The Road to Customer Optimization

Share this article:

In an era of message bombardment, spam and increasing consumer control, one thing is certain -- relevance rules. The ROI of relevance is well documented. A recent study by JupiterResearch found relevant campaigns increased net profits by more than 18 times that of batch-and-blast or mass marketing mailings. But to be relevant, marketers must leverage their most valued asset - consumer knowledge and data.

In an ideal world, your marketing systems would seamlessly access data from your CRM system, eliminating the need for data duplication. However, in spite of several attempts by CRM vendors and product expansion from marketing technology companies, most marketers have found that their systems have diverged from their marketing technology platform.

In addition, the unprecedented growth in data volume has led many to focus more and more on data management rather than data mining to optimize their customer relationships and marketing ROI. In fact, according to Forrester Research, the average data warehouse has increased from one terabyte to over 2.2 terabytes in size, representing a growth of more than 100 percent in the past 18 months. At the same time, the complexity of e-mail marketing continues to evolve as the average e-mail database expands exponentially with additional consumer preferences, behaviors and purchases captured online. This abundance of information has fueled additional testing and dynamic capabilities aimed at improving marketing ROI that was never before possible.

As a result, if you are like most other marketers, you are currently faced with one or more of the following situations:

a. You are transferring way too much data, way too often, to your e-mail vendor or your e-mail system;

b. You are not able to use all the data sources you'd like to use for your e-mail marketing campaigns; or

c. You are able to use most of your data sources but your campaign process takes way too long because of the lead time required in assembling data from disparate data sources.

Organizing Multiple Data Sources

No matter which category you fall into above, the first step is organizing all of your data for a more complete view of your customers. Most marketers have multiple data sources for marketing campaigns ranging from mainframes to Web sites. Data from CRM systems, departmental databases, transactional databases and Web sites all feed into marketing systems that support outbound marketing campaigns. In the past, most marketers have created a data flow from each one of these data stores to the several others creating a 'star' like data map.

However, in reality, the amount of time required setting up and monitoring data feeds across many data stores all too often eats into the campaign planning process. This in turn prevents marketers from focusing on their core targeting and testing objectives.

As a result, many leading companies have migrated to a 'hub-and-spoke' architecture in an effort to create a 360-degree view of the customer. In this model, all data stores feed relevant data to the hub in an automated fashion from where appropriate elements are fed to campaign or marketing systems. In some cases, the data stores form the backend data warehouse for the corporate CRM system and/or campaign management tool directly, without the need to set up data transfer processes. This is typically the case when the CRM system or campaign management tool is customized software hosted within the network. Modeling activities are conducted in this central marketing repository as well.

Another increasingly popular option replaces the data warehouse with a middleware application that has modeled the data warehouse using meta-data. Marketing platforms make calls to this middleware application, which in turn fetches the data from appropriate data sources on the fly. The drawbacks with this option are that it requires access to high quality engineering talent and has inherent performance risks.

Preparing the Marketing Data Warehouse for Customer Optimization

Another scenario is for companies to outsource the creation of the marketing data warehouse to a vendor that can offer best-of-breed campaign management along with integrated channel delivery tools such as print production and email deployment services. As we are beginning to see the evolution of such a seamless platform in the marketplace, here are five tips to help you prepare to leverage these solutions in order to further optimize your customer relationships and marketing ROI:

  1. Document data sources including data access constraints for each data store. Decide on unique identifiers for each customer to help you synchronize data across these stores.
  2. Define a master data source for each attribute. Make sure that data flows from this 'database of records' for all marketing purposes and that updates to this attribute from marketing activities flow back to this data store.
  3. Map out the opt-out management process to ensure that opt-outs are processed in time. To minimize the risk of being non-compliant with regulations such as CAN SPAM and Do Not Call, it is recommended that you let the channel data stores (for example, the e-mail marketing database for e-mail) be the database of record for opt-out for each channel. Feeds from each of these channels should be sent back to the central data warehouse if you are using a hub-and-spoke data architecture.
  4. Map out your data hygiene process. For example, in e-mail, understand how bad e-mail addresses are fed back to appropriate data stores. This includes syntactically bad addresses that can be identified during data load to 'fail to deliver' addresses that are identified after mailing attempts. Also standardize on data formats to maximize interoperability.
  5. Focus on integration and automation ease. Ask yourself what proven technology is available to make data transfer, integration and updating a seamless and painless process.

Most importantly, remember that no one said it would be easy. The promises that a single piece of CRM software would be the marketing organization's white knight have been soiled. However, the continued evolution of technology combined with market and consumer changes -- privacy, increasing consumer control, competitive and ROI pressures -- is fueling a sea of change. Marketers and companies are now re-thinking their data, marketing platform and integration structures. New solutions and approaches are addressing the needs and opportunities inherent in this new era of marketing from the perspective of both marketer and consumer, which, yes, can be aligned.

Savvy marketers have quickly realized with a little bit of planning around their data structure and marketing process, and the selection of the right tools and technology, they can once again concentrate on what they do best - building relevant interactive dialogs that are delivered, opened and acted upon. After all, isn't delivering timely, relevant marketing programs the best way to optimize your customer relationship and marketing ROI?

Ragy Thomas is CTO of Epsilon Interactive and Senior Vice President of Strategic Product Development at Epsilon. http://www.epsiloninteractive.com, http://www.epsilon.com

Share this article:
You must be a registered member of Direct Marketing News to post a comment.
close

Next Article in Data/Analytics

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

Featured Listings

More in Data/Analytics

12 Big Data Facts for Marketers in 2014

12 Big Data Facts for Marketers in 2014

The idea of Big Data is nothing new, but its potential to solve today's problems and spark innovation is unprecedented.

Harvard Prof: Marketers Need to Step Up Their Predictive Abilities

Harvard Prof: Marketers Need to Step Up Their ...

Statistics expert Edo Airoldi says data must be paired with predictive analytics before marketers can truly forecast customer behavior.

The (Marketer's) TV Guide

The (Marketer's) TV Guide

Public broadcasting station WGBH in Boston cleans up its dirty data and boosts donations.