Best-Practices Marketing Database Content is defined by the Ten Commandments listed in the May 5, 2007 e-Letter. Our focus for the second consecutive month is on The Tenth Commandment: Overlay data must be included, as appropriate.
Last month, we discussed the limitations of overlay data in solving the "whom to promote" customer targeting problem, including when and how often. Specifically, in the presence of customer behavioral detail, overlay data typically provides no cost-effective incremental power in predicting key activity such as upcoming purchase volume.
Overlay data, however, often plays a seminal role in solving the equally important "what to promote" problem. The analytical vehicles for doing so are the various techniques that are available for generating homogeneous segments; that is, where at least one dimension is shared by all members of a given segment.
Often, homogeneous customer segments are constituted from combinations of behavioral and overlay data. For example, everyone in a hypothetical segment might have the following three dimensions in common: under-the-age-of-45 gift-givers of home electronics.
Homogeneity is essential for cost-effective targeting; that is, in the data-driven tailoring of promotional content. This sort of information is invaluable to marketing and creative personnel as they work to transform quantitative insight into innovative targeting initiatives.
Promotional content tailoring takes the following two forms:
- Differential offers, including creative and copy. Examples include: 1) direct mail versioning in the form of "specialty" pieces, signature differentiation, and customized messaging such as inkjet, covers and wraps, and 2) the e-mail channel with its infinite potential for customization.
- "Operational CRM" at customer touch-points such as call centers and e-commerce sites, in the form of thoughtfully-packaged customer information; contingent, of course, on the sufficient robustness of the underlying operational infrastructure. One example is the content-tailoring of call center scripts and Web pages to drive up-sell and cross-sell efforts ("suggestive selling"). Another is best-customer identification during the resolution of service problems.