Everything I Need to Know About Segmenting Customer Data I Learned in the New York State Senate

By Scott Gershwer

The 2^nd Annual Transpromo Summit is to be held in New York in early August; I’ll be on vacation, as I was last year, but I took a look at the agenda to see what I’d be missing. One might assume that everyone knows all about Transpromo at this point because it’s been a big topic for awhile now; however, at Xplor in Boston I was a surprised that many attendees weren’t yet up to speed on it. It’s probably more well-known in the marketing community than it is in IT and operations.

One of the more intriguing aspects of transpromo is the question of how to create a multiplicity of personalized marketing messages and campaigns to run on an individual bill or statement without driving your IT staff crazy. In some respects it’s a creative challenge but it’s also poses technical challenges.  At the very core of this question is how to segment customer data in order to drive numerous relevant and targeted campaigns. If I were going to the Transpromo Summit I’d be sure to attend Overcoming the Data Challenge, a session given by Jim Gabalski of Emerge Partners.

I learned a little bit about using simple segmentation from New York State Senator Carl Kruger (D-Brooklyn), an astute politician, dedicated public servant, and brilliant exploiter of the postal communication channel. I worked as Senator Kruger’s Director of Communication for six years and wrote the copy for hundreds of targeted mail pieces. We learned lessons from every mailing we did together and got more and more sophisticated about using postage wisely, about targeting based on constituent interests and issues, and about convincing people to take action as a result of receiving a mail piece from us. The rules state that an elected official can never ask for votes directly and of course we weren’t selling anything but our own free constituent services but we became good at using data in a short period of time.

First, some background: Brooklyn, once the fourth largest city in the USA, was incorporated as one of the five boroughs of New York City in 1898, a move made possible by the building of the Brooklyn Bridge that same year. The creation of New York City was driven by the Republican-led state government in Albany. Brooklyn has been a poor step-sister to Manhattan ever since and, not coincidentally, has voted Democratic in every election since that time. There is such a high concentration of registered Democrats among Brooklyn’s four million plus population that it can easily swing a statewide election and makes even presidential elections a foregone conclusion. Republicans have long despaired of winning New York State largely based on Brooklyn being a “blue” borough.

That said, there is virtually no chance that a Republican opponent could ever unseat an incumbent Democrat in Brooklyn; Senator Kruger’s GOP opponents routinely lose by 80+ percentage points and over 20,000 votes; his hapless opponents have included such luminaries as the guy who used to put on an Indian headdress and lead cheers during Rangers games at Madison Square Garden. In other words, the Republicans don’t even bother.

Any effective challenge would come from within the Democratic Party itself, which makes the September Primary much more important than the November general election. So when we segmented our constituent base for mail, the first thing we looked for is whether or not a person is likely to vote in the primary. We referred to these people as being on our “prime” list. It was largely based on a constituent’s level of involvement with our office. We considered those individuals who used our free services—from getting their blood pressure taken to attending NYPD-sponsored seminars on how to burglar-proof your home—as our “prime” constituents and hoped that they would remember us every other September in the primary.

And we offered a great range of free services in order to bring in the widest range of constituents. Senator Kruger missed no opportunity to convince local businesses to contribute their time, expertise and special services for the good of the community. Local hospitals sent nurses to screen blood pressure and blood sugar; optometrists gave free eye exams; dermatologists screened for skin cancer, podiatrists looked at feet…firemen, cops, local ambulance corps, real estate brokers, estate planners, investment bankers, boating safety experts—everyone was expected to contribute. No one ever got paid for these sessions—they did it in order to give back to the community. And the community loved getting them. 

Each service was given a numerical code or tag that could be added to an individual’s file so we would know what their interests were. We used a computer based system that I’m sure is by now obsolete but was nonetheless highly effective. It was essentially a database of all of our constituents—their names, addresses, etc. The system gave us the ability to “tag” them using issue codes. The more issue coded tags they had, the more loyal we hoped they would be and the more targeted communications they received.

