News
 A
12-Point Checklist for Database Marketing
By, Arthur Middleton Hughes
What can we take away from the past two decades of
database marketing? Anyone who works in marketing
today has to be familiar with and be able to use the
following twelve methods. Test your knowledge with
this checklist.
#1 Address Hygiene
Modern service bureaus can take any large or small
file of customers or prospects, reconfigure them
into a common format, correct the addresses to U.S.
Postal Service® standards, consolidate the
duplicates, apply National Change of Address, and
get the records ready for mailing or storage in your
marketing database in one or two days after receipt
of the data.
#2 Relational Databases
Putting customer databases in a relational form
makes it possible to store an unlimited amount of
information about any customer or prospect and
retrieve it in an instant, in a hundred different
ways. Relational databases are essential to modern
database marketing.
#3 Customer Communications
Personalized customer communications, based on
information in a database, can be shown (using tests
and controls) to increase customer retention,
loyalty, cross-sales, up-sells and referrals. They
are effective and the principal reason why you build
a marketing database.
#4 RFM
(Recency, Frequency, Monetary Analysis) is a highly
successful way of predicting which customers will
respond to promotions. This segmentation tool has
been around for 50 years, but many marketers still
do not understand it or use it properly.
#5 Appended Data
It is possible today to append data to any name and
address file to learn age, income, home ownership,
presence of children and about 40 other valuable
pieces of information about any household. This
information can be used to create customer segments
and guide strategy designed to create powerful
customer communications. Similar information, such
as SIC code, number of employees, and annual sales,
can be appended to B-to-B files.
#6 Web Sites
A Web site with cookies can show customers pictures
of the product, instructions, background
information, and details, while enabling them to
print this customized information. Web sites are a
tremendous research tool and customer bonding and
ordering tool. No database marketer can really be
successful without a personalized Web site with
cookies or some other customer identification
mechanism.
#7 E-mail Despite SPAM, e-mail marketing has emerged
as a powerful database marketing tool. The ability
to contact customers immediately with transactional
information makes for vastly improved customer
relationships, leading to retention and increased
sales.
#8 Tests and Controls
Since 1980, marketers have been sending out direct
mail and measuring the response to each campaign.
Setting aside customers in a control group, we can
measure with pinpoint accuracy the short- and
long-term effect of any marketing initiative.
#9 Loyalty Programs
Most customers are delighted to participate in
well-designed loyalty programs. Airlines have been
successful with these programs and their use has
spread to supermarkets, hotels, retail stores, and a
variety of industries. They are part of the mix of
retention-building services that database marketing
has made possible.
#10 Rented Lists
In the past, most companies kept their customer
lists strictly private. Today, most lists are
shared, exchanged or rented. As a result, there are
more than 40,000 lists on the market which include
data on more than 240 million American consumers and
millions of businesses.
#11—Multichannel Marketing
Customers buy through multiple channels: retail,
catalog, Web, etc. We’ve learned that multichannel
customers buy more than single-channel buyers. To be
successful, you need a database that provides a
360-degree picture of your customer, coupled with
strategies that recognize and communicate personally
with the customer when she shows up in any of the
various channels.
#12—Penetration Analysis
Using a database and online analytical software,
marketers can do their own penetration analysis.
What percent of sales do you have in each ZIP CodeTM,
SIC code, income level or age group? This is a
versatile tool that can help you to locate retail
stores, place advertising, and direct your sales
force.
If you are not familiar with and using these
techniques in your work, you may not be getting the
level of customer retention, cross-sales, up-sells,
referrals and profits that others enjoy.
Arthur
Middleton Hughes is vice president/solutions
architect at KnowledgeBase Marketing (arthur.hughes@kbm1.com).
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Melissa Data
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