How to Focus on the Customer with Data Driven Marketing
Everything you do as a database marketer employing data driven marketing depends on understanding your customers. This in turn depends on having clean and accurate customer information. Customer databases aren’t static entities. You don’t just build one and hang up the tool belt. These databases require constant maintenance.
How to get customer data from your company’s systems for data driven marketing
Your customer data is spread out across a variety of sources. You have transaction systems that keep track of sales, orders, service requests, customer complaints, and everything else it takes to run your business. These systems include call center databases, cash registers, your website, and your e-commerce system.
When building a customer database, you face two main challenges. The first is simply getting the data out of these systems and collected in one place. Because the data is always being updated, this is an ongoing process.
Most customer databases involve regularly scheduled data downloads from various source systems. This is done monthly, weekly, and even daily or hourly. The frequency of these downloads defines how fresh the data in your database is.
It’s important for you to understand how fresh your data is. Very likely, not all systems are loaded to your database on the same schedule, so this freshness factor may vary depending on what data you’re looking at. The freshness of your data limits what you can do. For example, you can’t send daily thank you e-mails for purchases if your purchase data is only loaded on a weekly basis.
Integrate data at the customer level for data driven marketing
The second, bigger, challenge is integrating the data. Database marketing focuses on the customer. Your database needs to be organized around your customers as well. Everything needs to tie back to individual customers.
One thing that makes this difficult is that much of the transaction data in your company’s operational systems is anonymous. It’s not actually associated with customers at all. If you go into a grocery store and hand the cashier a dollar bill for a candy bar, that sale can’t be tied back to you.
How to manage contact information in data driven marketing
Your database marketing campaigns involve contacting your customers directly. That means your customer contact information needs to be accurate. Whether its e-mail addresses, home addresses, or mobile device numbers, if these addresses aren’t accurate, you’re wasting your time.
Managing your customer contact information is an ongoing maintenance chore. People move all the time. So addresses need to be regularly updated. The U.S. Postal Service can help with this. The USPS maintains and makes available a mover database that contains the change of address information it receives.
E-mail addresses aren’t as easy to update, though a growing number of services can help with this. It is important, however, to recognize when an e-mail address is no longer in use. You can tell when one of your e-mails bounces, or is returned as undeliverable. These need to be removed from your database. If not, you risk the nasty repercussions of being labeled a spammer.
Customers can and do request to be taken off mailing lists. Another ongoing maintenance chore involves managing these opt-outs. Active management is required because these opt-outs can come from a variety of sources.
In the case of physical mail, there’s a national database that contains global opt-outs. Global means those who’ve asked to be excluded from any direct-marketing campaign. This database is managed by the Direct Marketing Association (of which you should be a member.) But people can also contact you directly to ask that you not market to them.
In the case of e-mail, legislation requires you to provide customers with the ability to opt out of hearing from you. Another piece of legislation applies to phone numbers. A national Do Not Call registry is operated by the FTC.
You need to respect opt-out requests. In some cases, you’re legally obligated to do so. In the case of mail, the Direct Marketing Association takes a dim view of database marketers who don’t comply with their standards. If the DMA blackballs you, you’ll have a difficult time finding credible vendors to help with your direct mail. Why waste money communicating with people who don’t want to hear from you?
Communicate with the household
Most database marketing campaigns are directed at households rather than individuals. This is partly to reduce mailing costs. It usually doesn’t make sense to mail multiple copies of your message to the same address.
But focusing on the whole household serves another purpose as well. Many of the demographic traits that drive the way you target and communicate your marketing messages are household-level traits. Things like presence of children and household income are classic examples. In fact, all the data collected by the U.S. Census Bureau is collected at the household level.
Actually building a household record is a little bit tricky. It involves a good bit of data cleansing and data processing to group customers together. Luckily, a variety of companies out there can do this for you. In fact, because they have a lot more data than you do, they can do it far more effectively than you can.