Direct marketers often are not very creative about how they take advantage of their marketing databases. Sure, modern marketing databases are used to make general decisions about whom to promote. Typically this is done with rules-based logic such as RFM cells or — even better — with statistics-based predictive models. However, this is just scratching the surface of what a modern marketing database can do for you!
In an earlier article — "Techniques for Leveraging Atomic-Level Data," Chief Marketer, December 21, 2010 — I outlined six ways that a modern marketing database can be employed to help drive increased revenues and profits:
- Identify commonality within customers.
- Identify commonality within merchandise.
- Identify commonality within customer/merchandise hybrids.
- Build merchandise-driven predictive models.
- Conduct data-driven operational CRM.
- Implement Marketing Action/Reaction Systems.
Here are three additional ideas:
A modern marketing database allows companies to dramatically reduce campaign cycle times while simultaneously enhancing targeting effectiveness. In fact, it is now possible to contact affected customers within hours of when a high-potential event has taken place. This is known as Rapid-Cycle Marketing. A recent example is Federal stimulus money for education and infrastructure improvements. Here is how Rapid-Cycle Marketing works:
- Significant funding is announced.
- The marketing database is queried to identify the customers that qualify.
- A highly-targeted promotional campaign is then developed and deployed, driven by quick-turnaround channels such as phone, email and laser-printed letters.
- The resulting purchase transactions and promotion history are looped back to the marketing database, thereby enhancing future analysis and targeting.
Generating "Action Lists"
A modern marketing database can be coupled with an ongoing program of analytical investigation to generate "action lists" such the following:
- Lists of the products and services that are not being purchased by given customers, but which are likely being purchased from the competition. There are several ways of determining this. One is to track consumables. If a customer is buying "say "laser cartridges from you, it is certain that some company "somewhere "is benefiting from the purchase of the printers.
- Lists of distinct categories of customers such as: new, high-potential, at-risk, and already-lost. Many of these lists, such as of high-potential and at-risk customers, are driven by statistics-based predictive models. Often, guidance on recommended actions can be generated from other, non-modeling forms of analysis.
- For companies that have a B2B component, lists of individual-level prospects within existing company-level and location-level customers. In B2B, the definition of a customer is contingent upon the level of analysis. For example, assume that the Acme Manufacturing Company is a customer. Within Acme Manufacturing, the Akron, Ohio location is a customer but not the Harrisburg, PA location. Likewise, within the Akron location, Joe Adams is a customer but not John Jackson.
Data-driven action lists are extremely helpful for companies that operate outbound telemarketing and/or field sales departments. Outbound telemarketing and field sales professionals are most successful when their efforts are closely coordinated with direct marketing channels such as mail, email and fax. A marketing database coupled with insightful analytics serves as the foundation for this close coordination.
Optimizing Merchandise Adjacencies
A modern marketing database can be invaluable in the optimization of merchandise placement within websites and brick-and-mortar retail stores. For example, for a company with $1.5 billion in revenue across approximately 200 outlets, analysis revealed that two very-positively correlated merchandise categories were located at opposite corners of the stores. Among other changes to the merchandise configuration, these two categories were moved next to each other.
If you are using your marketing database just to make better general decisions about whom to promote, then you are leaving money on the table! Think creatively about additional applications. Can your company benefit from Rapid-Cycle Marketing? Can you generate "action lists," along with data-driven guidance on how to take advantage of them? If you have an outbound telesales group or field sales force, can you make it easier for them to sell? Can you use analytics to do a better job of merchandise arrangement? How many of the six other initiatives mentioned earlier are applicable? What about other ideas? There almost certainly are additional ways that your marketing database can help grow your revenues and profits!