The Ring of Truth

Feature Films for Families has built an 18 million-name database, consisting of 7 million customers and 11 million prospects. These prospects come pre-qualified, after a fashion: They've all been recommended by existing customers, who allow the Murray, UT-based family entertainment firm to use its names during introductory calls.

“When you call on the phone you are a stranger, and you have to fight the credibility issue,” says CEO Forrest S. Baker III. “If you have a referral, [prospects] will take 90 seconds or two minutes and listen.”

The company fell into this strategy by accident. Its original marketing strategy consisted of pulling names from a telephone directory within a high-likelihood area and systematically calling each house.

“We had a fairly good success rate of about 10% to 15%,” he says. “But consumers would say ‘You ought to call so and so — and when we did that, 50% of the homes bought.”

The company doesn't even give a reward to customers for recommending prospects. They once tested this, though. “Customers said they were offended,” Baker notes. Instead, sales reps talk with prospects about the need for entertainment with strong traditional values, and customers willingly suggest additional prospects.

The company's focus on telemarketing is so concentrated that when its Web site captures prospects, it asks only for their telephone number, and not their mailing address or e-mail address. This reliance on telephone sales is largely dictated by its business model — it only has the right to sell the films it doesn't create by phone, and does virtually no prospecting direct mail or e-mail marketing.

The 11 million prospects represent more telephone numbers than the company's eight call centers (six in the United States, one in Toronto and another in Manchester, England) can keep up with. As a result, when people move it runs the risk of losing the ability to contact them.

This makes access to first-rate phone data essential. Even with trained operators taking the prospect information, there were mistakes, such as the occasional mistranscribed number, or customers giving incorrect or out-of-date information. Standard change of address updates yielded only a 2% to 3% match rate.

“NCOA was spectacularly unsuccessful,” Baker says. “Don't ask me why.”

In May 2000, Baker ran 250,000 seemingly dead-end leads — both prospects and existing customers — through Experian's Address Update program. According to Mike Bills, vice president of information systems at Feature Films for Families, the service yielded 42,071 usable telephone numbers. These reactivated customers have purchased $1.2 million in products — and are still valid targets.

Bills was pleased with the results, but less so with the price tag. The quarter-million-name file had cost Feature Films for Families $180,000.

Furthermore, the file Experian returned contained more information than was needed, including a full contact information history and Social Security number for each prospect.

Because of this, Feature Films for Families held off on submitting more segments to Experian until June 2002, when the Costa Mesa, CA-based information provider asked Baker to test its new TruVue product.

The price was right — 1 million names would be analyzed for around $20,000. TruVue provided updated information on 400,000 individuals. Feature Films for Families has since dedicated 19 sales reps to renewing contact with these customers. Through December it had confirmed nearly 200,000 new telephone numbers, and Bills hopes to verify at least 100,000 more.

To date, the company has generated more than $1 million from these recontacted customers — equaling what it realized on its earlier test, albeit on a file four times as large. But that's after one sales cycle. Feature Films for Families makes four efforts per household each year.

The company can receive additional updates on any customer it submits whenever the customer moves. TruVue assigns consumers within a data file a unique identifier code, allowing marketers to monitor address changes.

“It is a linkage technology, and not a list source,” explains Denise Hopkins, director of strategic marketing for Experian's database solutions division. “We use TruVue when there is an existing relationship with a customer or prospect.” Furthermore, TruVue customers have to be willing to extend credit to their prospects.

This is especially helpful with younger families, which are fertile sources of customers. A family with a new child may move into a new house, lowering their potential creditworthiness score. But if Feature Films for Families has followed a prospect from a previous address, and knows the prospect was at that address for a while, it can adjust the credit risk score upward.

“The next phase will be to look at information in [Baker's] database and provide intelligence on individual consumers, as opposed to households,” Hopkins says. “That will be key for him in terms of his family focus.”