Blog: database marketing

Marketing strategies to survive and thrive in today’s highly dynamic business environment.

By Jim Lewis

Part 1: Today’s Environment

In order to be successful selling to businesses, it is important to recognize the role of the individual. It is all too easy to lose sight of the fact that organizations – from small businesses to global corporations – are comprised of groups of people with not much more in common than the shared enterprise called “work” that brings them together 40 or so hours each week. Allowing for 8 hours of sleep each night, there remains 112 waking hours each week to devote to things other than work. How we fill our non-working waking hours provides important clues to what motivates, inspires, and defines us as people.

Whereas the workplace used to be the primary location that cutting edge technology was encountered, decades of increasing power and miniaturization and decreasing cost have driven highly sophisticated technologies into every facet of life – extending far beyond the workplace, to virtually every place an individual spends their time. Experiences online and increasingly offline include an information-driven component that is tailored to an individual’s preferences. As a result, we expect a level of customization commensurate with our history of visiting and interacting with people, places and things of interest. 

What are the implications of this pervasive, highly personalized world of information in the context of business-to-business marketing?

Database face-to-face
B2B Magazine's expert panel discusses how information integration across all sales and marketing channels has created new opportunities and challenges
  
Recently, Forrester Research released “The Forrester Wave: U.S. Database Marketing Service Providers Q1 2011.” To take the pulse of the direct and database marketing industry, BtoB East Coast Bureau Chief Christopher Hosford conducted a virtual roundtable discussion with executives from companies identified in the report as industry leaders to discuss the rapidly evolving abilities of marketers to gain better customer insights for more precise targeting and revenue production. Participating in the virtual roundtable were Naras Eechambadi, senior-VP and general manager at Qauero; Dennis Kooker, president-COO of KBM Group; Bob Moorhead, VP-general manager, client services at Epsilon; Tim Suther, CMO of Acxiom; and Mark Wright, president-CEO of Targetbase.

In an excellent recent blog entitled Don't fix your marketing processes, David Raab argues for more flexibility in marketing systems rather than improved processes, the staple recommendation of most consultants and experts.    I heartily endorse David's point of view and would like to extend it a bit further. 

According to David, the primary drivers of flexibility are small, simple, loosely connected processes, frequent measurements, technology that enables easy integration of new data sources and ease of use for marketers who want to change programs on the fly.  He also emphasizes the need for generalists who are comfortable with technology.   Good points, all of them. 

At a keynote panel at the National Center of Database Marketing (NCDM), I made a comment that customer marketing was eclipsing brand marketing as the core of marketing's mission in many companies.  That sparked a lively discussion among the panelists.  As is to be expected among panelists at a database marketing conference, there was general agreement that this was the case.  But is it, really?  Does brand marketing still matter?  Of course, it does!

Naras and I are in the process of writing a book chapter for a project called Masters in Marketing.  Focused on strategic brand management, the book largely provides guidance for marketers looking to understand how to strengthen their brand in an increasingly complex and interconnected world.  We've been tasked with writing about the "focus of the CMO"...and as you'll come to see, we go slightly against the grain; while brand matters, the customer and his/her ecosystem matter more.

Below is the start of our work.  I'll publish more pieces as it evolves, but I certainly welcome your input as we build out this chapter.

I attended the recent NDCM (National Center for Database Marketing conference) in Las Vegas last week, after a gap of many years, the triggering event being the fact that I was on a keynote panel being moderated by David Frankland of Forrester Research.  Attending the event after this multi-year hiatus and, particularly,  on the tenth year anniversary of a keynote address I had given there after I had started Quaero in 1999, I was struck by the changes in the conference over the years.    It is, to state the obvious for those who have been attending for many years, much smaller than it used to be.   I would guess a fourth or even a fifth of the size that it was ten years ago.  When you consider the fact that there used to be two NCDMs a year at that time versus just one this year, that is quite a precipitous fall.  Given the revolutionary changes in marketing over the past ten years, one would have expected quite the opposite.    The NCDM has always been focused on the technology aspects of direct marketing and technology has been the driver behind many of the changes in marketing in recent years.   

