It’s frustrating: You know that the best prospects for your product are within your own database. But you are unable to mine your own data and pinpoint those customers you want to target, and you are unable to determine a customer profile from your own database.
Many firms are in this position. Can you outsource? Maybe, but you will need $50,000 to $100,000 or more for an experienced database marketing consultant to develop a relational marketing tool using your detailed transactional data. You will have to persuade your corporate executives to release proprietary information to a company they don’t know while they also do not understand the value of that company’s service. You will have to create an integration system to free-flow data between your internal systems and your consulting company.
My recommendation is to start small. Begin by covering these elements:
* Have access to your database, know who your customers are and what, how and when they purchased.
* Capture needed demographics such as title, age, income, SIC, to better predict behavioral patterns within your list.
* Implement list maintenance procedures such as duplicate elimination, NCOA, ZIP-plus-4 and CASS certification.
* Create the ability to rank your customers with a basic RFM coding.
Also, the following are considerations to ponder before proceeding:
* Do you have the budget to develop a simple system?
* Keep it simple.
* If you have an information technology or information systems department, make sure you have its support to download and localize transactional data to your departmental systems or an outside data management firm.
* Create a plan of action prioritizing your needs.
* Learn all you can about relational tables and how you can normalize data and make different tables work together to bring about the desired results.
* If you plan to localize this system within your department, find a database program that fits your needs and is designed for nonprogrammers. Then learn that program and make sure you have someone on board who can build the database structure, forms, queries and reports. Again, if you have an IT department, work with it to download updates from the corporate system.
* If you plan to use an outside data management firm, be sure your expectations meet its capabilities. There is a difference in housing data for simple data retrieval and creating a relational database for detailed marketing analysis.
If you do not understand the difference, you could spend money for something that doesn’t meet your needs.
* Identify others who can assist with your objectives; look for someone who understands database utilities and can provide consultation — and recruit them.
Creating the Database
Layer 1. Determine the database structure and download the contact data and the transactional data that will let you see your data, and run queries based on purchasing information. Set up a plan with your computer systems department to download updates periodically. Be sure to include a unique ID field that lets you update transactional data and add new customers. Account for product returns to properly determine the value of that customer.
Layer 2. Create the tables and fields that will let you enhance and maintain your database. Form an alliance with a list maintenance firm to perform ZIP-plus-4, CASS certification, duplicate elimination, NCOA, phone append and/or data append. Proper list maintenance is crucial. Twenty percent of consumers, especially nonhomeowners, move every year. You should CASS-certify your list at least every six months.
After almost every NCOA, you will find duplicates from customers who ordered from their new address without your knowing they were existing customers. You will also need to create the methods of capturing data obtained from your marketing surveys and/or any data obtained when an order is taken. Think about how you can sell from your new database, capture needed information, make address corrections and funnel the transaction back through the corporate system.
Layer 3. Code your database to prioritize your customers. Start with RFM coding. For recency, determine what last purchase date range you consider to be As, then Bs and then Cs. Do the same for frequency, then for monetary value. Mark the file with the appropriate code in separate fields created for each. Then combine the codes into one, three-digit character field. When done, you will have a very simple means to select your best customers, AAAs being your best customers.
Once you identify your customer profile, you can begin prospecting for new customers by renting other lists within your market that match the profile of your best customers.
Remember, you aren’t alone in this database maze. Start slow. Learn as you go. The more you get into this project, the more layers you’ll find you need. It will be a tool that will continue to grow and evolve as your needs increase and change. The end result will be maximizing your marketing efforts with the best list on the market — your own database.