights some of the differences between the data sets we consider when building a test matrix.

You can, but we wouldn’t recommend it. Four variables can change over time, making it worthwhile to retest in the future.

A. Decay in the model/data set combination:

Because data models rank the customers in a data set, you will usually mail the top-ranked customers when you start a campaign. As you mail more individuals, you go further down the model, and performance can eventually degrade.

B. Your CRM list:

The makeup of your customers changes over time. An updated CRM list might require a different data set that better captures the characteristics of your new audience.

C. The data sets: 

Every data provider updates their data sets multiple times a year. A new source of data can also impact your campaigns.

D. Postie’s models:

We are continually improving. As we gain new learnings, we adjust our models to optimize performance. A new model can significantly improve the performance of a data set, lifting it above another.

Q: That was great! Anything else I should know?

A: So happy that this clears things up. We have to admit that we did simplify how these data sets and models work for this explanation. If you have more complex questions, we can tackle them in detail with our data science team.

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With the holidays just around the corner, here are 3 Direct Mail campaigns that will help you boost sales this holiday season.

1. Lookalike Campaign

GOAL: Attract New Costumers

IN A NUTSHELL: In this campaign, you model a lookalike audience from the best performing customer segments in your 1st party data set. Using this highly effective methodology, you’re able to identify potential customers that share similar characteristics to your existing customers.

WHY IT WORKS: Your customers buy your brand for a reason. It may satisfy a need, ease pain, or provide value to their lives. Likely, your brand will also be attractive to people who are similar to your existing customers—finding as many of those people as possible is a perfect way to drive growth during the holiday season.

HOLIDAY TIP: Every lookalike model leverages a seed audience (from your CRM) as well as a 3rd party data set. Run a pre-holiday campaign in Q3 or early Q4 to test different data sets and then double down on the best-performing one.

 

2. Website Retargeting Campaign

GOAL: Capture Interested Customers

IN A NUTSHELL: These highly effective campaigns allow you to mail customers who have visited your website. Mail identity resolution technology lets you target both logged-in and anonymous visitors.

WHY IT WORKS: These campaigns work so well because they give a meaningful nudge to customers who are already teetering towards purchasing. In addition, the Direct Mail format drives higher conversion rates than email, making this a particularly effective tactic for the holidays when email inboxes are overflowing.

HOLIDAY TIP: Leverage programmatic triggers to mail based on specific customer actions taken on your website. It’s a best practice to target customers who abandoned carts as well as those that visited more than one page on your website.

 

 

3. CRM Purchase Anniversary Campaign

GOAL: Re-engage customers who purchased last holiday season

IN A NUTSHELL: This is a bottom-of-the-funnel campaign that drives incredibly high conversion rates by motivating repeat purchases from existing customers. Leverage your CRM list to specifically target customers who purchased during the holidays last season.

WHY IT WORKS: More often than not, satisfied customers are willing to purchase again, and it’s a matter of finding the right time and proper way to engage. With customers exposed to an endless stream of digital ads every time they scroll their feed, Direct Mail is a great way to stand out and remind them of your products.

HOLIDAY TIP: Sub-segment your CRM to identify distinct audience personas. Postie’s machine learning algorithms can cluster your customers into unique segments. This will allow you to personalize your Direct Mail campaigns with tailored creative and promotional offers, increasing conversion rates.

 

 

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Case study

Boost your conversion rate

A long-time staple of email and digital marketing, retargeting campaigns are the perfect way to reel in sales that didn’t happen.

Most marketers are familiar with the digital retargeting playbook, but few know that Direct Mail has also joined the retargeting party. Now you can elevate your retargeting game by reaching consumers with a physical piece of content that drives higher engagement and conversion.

Plus, you get to leverage all the digital retargeting capabilities like programmatic deployment and targeting anonymous (non-logged-in) website visitors.

As you get ready to fire up Direct Mail retargeting campaigns, make sure to consider these 3 critical decisions that can make or break your campaign:

1. Consumer Website Behavior

The first decision you need to make when setting up a retargeting campaign is who to retarget. For these campaigns, audiences are not built based on consumer demographics; instead, targeting is determined by consumers’ actions on your website.

