THE TWELVE STEP PROGRAM – GETTING THE MOST MILEAGE FROM YOUR DATABASE

As you have seen in this and previous newsletters, we talk about The Next Mile, the next level of marketing sophistication building on information available in a marketing database.

The database consolidates multiple data streams allowing a marketer to perform two critical functions:

1. Track performance by and across channels for all segments.
2. Identify segments/persona groups for targeted and broad contact strategies.

With these analyses, we can then create marketing strategies built on integrated contact events that provide a unified Brand experience and allow customers to engage with the Brand through their preferred mediums and channels.

Today it is more challenging than ever to capture a consumer’s attention leading to a productive outcome. Our customers are behaving as if they are recovering shopaholics or at least suffering from a shopping hangover. We as merchants or as service providers are doing our best to recover from two years of constant shock treatment to our industry starting the wallop of postal increases, followed by higher paper and printing costs, shifting allegiances and purchase behaviors, and of course most recently the drop in consumer spending triggered by our fragile economy.

In addition to some market-specific ideas we offer in the Mind of the Multichannel Consumer, we at Marketsmith recognize that moving forward we need to perform due diligence on our own databases, digging deeply into performance and customer data. Our Twelve Step Program to optimize performance through integrated marketing offers a framework for building a strategy to carry you through both the bad times and the good.

We at Marketsmith, Inc. firmly believe that the past holds the keys to the future – through looking at the past, you can determine what works and what doesn’t, and then make educated decisions about how best to move forward. Additionally the historical analysis can provide insight into how the various channels can work together to create a holistic Brand experience for the customer. It all starts with the database.

1. Consolidate data from all data streams into a single repository.
2. Create an accurate performance history, segment by segment and source by source, which functions as a baseline. Include all web sources (email sign-ups, search, affiliates), retail activity, lists, co-op models, and any other sources, in addition to all house segments.
3. Determine which variables are the most effective segmentation factors – past behavior, product purchase, customer characteristics, purchase channel.
4. Identify which metrics are the most consistent predictors for each type of event – email deployment, search activity, mailing results.
5. Identify the metrics which provide the longer term view of profitable customer sources; such as, recognizing an adjustable Lifetime Value Analysis may be a more powerful determiner of long-term profitability than sales per book breakeven analysis.
6. Map customers path to purchase through various mediums and across channels.
7. Review merchandise strategy carefully to make sure it fits with customer behavior.
8. Review changes in your database month over month to pinpoint shifts in customer behavior and characteristics.
9. Return to instituting business rule documentation process in the merge/purge, including identifying multi-buyers by source groupings, which allows greater control over contact management strategy.
10. Develop and institute a contact management strategy by source and channel grounded in performance data (see #2 above).
11. Make sure messaging across channels is consistent.
12. Manage your housefile as the valuable asset it is; be selective and strategic in your list management.

How do you start to implement these rules? You have probably heard: If you don’t know where you are going, any road will take you there. The right roadmap is essential and the right research is critical to crafting the map.

Marketers must begin with a strategic assessment of the company’s circulation practices and processes relative to its objectives, history, and long-term goals, going beyond new segmentation schemas, fancy modeling techniques, and prospect scoring, to look carefully at the underlying data. We call this process an Optimization Audit.

Through an Optimization Audit, historical data, typically for the past two or three years, are reviewed and repaired, using standard-setting best practices to analyze, measure, and report on the data. The process assesses costs on a line by line basis, considers like segment comparisons, and applies an adjustable lifetime value factor tied to the specific competitive environment as well as corporate ROI goals. It also looks at performance by source across all channels and determines the value of each group relative to the others to determine the resources which should be expended to generate results through each channel. This analysis allows for mapping the customer’s path to purchase, which feeds the contact strategy.

The bottom line is an Optimization Audit provides a healthy return on investment by creating a roadmap which identifies profitable sources, reasonable testing strategies, and targeted contact strategies which build brand equity with customers, improve performance, and eliminate practices and sources which negatively affect the bottom line.

Online and offline circulation optimization comes from focused, strategic analysis applied in a rigorous and disciplined process. Starting with an Optimization Audit to lay the ground work, Marketsmith, Inc. has been helping clients increase their net revenues using our well-honed analytical techniques and many years of hands-on contact strategy and management experience. Our audit helped one company turn around operations, stopping a revenue and circulation slide, bringing in 130,000 new customers, growing orders by 2% and net revenues by 5%. Another audit, for a high-end gift mailer, showed that by changing the season in which the company prospected, both sales and new customers increased significantly. Starting with a Marketsmith Optimization Audit, a company can have confidence its roadmap will be focused and targeted, helping the organization grow its housefile profitably.

Tags: brand, brand building, brand strategy, circulation optimization, circulation planning, database management, database marketing, direct mail marketing, email marketing, internet marketing, marketing analysis, marketing managment, marketing optimization audit, marketing strategy, Marketsmith, multichannel consumer, multichannel marketing, outsourced marketing Category: Newsletter Articles. Both comments and pings are currently closed.