Database technology advances are changing the way marketers view their databases: from black holes or bottomless money pits dependent upon IT administration to powerhouses of customer insight that speedily measure, justify and continuously improve CRM and marketing activities.
Marketers historically have been technologically constrained in deriving customer insight from databases and acting on it to make intelligent customer relationship management and communications decisions. The skills required to use the tools for analysis are not part of the typical desktop marketing arsenal. Many of us in marketing departments have been there all too often, having to rely on data analysts or IT for the answers to our database-related questions. The turnaround time on this activity usually means we must conceive our questions well in advance, which prohibits any kind of “direct dialogue” with our customer data.
This has led to demand for systems that are accessible to marketers and let them quickly get answers to a wide variety of questions and use those answers to carry out appropriate actions. Research compiled by Alterian via a survey of more than 200 marketers revealed that most of them are dissatisfied with their customer insight capabilities and that:
· 36 percent have to wait weeks for the results of marketing data analysis.
· 52 percent say lack of tools within the marketing department is a barrier to improving data analysis.
· 84 percent report that their preferred method to improve data analysis would be to carry out their own analysis, at their desktop or within the marketing department.
· Enter visualization-led database marketing. VLDM is a method of using contemporary technology to manage information-driven targeted marketing activities directly from the desktop. Any marketing database solution using this approach has three core ingredients:
· Intuitive, graphical user interfaces. Marketers typically are creative, right-brain creatures who prefer working with images rather than technical structures. They require software and desktop tools that are graphical and intuitive. They must be able to pose questions in terms they understand, rather than, say, typing in SQL, and find interpretation and use of the answers painless. These requirements are best met by programs that make extensive use of drag-and-drop features and various interactive graphs and charts. A retail marketer may want to know the profile of customers who have purchased by both Internet and direct mail. Assuming this analysis has not been pre-canned, they should be able to define the required customer segment via a few drag-and-drop steps and read their profile from a set of simple charts.
· Rapid, unconstrained data analysis and segmentation. An intuitive interface is only part of the solution. There also must be a powerful database engine that enables rapid response to a marketer’s varied questions. Traditional relational database management systems were not designed to answer many of the types of questions marketers ask, across the volumes of data that may be involved. Even with expensive, state-of-the-art hardware, the time to run such queries often is prohibitive. Some tools boast speedy response, but do so via the pre-calculation of a set of measures (e.g., total sales) across a predefined set of dimensions (e.g., store).
But most marketers need more flexibility than these tools provide, because the dimensions they are most interested in are dynamic sets of customer segments. What marketers really need to derive customer insight and define customer segments is an underlying database engine that provides nearly instant response to database queries that may involve millions of unaggregated, low-level, customer and transactional records.
· Seamless process flow. Though the analysis aspect is important, it’s of little use if it cannot be acted on. The third essential ingredient of VLDM is the ability to seamlessly move through all stages of the process. That is, to be able to derive customer insight, identify customer segments, use these to define and execute campaigns and then measure and analyze the outcome all in a single or tightly integrated environment.
The visualization-led revolution. So why the drive toward visualization now? Arguably, marketers have craved desktop control, data analysis and data visualization capabilities for, well, almost forever. But for nearly two decades the existence of the technology, cloistered by its lack of adaptation for the marketing desktop, has created a mounting desire for database empowerment. Several factors have turned this pent-up demand for visualization-led marketing into an urgent need, including:
· New, more fragmented media and commerce channels. Media fragmentation, caused by an expanding number of advertising and commerce channels, has destroyed the concept of the mass-media consumer and forced marketers to use quantitative data and analytical techniques to target and validate their audiences. Companies that customize offerings and communications to pinpointed audience segments will be the ones to develop long-term, loyal customers. According to Eric Schmitt, senior analyst at Forrester Research, we are seeing the emergence of “Left Brain Marketing” – “the rise to predominance of analytical marketing strategies, skills and processes that are centred on audience knowledge, not media.”
· Growing pressure to deliver positive ROI on marketing activity. Marketing is under increasing pressure to deliver, measure and prove its cost-effectiveness. With growing volumes of data and increasingly sophisticated tools, marketers are adopting a more scientific approach to help defend marketing strategy, justify marketing investments and improve campaign results.
· The demand for rapid, unconstrained analysis. Marketers now demand direct access to their customer data via tools that they can use and understand themselves. They want immediate access to their data with unconstrained analysis capabilities. Unfortunately, this has not been the norm. Many organizations have invested in business intelligence tools that marketers simply lack the time and skills to use. Most tools in use can produce only static reports that do not deliver strategic, actionable customer insight. In contrast, VLDM tools let marketers have an intelligent dialogue with their data and act based on these findings.
What’s in it for you? The benefits of VLDM are immediate and numerous. Those who use this approach are marketing “smarter, not harder,” experiencing improved campaign response rates, reduced marketing costs, a better understanding of customers’ needs and wants, a reduction in irrelevant and/or wasteful messages and, perhaps best of all, faster turnaround because of seamless execution of campaign planning and analysis from within a single processing environment. VLDM solutions empower marketers to complete common tactics and strategies from the desktop, such as:
· Creation of customer profitability deciles and profiles of high-value customer segments.
· Identification and profiling of customers who bought specific combinations of products or used specific combinations of channels (ever, or within specific timeframes).
· Identification of characteristics of customers who lapse/switch or respond to a specific promotion.
· Customer segment migration analysis.
· Creation of new marketing metrics or dimensions.
Database marketing requires a lot of interaction with customer data to understand both customer behavior and the effect of previous marketing programs on response and purchase.
The natural and fluid needs of marketing mean that self-service applications will succeed much better than ones that require a substantial support staff. VLDM not only has helped pioneer desktop database marketing, it more importantly has put control, intelligence and impact into the hands of marketers, empowering them to rapidly improve marketing ROI and evolve database marketing to its potential.