Several targeting parameters can apply to these campaigns, such as the number of pages visited while on-site or where the consumer came from (traffic source).

However, the most important one pertains to how close the consumer was to making a purchase. Did they drop off after adding an item to their cart? Or did they browse and leave?

If you have enough daily site traffic, it might be best to start with an abandoned cart campaign as the return on ad spend should be higher.

That said, no matter which option you choose, make sure the creative and offer consider your consumer’s on-site behavior.

2. To Go Broad or Go Narrow

Once you have settled on the targeting parameters, you must decide what to spotlight on your Direct Mail postcard.

An option is for brands to design one standard creative piece for all their retargeting efforts. The piece generally features evergreen brand creative or focuses on a hero product.

However, there are other alternatives. For brands with different product segments or a wide variety of audiences, tailoring creative to a specific product category might be more efficient. For example, if you sell both men’s and women’s apparel, you would be wise to send a menswear creative piece to the people who visited men’s product pages.

As you can probably imagine, you can go as specific as you would like with your creative. It’s possible to customize Direct Mail pieces for each one of your products and trigger campaigns based on visits to specific product URLs.

However, while that strategy might sound like a great idea, the customer receiving the piece can perceive it as invasive. Not to mention that this strategy also requires significant creative and design resources.

It’s probably best to analyze your unique situation and evaluate what makes sense for the consumer shopping for your brand while also considering the amount of site traffic and internal resources.

3. When to Retarget

One of the great things about Direct Mail retargeting campaigns is that they can be integrated into other elements of your customer journey.

We all know that sending an email is free, so it may be best to retarget via email before sending Direct Mail.

You can easily set up a delay trigger on your Direct Mail retargeting campaign. You first retarget customers via email – within a few hours – of their site visit. Only If they don’t convert, then do you send a Direct Mail postcard 2 days later.

There isn’t a one-size-fits-all solution to Direct Mail time delays. It’s important to consider how long consumers are in the market before purchasing your product and what other retargeting efforts you have going on.

While you want to make sure you don’t miss the purchase window, you do have the ability to synchronize the Direct Mail campaign with your other marketing efforts.

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This stays between us, Direct Mail is marketing’s best-kept secret. Direct Mail has always possessed unique marketing advantages that other channels can’t offer, and now with Postie, its capabilities are even stronger! Check out 7 facts that will give you a glimpse into Direct Mail’s superpowers.

1. You can’t out-reach Direct Mail

Direct Mail can be sent to every household in America – even one floating on a lake-  making it the highest reaching marketing channel. That translates into an addressable market (+18-year-old) that is ~20% higher than Facebook’s. Case in point. You’ll find customers through Direct Mail that you won’t find on other channels.

2. 17 Days > 17 Seconds

The average lifespan of Direct Mail is 17 days, while the average lifespan of an email is less than 17 seconds. That is a potential, key word “potential”, +24,000 minutes of additional exposure for a printed piece vs a digital ad.

3. Direct Mail is good for the memory 💪🧠

3 out of every 4 consumers can recall a brand after receiving a piece of Direct Mail. However, under 45% of consumers can do the same after seeing a digital ad.

4. Highly targeted lookalike models are a click away

Postie has developed a Direct Mail data management platform that integrates industry-leading data sets with your CRM. The result: Smarter targeting. You can instantly create modeled audience from over 250 million US consumers that resemble your best performing customer segments.

5. Consumers don’t usually abandon their homes

You probably knew that, but did you know that 57% of email addresses are abandoned because the user receives too many marketing emails? Oh, and did you also know that you can reach that 57% through trigger-based Direct Mail retargeting campaigns?

6. He is not the only one ⬇

 

Almost 70% of people check their mailbox daily and over 80% look forward to seeing what they have received in the mail. Who doesn’t love mail? (Except for bills. And Postie doesn’t send bills.)

7. Real-time attribution & live KPI dashboards have joined the party

Long gone are the days when you’d have to wait months to get results. On the Postie platform, you can track the KPIs that matter (CVR, CPA, ROAS) in real-time, get instant insights and optimize campaigns in minutes, just like you would with any other digital platform.

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