National student loan consolidation

Byline: BETH NEGUS VIVEIROS

A multimillion-piece direct mail campaign will drop this month to help launch Tuition Answer, a new student loan product from Sallie Mae.

The credit-based product offers loan assistance for all the costs associated with college, including tuition, housing and textbooks, according to Kaenan Hertz, marketing director for the Reston, VA-based financial services company. E-mail also will support the product's introduction.

Sallie Mae maintains a managed loan portfolio of more than $92 billion in student loans for over 7 million borrowers. The firm has home-loan and debt-management service businesses as well.

Three years ago, Sallie Mae began working to transform its database operations from a loan-processing system to a customer-centric operation. The process initially was tried in-house - "a nightmare" from an IT perspective, said Hertz. Outsourcing services to Harte-Hanks brought costs down and increased the turnaround time, he added.

Harte-Hanks hosts Sallie Mae's 17 million-record database, which is updated monthly. The file includes consumer and transaction data from numerous Sallie Mae-affiliated companies. Acxiom demographic and segmentation data is appended to the file. E-mail address overlays were tested, but Hertz said the company sn't sure it's worth the investment for the return.

Sallie Mae's database includes postal and e-mail addresses, source of name and loan, loan amount and status, life-stage coding from Personicx, channel contact preference and contact history.

Major goals of the database marketing initiative include brand reinforcement, cross-selling, and, most importantly, retaining the current customer base. While Sallie Mae doesn't typically market to other companies' loan clients for products like loan consolidation, other firms do actively solicit their client base, according to Hertz.

Several internal clients use the database, including loan products, home loans, servicing, government relations, strategic planning and corporate communications. Considering that all these departments deliver a total of 8 million to 10 million e-mails per month, the risk of fatigue is high, said Hertz, speaking last month at the National Center for Database Marketing conference in San Francisco.

Keeping creative fresh, Hertz added, is key to helping stem fatigue. Most of Sallie Mae's e-mails are in a simple and straightforward letter format. To keep track of creative, the company has a subject-line database. The test cycle of a winning subject line vs. a "challenger" is typically as short as a week, he said.

In addition to other contacts, Sallie Mae sends two e-mail newsletters each month, TrueCareers and Wired Scholar. Hertz noted that the company tries not to use telephone numbers as response mechanisms in e-mail communications to avoid hard-to-handle call center spikes.