Database Marketing Strategies That Work

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You're finally about to take delivery of your marketing database. You've cashed in all your chips, and the moment of truth has arrived. Now what?


Since we all know there are virtually hundreds of ways that a marketing database can make a contribution to your organization's bottom line, all you have to do is pick the ones that will have the biggest impact in the shortest time. Here are 10 proven strategies:


Seek out axes to grind. Find the people in your organization whose jobs will be affected most by the new capabilities your database is going to bring to the enterprise and make them your allies. You can win them over by letting them have some input into and control over how the database is constructed and what it will be designed to do. Let them tell you what they need, design solutions for those needs into the data model and, most importantly, make sure they get credit for their contribution.


Provide an immediate and ongoing information flow. Nothing generates information of real value to an organization better than a marketing database. Take advantage of this by designing, producing and distributing a series of meaty and meaningful reports produced in conjunction with each database update. Place the emphasis on metrics that measure things that contribute to cash flow and profitability, especially if the data is not available from any other source. Your objective should be to turn the database into an information utility.


Track customer behavior. In almost every database application I've been involved with, the first cross-sell report has produced some surprising information. Invariably, some of the managers in the company will have erroneous, preconceived notions about customer behavior before a database goes live. The places that you are most likely to find these gems of information are in reports that measure cross-selling activity, best-customer attributes, the relationship between responses and conversions in sales efforts as well as in reports that measure and quantify the effect of customer retention and attrition.


Find a nugget. There is usually a single piece of previously unknown information in a marketing database that can have a big impact on the business. What you'll be looking for is something new and completely nonintuitive. It can be found by data mining tools or an analyst who has a good understanding of how the business works, coupled with patience, a healthy curiosity and a willingness to chase an emerging information trend to its conclusion. Once you find it, merchandise it.


Look for nonobvious internal applications. Everyone expects a marketing database to impact traditional marketing channels, such as direct mail, telemarketing and other forms of direct customer contact; and, of course, you should concentrate on those opportunities.


But there are other, less obvious applications as well. For example, making historical information available to your customer service or support center can almost always result in better service to the customer. And, if there is a way to merge that same customer history with your field sales force automation application, you'll make the salesperson's job a lot easier.


Improve processes. A marketing database often can make a significant contribution to an organization's basic business processes. For example, if your company sells through dealers, information generated by a marketing database can help the company do a more intelligent job of dealer loading, getting inventory out of the warehouse and onto showroom floors in advance of significant selling seasons. Similarly, the rapid access to specific customer segments afforded by the database can have a real impact on time-to-market and product testing cycles.


Model your best customers. Once your database is built, you should model the behavior of your best customers and use the model to identify other customers (or prospects) in the database who have a propensity to behave the same way. Because this will involve additional dollars, it should be built into your initial database creation budget. A response model that makes your direct mail work more efficiently will probably be most helpful to your immediate marketing activities.


Humanize CRM for top-tier customers. Not all customer relationship management requires the use of multimillion-dollar tools. Sometimes, very simple CRM tactics can produce enormous results. For example, I've always advised banks to create a best-customer list sorted by branch, and to post the names of those customers in the back offices or lunchrooms of the branches where the customers do business. Some very good bank customers rarely visit a branch, and when they do, they should be recognized as such. The strategy also includes finding the 25 to 50 very best customers and assigning them to the bank's vice presidents to deliver attentive and personalized services. Every business has a small number of very good customers who can impact the business. Use your new database to find them - then find ways to serve them better.


Set up a customer communications matrix. A matrix approach to communications uses the "sense and respond" capabilities of a marketing database to maximum advantage. Each time you update, look for all the events you can think of that should trigger communications - a new customer, a new purchase by an existing customer, a significant shift in a customer's use of services, a closed relationship or the anniversary of a relationship - and send personalized letters appropriate to the event.


Develop and implement a program of quick hits. This strategy will help you prove that the database can both reduce time to market and capitalize on sales opportunities. Isolate a maximum of five or six tactics that can be implemented rapidly once the database goes live and be poised to pull the trigger on them immediately. For example, if you've modeled the database, try sending a rank-ordered customer list to the field or sales force.


If you have an annual sale, find the customers who always buy at sale time and concentrate on them.


If your customers have to periodically renew their relationship with you, get a series of renewal and cross-selling sales messages to them ahead of time, rather than just reacting if they don't renew. And if you're not sure how to isolate the tactics most likely to work quickly, ask your salespeople, agents, dealers or branch managers. Almost always, they'll have ideas that can work.
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