I recently had the opportunity to participate in a series of product demos for Neolane.  According to their web site, Neolane is "the only enterprise marketing software specifically designed to manage, automate and optimize programs across traditional and emerging channels including direct mail, email and mobile".  The Neolane team did a nice job detailing out this functionality and emphasizing their ability to integrate easily with numerous outbound channels.

The demos focused on three main points:

1.       Overall product offering

2.       Campaign planning and execution

3.       Technical architecture

Data profiling is the process of analyzing data sets to gather information on data types, statistics, patterns, relationships and other attributes.  This process is a critical task often scheduled just prior to the start of a design phase for a new database initiative.  Typically, data profiling is seen primarily as an input for data modeling and ETL design to identify data types and entity relationships.  The value of thorough data profiling actually extends far beyond these tasks and may help steer the direction of the project and ensure its success.

Below are some of the ways data profiling can add value during a new database initiative: 

Upon my arrival home from a recent business trip, I was greeted with three different catalogs from the same well-known outdoor clothing and apparel company. While each catalog focused on a slightly different area of interest what really got me thinking was simply the volume of catalogs I received in this instance coupled with the fact that I receive catalogs from this same  retailer every two or three weeks year-round. My first thought involved the production and mailing costs this retailer must be incurring in sending me catalogs as frequently as they do.

Those of us involved in the business of direct marketing understand the importance of meaningful personalization and targeted messaging.  Unfortunately, that personalization and targeting can have negative consequences due to poor data hygiene, bad list choices and errors in programming.  Some of these consequences include poor ROI, damage to customer relationships and a tremendous waste of marketing dollars.

Here are some examples of what I am talking about. 

In this era of making smarter revenue generating and cost control decisions, there is one easily accessible and informative marketing tool ready to tell you a bit more about your customers' behaviors.  If you know your customers, you can certainly do a better job finding prospects with similar purchase patterns.  I'm not talking about models or demographic enhancements (which are all extremely valuable of course). The tool I have in mind uses U.S. postal zip codes as well as longitude and latitude coordinates to map consumer behavior.   I realize that sounds pretty basic and it is.  This simple and powerful tool can show you how far your customers and prospects will travel for your business or service. 

Retailers and Bankers have been calculating the distance a customer or prospect would travel to their location to determine store/branch openings and closings for years.  Consumers are highly convenience-oriented and it doesn't make sense to be on the wrong side of town or even at the wrong intersection.  It also doesn't make sense to have two locations so close together that they are competing against each other for market share.  Zip code-based behavioral information can help marketers better understand how important location and convenience are in their target consumers' decision making process.

MarketingSherpa recently posted an online article that is related to a previous blog about recently gathered research on what drives people to unsubscribe from email communications.  The premise of that article was that the top reason was identified as 'Inbox clutter' and its effect on all email communications. 

It's a fact that bringing on new customers is a very expensive and time consuming proposition. It makes sense, then, to invest in the ability to track down and retain your best customers, no matter where they may go. 

Consumers on the move (over 40 million Americans per year), complete a Change of Address card at their local US Post Office.  Those cards are compiled and published to licensed full-service providers (such as CSG's Quaero) in a database with 160 million other American consumers who have moved in the past 48 months and changed their addresses.  Our clients have access to all that rich address information when CSG Quaero runs their customer or prospect database through NCOA (National Change of Address) and can find out which of their customers are on the move.

I've been helping customers maximize their marketing database solutions for over 10 years and often see marketers struggle with the decision whether to or not to enhance their customer data.  Ideally, additional information that could be used to build customer insights would be collected directly from the source (the customer!), but doing so may not be realistic.  Just the other day, I got a Facebook request from a friend to register to a website.  I started to fill out the form and backed out about half way through because they were "asking me too many questions".  I really didn't "know this website" and wasn't comfortable providing more than some basic information.  Something tells me that a lot of people might feel that way...