Valassis Eyes Database Mining as Next Step

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Coupon distributor Valassis Communications Inc., Livonia, MI, is seeking to add database mining to its expanding repertoire of marketing services, a spokeswoman said after this month's agreement to partner with Exchange Applications Inc., Boston.

Valassis, which primarily prints and distributes newspaper coupon inserts, will offer more targeted marketing services to retailers by tracking customers' coupon use and helping them customize their marketing efforts based on individual consumers' shopping patterns.

In addition to the Exchange Applications alliance, in which Exchange will be the preferred technology vendor for all of Valassis's customer-relationship management efforts, Valassis also hopes to use its variable-printing capabilities and its Aztec Code technology -- which allows it to embed personalized information into the bar code on coupons -- to develop more sophisticated and targeted promotions for its retailer clients to reach their customers.

"Retailers have these loyalty cards, but they are not necessarily building loyalty," said Lynn Liddle, a spokeswoman for Valassis. "They also are spending billions of dollars on flyers that go to your house that have nothing to do with that data they have collected. The screaming need in the industry is to turn that data into real information for the retailers so that they can turn you into a more profitable customer for them."

Liddle said Valassis eventually would like to add data-mining capabilities so that the company can combine campaign management with the ability to use an inference engine. For example, a supermarket customer that buys hot dog buns every week but not hot dogs could be targeted with coupons for hot dogs, but not for buns.

"Database mining will give us more sophisticated levels of marketing and promotion," she said, adding that the company will probably partner with the database-mining company rather than make an acquisition.

For now, Valassis hopes to work with some of its retailer customers who have been interested in doing more sophisticated database work to create some longer-running campaigns using the Valex campaign-management software from Exchange Applications. The software allows Valassis to analyze shopping information databases for retail marketing opportunities and then prioritize potential marketing investments according to projected returns on investment.

Liddle said Valassis is "about a quarter of the way along the continuum" in its quest to be a full-service customer-loyalty marketing services firm. The company brands its customer-relationship efforts as its Customer Attainment and Retention System, or CARS.

The company also hopes eventually to incorporate Web-based promotions into its array of customer-service offerings. It has a 50-percent ownership stake in, an Internet coupon concern.

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