This time it’s personal for database marketers

Marketers across industries are discovering the power of their customer databases as a source of information that can significantly boost acquisition and retention. Today’s marketer is sophisticated when it comes to behavioral targeting and modeling tactics, as well as deciding which is the most valuable data to collect on its customers.

As the economy remains mired in malaise, the accountability and ROI associated with database marketing has made it a vital component in the marketing mix.

When Florida’s Seminole Casinos was awarded the right to add more slot machines and new table games to its properties in May 2008, newly appointed SVP of marketing Jeff Hook looked to database marketing to prepare for the rollout. Hook immediately sent out an RFP to database marketing providers to help Seminole tackle its massive customer database and find prospects likely to come to Seminole’s casinos for those games. After a long search, SAS was brought on board, and the initiative launched last month. Hook and his team have begun to dig into the customer database for clues that will help it acquire and retain customers.

Hook is a strong proponent of investing in databases because of this value proposition. He expects the relationship with SAS to pay off “in three to six months.”

“We’re willing to invest lots of money on capabilities like this, because we know if we get just slightly smarter in a few areas, we can get a vast payback,” he explains. “In ourworld of casinos, there is lots of data about lots of customers worth lots of money. If you can do something just slightly better, it has a significant payoff.”

The efficiency of targeted marketing can’t be duplicated by broad-based efforts, says Rory Fagan, sales manager for SAS’ hospitality and gaming division.

“I think it has taken the recession for people to realize that things aren’t working,” he says. “Now, marketing needs to be much more laser-focused to reach the target audience.”

Ralph Thomas, Seminole’s VP of database marketing, believes the most powerful aspect of database marketing today is the ability to do predictive modeling. The opportunity to use customer data to predict what a certain person will do — or to apply those attributes to a prospect — brings together database’s strengths of targeting and accountability for the next decade. It also allows marketers to concentrate only on certain data that are ideal for their product, service or initiative, rather than sifting through data that aren’t applicable to the particular marketing effort.

“I think predictive modeling is something that this industry is beginning to embrace,” Thomas says. “The good news is we don’t need a lot of demographic data — we get so much behavioral data from the [Seminole Casino Wild Card loyalty] card.”

Marketers’ move toward collecting only the data they need and steering away from that which they don’t has become more important in assuaging privacy concerns. Platts, a division of McGraw-Hill, publishes newsletters covering the commodities trading market. The publisher has a significant international operation, so it must manage several different privacy laws.

Platts prefers to build its prospect database by attracting people to its site where they will download a whitepaper or otherwise interact with it, says Matt McCary, senior director of global marketing.

“We really are about using search engine marketing to encourage people to come to our site and download something, where we can capture that lead,” he explains.

However, the publisher also works with outside sources to complete its view of its target customer using appended data.

“We do have a budget for buying lists,” McCary adds. “We use vendors where we have partial information that we’ve gathered where we need to fill in the blanks, or it’s outdated and need to be updated.”

Marketers building out their data practices need to not only invest in the right database tools, but also must recruit staff that work well with marketing data.

“It’s not just an investment in software, it’s an investment in HR as well,” Hook says. “You need someone who knows how to market, but also someone who can help store, retrieve and integrate data.”

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