In this age of “Me, too” Web sites, understanding your customers is not merely the key to profitability, it is the key to survival. Consumers gain by getting offers for products and services that interest them. Companies gain by focusing their marketing efforts on the most receptive consumers.
Many organizations claiming to profile their customers take an approach best illustrated through the fable of the six blind men and the elephant. As each man touches a different part of the pachyderm, he comes to a wildly inaccurate conclusion about the beast’s identity. Only by collectively combining their knowledge could the men recognize the whole.
When building a profile of customers, the data that needs to be collected can be broken into four categories: transaction (e-commerce), marketing (visitor profiles, registration, promotion/response), performance (log files, tracking), and offline (call center, store, mail, etc.). Rather than pool this data, however, many organizations stash information from each category in separate “data islands” that are each tapped by a different group, such as marketing and sales, technology or corporate management. The elephant strikes again.
Understanding customers cannot be an insular function of any division. Only when your databases are connected can you truly understand each customer and begin to market one-to-one.
The place to start is with an audit of your current data-collection techniques. Determine your business and marketing objectives. Identify who in the organization already may be collecting specific types of customer data against these objectives. Verify if the data being collected is in a useable, easily transferable format. Develop a wish list of other items you want to know about each Web visitor.
The most critical step in the process is to make sure everything is driven by your business and marketing objectives. Web sites that target executives of Fortune 500 companies are going to have different data needs than sites that cater to college students or music lovers. While you don’t need to know everything about your visitors, you do need to acquire enough relevant information to perform statistical analysis and segment customers into actionable groups. A spreadsheet of e-mail addresses doesn’t cut it. It is imperative to compile a robust database that will allow you to reach customers across an array of needs and interests.
While collecting data, keep in mind the following:
• Databases can only be connected if there is a common key.
• Asking questions consistently will allow you to benchmark consumer responses to third-party resources.
• Offering incentives has been shown to increase the accuracy of consumer-supplied data.
• Consider a proxy question. You can gauge income without asking respondents to reveal exactly what they earn.
• Validate data at the source. Let consumers update their personal profiles.
• Have checks in place to be sure responses make sense. Examples of problems include visitors who stay on a page for several hours or finish a 10-minute survey in less than 30 seconds.
• Don’t analyze too much. Do you really need to know every page that was visited or is it enough to know which section a visitor was in?
• Implement a privacy policy and publish a privacy statement. Much has been written concerning the sharing of data among Web sites. The key to developing interactive relationships with customers is trust. This means not exchanging or selling data. Your customers will trust you if you refuse to give away data.
There is no doubt that this is a complicated, often highly technical process. Off-the-shelf software can solve part of the problem, especially when it comes to the number crunching grunt work. However, database marketing is not usually a software problem, but rather a marketing intelligence problem.
Over the course of integration, various departments will be asked to work together, meaning that top management must be supportive of the entire process. To this end, sites should consider using a trusted third party to help them collect, store and analyze their data. This allows them to concentrate on running their businesses and building their brands.
At this point, you will be able to identify previously undetected relationships. Examples of successful marketing objectives supported by robust information collection include:
• Identifying golfers who may be interested in a luxury auto lease.
• Finding stock traders interested in purchasing discounted technology products.
• Discovering which visitors to a financial Web site are interested in receiving all their banking, investment and insurance services from a single source.
Supporting your marketing objectives with database marketing not only helps reach an audience in the ways described above, but it also enables you to deliver marketing messages targeted toward groups that overlap and intersect.
What initially may appear to be a jumble of numbers ultimately provides a more accurate understanding of customers. And as customers become accustomed to being treated like individuals on the Web, there’s very little margin for error. It’s no longer possible to play blind man’s bluff and merely guess what your customers are really like. You can imagine how that elephant felt after being prodded, poked and still misidentified.
