Marketing Database Abusers

A consistent theme of these e-Letters is Best-Practices Marketing Database Content. However, the best content in the world is useless if you are a Database Abuser. This is because today's database access tools, with their powerful GUI interfaces, give anyone the hands-on ability to analyze data and draw their own conclusions. Therefore, access tools can become a weapon of mass destruction when they fall into the hands of a Database Abuser; that is, someone with suboptimal analytical training. After all, false "insight" is worse than no insight at all!

How can you tell if you are a Database Abuser? Consider the following scenario:

Some of your customers have provided an email address and others have not. A year ago, you added well-coordinated email blasts to your customer-side direct mail promotions. Of course, the blasts can only be sent to people who have supplied an email address. And, database analysis indicates that customers receiving the blasts have contributed 36% more in revenue and profit over the past twelve months than those who have not given an email address. Clearly, considering that the blasts cost almost nothing to generate, the email campaigns are driving significant incremental value.

Sound like a reasonable conclusion? If so, congratulations qualify as a Database Abuser!

The issue is not the value of integrating email with direct mail. That is likely to be significant. The problem is that, with the scenario as presented, the conclusion was reached without any rigorous analysis. Consider that:

  • Most email addresses are provided during the order fulfillment process. For example, e-commerce sites typically request one for order verification and tracking. The same is true at well-run call centers.
  • Therefore, the more a customer has ordered, the more likely it is that an email address has been provided. Likewise, the more recently a customer has ordered, the greater the chance that the email address on record is still valid. Finally, the more loyal a customer, the higher the probability that he or she has not opted out of the blasts.

Get the picture? Customers who are receiving the email blasts are fundamentally different from those who are not. They are, in short, better customers. And, this intrinsic edge in quality is driving some portion of the 36% advantage in revenue and profit. How much? We do not know for sure. Figuring that out requires rigorous testing and analysis.