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One of the challenges in maintaining a relevant database involves recognising that customers may use several different response / communication routes to transact. Activity could materialise through the postal, telephone, or Internet and channel usage may vary depending on which is the most convenient at the time. There is also the complication that results when customers buy different products and from different divisions. For all of these reasons it is vital to ensure that a single view of the marketing universe is maintained so that each customer can be identified, with certainty, as a unique individual. Failure to do so will certainly result in the database containing duplicate records, compromising the effectiveness of the marketing initiatives, and generating very unhappy customers when they receive multiple identical communications!
Because marketing data is derived from multiple sources the marketer, when using more than one list, should recognise that a merge/purge exercise is an essential part of the process, and will cover its own costs by delivering savings on everything from pack production to postage. Remember that merge/ purge can simultaneously be used to segment the database in other ways, for example by gender, or to provide counts which give extra detail for response analysis and list evaluation.
However, the issue outlined above is a two-sided coin, and there is a positive aspect to be considered as well. Active Direct Marketing customers will habitually appear on several lists. These people should be tagged as having a high propensity to buy, and the marketing strategy should focus on how best to leverage that higher-than-average potential responsiveness. Furthermore, the behaviour of these regular buyers can be modelled, with the resulting customer profile being used to identify other hot prospects who carry similar attributes.
The same principle holds true for transactional data. If the database represents the heart of the marketing initiative, then transactional data is the blood that pumps through its body. There is no information as rich, or fresh, as your own, so use transactional data to continually refresh the database - in real time, if possible. The power that is embodied within the RFV (Recency / Frequency / Value) metrics can not be over stated. These are the values that enable the marketer to construct a meaningful profile of what their best customers look like, enabling them to concentrate their marketing efforts on these high-value individuals. Additionally, this enhanced understanding also enables the marketer to buy in cold data that automatically delivers prospect addresses with an in-built propensity to transact.
Once the marketing database has been profiled, and appropriate customer segmentation has been applied, a test-and-learn program should be designed and implemented. In this way different marketing messages, creative, products and incentives can be tested against sample audiences to ascertain whether they deliver increases in responsiveness. The learnings from this program can then be re-introduced to the marketing life cycle, fine-tuning it to deliver maximum responsiveness. The marketer should also not lose sight of the need to maintain a control group of people who have not been contacted or incentivised – without this control group it will be impossible to quantify the true effects of this process.
The database administrator should also consider the opposite end of the responsiveness spectrum. Individuals who frequently request offers and trial packs, but who never buy, should be removed from consideration for future selections. In the same vein, poor credit risks should be identified and abandoned (unless you are marketing financial products and services that focus on individuals with poor credit ratings!). Responsiveness will also drop off when customers move house – ensure that all change of address notifications are processed with the minimum delay.
Regular screening of the database against commercial suppression files should definitely form part of the program. The DMA Code of Practice requires members to use the Mailing Preference Service, but a good database administrator should definitely go the extra mile and use a suite of suppression files to remove gone-away and deceased records too. There is a wide range of offerings that meet these requirements, and some significant advantages to be derived. Always ensure that the identified records ( this holds true for unsubscribe requests as well ) are flagged against the database records instead of being deleted – this will ensure they are not inadvertently re-activated by new data feeds.
Hard benefits of a suppression program include financial savings through reduced mailing wastage. It also translates into improved campaign performance as success is measured against an audience that is automatically more responsive. Soft benefits accrue through factors such as improved brand perception, by not marketing to individuals who clearly have no requirement for the product. There is also an environmental benefit – suppression screening means fewer mailing packs, therefore reduced requirements for paper, energy, and solvents, all factors which sit well with current environmental guidelines.
In addition to identifying ‘gone away’ records, a number of vendors now also offer reconnection services which can be used to follow movers to their new addresses. While these services have a success fee attached to them, that fee can be measured against the average cost for a company to recruit a new customer. Provided that the reconnection charge is less than the recruitment charge, it represents a positive opportunity to reduce database churn through maximising the retention of existing customers.
Maintaining a healthy marketing database is a multi-disciplinary process, and good marketing professionals, while recognising the value of the ideas and suggestions presented above, may also find themselves wondering where to find the time, resource, and expertise to implement them. There are a number of competencies that need to be employed, including data sourcing, data hygiene, database management, and customer analysis and insight. It may be worth their while to consider engaging with a specialist database marketing partner. In this way, they can provide themselves with direct access to the expertise (and track record) that is integral to the successful operation of a healthy marketing database, delivering all the benefits that have been outlined here.
Guy Hanson, Chief Technology Officer
Avongate Maestro Interactive
