Five Steps to True Database Marketing

Many marketers mistakenly think they are doing database marketing because they have a lot of data, build models and use databases in implementing their direct mail programs. But they fail to leverage the potential of their data.

Some are limited by legacy infrastructures. Others cannot show the results of their efforts because they lack the ability to track performance metrics. And many talk about what they want to accomplish, but do not know how to turn their ideas into actions.

Driven by the need to identify and expand the prospect universe, improve profitability and increase the lifetime value of every customer interaction, direct marketers are turning to database marketing. Database marketing lets DMers gain insights and deliver measurable results. New processes and infrastructures allow possibilities that were unavailable only a few years ago.

True database marketing uses a quantitative, fact-based approach to manage the acquisition, retention and maximization of an organization’s customers at the lowest possible cost. Database marketing takes into account past behavior and current knowledge to predict and optimize future results, and lets marketers use data to better understand the effectiveness and performance of programs.

When done correctly, database marketing serves three main purposes: It serves as an integrated element of an organization’s marketing; it aligns closely to organizational strategy; and it optimizes an organization’s marketing across all channels.

True database marketing creates new opportunities for marketers who already have cut costs by streamlining their operations and have begun mailing “smarter” – strategies that, though effective, will yield only short-term benefits at the expense of sustainable results.

Many marketers know what they want to achieve with their data, but lack the resources and planning. When planned and implemented effectively, database marketing directly supports marketing objectives and provides a clear return on investment, making it both a “knowable” and “doable” concept.

To achieve true database marketing, follow these five critical steps:

Assess. Take an inventory of all data, infrastructure, database marketing processes and analytics. Determine how database marketing is used in the organization. Is it implemented strategically? Does the infrastructure support the overall business strategy by helping run campaigns? Or does it mostly involve eliminating duplicates on an irregular, project-by-project basis? Then evaluate the business strategy, campaign management capabilities, marketing actions and results.

Perform a “gap analysis.” Use the assessment to identify where gaps appear in the database marketing program. Marketers should compare their capabilities to industry best practices. Do you use accurate information that is updated continuously? Can you react quickly to changes in the marketplace? Can you demonstrate marketing’s effect on the organization? Advanced database marketing environments measure ROI, give 24/7 access to real-time information and provide overall campaign management.

Set options and prioritize. Develop a comprehensive list of options and action items to help close any gaps that are found. Prioritize each option by the organization’s ability to implement the action and to determine the effect that each action will have on marketing programs.

Analyze and decide. Weigh the options with demands and priorities. Effective decision making results in achievable database marketing programs with a doable set of high-impact projects. Be realistic in setting priorities. Marketers often take on too much, resulting in incomplete deliverables, lower results and missed opportunities. Decide whether to outsource database marketing strategy and implementation or do it internally.

Implement. Define the project purpose, goals, ROI metrics, plans, timelines and costs. Then execute on those actions. Actions should be tightly managed and their effect measured via an ongoing implementation of this five-step process. When properly implemented, true database marketing gives marketers a clear return on investment and the confidence to act on their findings. Marketers also must consider their infrastructure. Can it seamlessly support today’s multichannel marketing campaigns? Does it provide measurable insight into every campaign? Does it support corporate strategy and marketing objectives?

To support true database marketing programs, infrastructure must import, store and maintain relevant data, promotion history and past marketing performance. Marketers should have fast, easy access to this and be able to run reports and analyze the data.

Related Posts