Has the Golden Age Arrived?

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Marketers have entered a golden age of using gigabytes of inhouse and overlay data to send the right message to the right prospect at the right time -- all the time!


Now that I have your attention, and a few raised eyebrows, the more accurate statement would be that the potential far outweighs reality. Though armed with systems that can easily and inexpensively capture, store, analyze and retrieve data, too many marketers maintain a limited vision of what to capture and how to use it.


Help wanted: Database creative. Creativity -- so routinely applied to designing promotions, merchandising and other aspects of direct marketing -- falls notoriously short when the subject turns to databases. Many firms overlook opportunities to retain valuable data. Keeping detailed information on each inquiry or purchase transaction -- including date, amount, source and type -- and details on products purchased or considered are increasingly the norm. However, other available and useful relationship details that flow directly from customers often are unrecorded, unsaved or underused.


If I capture absolutely everything, how do I use it? Following are examples of the kinds of customer information too many marketers fail to capture, and how their retention could be put to profitable use:


• Customer service history can be used to provide better future service. Accessing details of past problems lets you acknowledge them and check their resolution during future contacts. It also allows you to estimate the impact that different service problems have on the lifetime value of customers. With this information, a better cost can be placed on the true impact that an out-of-stock, return or complaint has on your bottom line.


• Linking a file of detailed product information to customer data lets a marketer feature items or categories in which the customer has a proven interest. It also provides an excellent base for developing and targeting a spin-off or specialty business and to improve segmentation models and approaches to calculating the lifetime value of a customer. For example, if customers who initially buy products with certain characteristics prove to have a substantially higher or lower than average value, acquisition media can focus on better products to attract more high value customers, or fewer low value ones.


• Linking gift givers and receivers permits more effective solicitation of future orders, especially from givers who can be reminded of past gifts and receive better, more personalized follow-up as a result. Links between multiple addresses for a single customer allow more efficient mailings and improved deduplication with rented lists.


• Asking and recording answers to short, simple customer surveys is likely to provide more accurate and actionable customer insight than will most data overlays. At the same time, they avoid privacy concerns since answers are volunteered. Responses can lead to better segmentation models and targeting. They may even provide a basis to estimate probable answers from nonrespondents. This can be done by modeling links between sales pattern or history and answers to questions provided by customers who respond. If questions are brief and relevant, 50 percent or more of customers may answer.


• Information on other contacts your company has with buyers -- for example, those generated at retail, via a sales force or from "paper replies" (e.g., applications, registration cards) -- can prove helpful in many ways. They should lead to improved targeting and segmentation. They also provide an excellent basis for measuring the impact of direct contacts on sales via other distribution channels and on the impact the presence of these channels has on mail order.


Let's get personal ... As direct marketers continue their move into the information age, we need to make fuller, more productive use of our biggest competitive advantage -- the direct and personal contact we enjoy with each of our customers. Many of us have neither harnessed this advantage fully nor reaped the rewards of the declining cost of expanded data capture, manipulation and application. If you found yourself hesitating or unable to agree that many of the applications described here are captured and used by your company, perhaps its time to review how your firm uses its most important asset.


Robert Weinberg is founder of RW Consulting, Northfield, IL.
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