Each of the 62 NYS senators has a franking budget. As long as the postage held out we could send out as much constituent mail as we wanted. Senator Kruger was a saber-toothed tiger when it came to maximizing postage: we sent all of our mail at standard class (bulk) postage rates; if a mail piece went out full first class without discounts he would go beserk. He was very hands on about making sure that if we needed to use first class postage that it was discounted to the highest degree possible.

It’s noteworthy that Kruger understood the value of clean name and address data to his postal budget before most businesses did. He read the USPS regulations and could recite them chapter and verse. After leaving his employ I marketed data quality tools for several years and at that time most executives considered the waste of “Undeliverable as Addressed” mail a cost of doing business. They seem to have caught on now but Kruger was well ahead of the pack when it came to data quality and postage optimization.     

In any event, if we weren’t going to use up all of our postage, fine-tuning was a priority.  Most senators send out two pieces a year and they send it to everyone in the district. We decided that we would use a PR strategy--local newspapers and community events—for outreach to pitch our district office services but only use the mail for constituents with whom we had a relationship. We had virtually unlimited access to the graphics department in Albany to create constituent newsletters, mail pieces and postcards and we kept them very busy. My efforts in constituent communications probably took up seventy-five percent of his annual budget. One year he dismissed his chief counsel and traded his pro-rated salary to obtain a larger postage budget. The rest of his budget went to more constituent services.

We had a wonderful staff of six people handling various aspects of community service—one staff member was dedicated senior citizen matters; another built an amazing rolodex of city and state officials to help cut through bureaucratic red tape; someone was always on hand to help the growing Russian population (although when they attained citizenship the Russians tended to register Republican out of gratitude to Ronald Reagan for bringing down Communism). And, most important of all, we had a lawyer who was an expert in Consumer Affairs. She was tremendously effective; in fact, Senator Kruger’s Consumer Outreach Program is a model for anyone interested in providing top notch community service.

She was at her best when an Insurance company was denying needed medical benefits to one of our constituents (in time, word of mouth spread and we helped out families in other districts). Of course it helped that Kruger was a ranking member on the Insurance Committee. They had to take his calls. But she was always on the phone arguing with insurers and regularly testified on matters of insurance at City Council and State Government hearings.  

And everything we did, every finger stick and elderly person who got a pre-FDA-approved cancer treatment, every battle Carl fought with realtors and every service that was offered, we got names and addresses and tagged them accordingly in our database. We had interns from the local high schools sit at the computer for hours tagging files. And the prime list was built in this way—if you weren’t on that list you weren’t getting mail. You got mail based on what service you utilized: medical, insurance, crime-fighting, public safety, fire, education, higher education and so on. We got a few complaints from people that they didn’t get a mail piece—we created a tag for them.

If the local police came in to give tips on how to make a house burglar-proof, we tagged the attendees as our “Law and Order” list.  If they got their blood sugar checked it was “Health Care 3.” We probably amassed fifty or sixty tags. When Carl broke rank with the Democrats to endorse Rudy Giuliani for US Senate over Hillary Clinton (making International news and getting on Crossfire, Hard Ball and O’Reilly Factor all in the same night) we tagged both those who were for us and those who were against us. We had boaters, fishermen, basketball players, Education, Insurance, Finance and fifteen different tags for seniors, our most loyal and dependable voters.

Whenever I created a mail piece or a pamphlet I could wash tags over tags and fine-tune the list before sending. It stretched our postal budget considerably. After a while we had our own graphic artist on call in Albany to take my pencil-drawn layouts and render them in ink. While most of Carl’s colleagues sent out one or two generic newsletters a year to their entire constituency, whether they knew them or not, we kept a steady flow of varied and targeted mail pieces using the same exact annual postage. Carl’s colleagues couldn’t figure out how he did it—and they had access to the same system we did. We had a viral word of mouth campaign and a PR strategy and used the mail for Transpromo long before it has a name. Kruger was visionary.   

And of course his office is impregnable. No one from either party dares to oppose him in his district. He may not be popular in Albany—he’s a maverick and has alienated the Democratic leadership with some of his votes—but I hope he runs for higher office. He’d be a great Public Advocate--or Borough President. When he does, the people he serves are going to get great services from one of the finest public servants ever to hold office.

And they are going to read all about it in the mail.