Use data effectively to breathe life into prospecting: DM Days panel
NEW YORK - Panelists at the Direct Marketing Association's DM Days Conference and Expo discussed data and how to use it effectively. Attitudinal, ethnic, health, travel, purchase and behavioral data, if used effectively, can breathe new life into a marketer's prospecting efforts, CRM initiatives and new-product development.
The panelists all agreed that data-driven customer-profiling translates into revenue.
"The world of data is exploding," said Fran Green, chief revenue strategist at ALC. "Data bridges the gap between creativity and accountability. Lists and database applications are also exploding."
Rebecca Jewett, managing partner at Windward Group, talked about external and internal analysis and the importance of understanding it and using it for strategic intent.
"Define strategic outcomes by year, integrate tactical plans functionally and ensure alignment across function," Ms. Jewett said.
Common challenges are figuring which segments to target for acquisition, reactivation, increasing loyalty, reducing attrition, and matching voice and direction.
But doing all of that is crucial, and a good financial model could be the answer.
"Most companies that are doing lifetime value calculations are doing it wrong," Ms. Jewett said. Common mistakes include selecting the wrong investment level, using averages instead of actual cost by segment, not including marketing costs, using probability for sales and returns and not allocating sales.
"Instead of using probability for sales, take a look at the sales for the same period only in previous years," Ms. Jewett said. "A historical look is more predictive of the future."
"All data is not created equal," said Tim Prunk, CEO of Vistrio. "All customers are not equal either."
Many companies are using a single dimension as a means for both valuing and distributing customers. Customer value is generally calculated based on frequency and spend and in many cases just the value of the first transaction.
"Few mark programs vary offers and creative to customer segments based on some level of customer value or preference and almost never by channel," Mr. Prunk said.
He said that the customer experience itself is often determined by a single measure of value, generally price reduction or free shipping with the same offer.
There are a few drawbacks to the fact that not all customers are created equal.
"Simple valuation can be misleading in terms of potential spend and general loyalty," Mr. Prunk said. "The goal is to evolve from a one-dimensional tier to multidimensional portraits."
Multidimensional portraits include behavioral, preferential, patterns and propensity, discretionary spends ability, interest and lifestyle, where they live, work, go.
But there are challenges like insufficient and inconsistent measurements, conflicting priorities, resource limitations, bias towards action and numerous operational solos.
"Deep customer knowledge and actionable insight can help overcome these challenges,' Mr. Prunk said.
Patrick Hanrahan, president of Eagle Eye Marketing, Group talked about maximizing profit and keeping the big costs out of house.
Data can be analyzed using every possible source, Mr. Hanrahan said. The question is, there is so much data so which do you use?
Build a model to predict conversion, Mr. Hanrahan suggested. He said that aggregating multiple data sources works at times.
"A comprehensive perspective on wallet-share provides a means to categorize each customer's potential value," Mr. Hanrahan said. "After that, score and grade. This makes it easier for the sales people who don't understand indexes."