±±¾©Èü³µpk10

Customer data is a direct marketer's most precious asset, so needs to be kept in tip-top condition. A good data solutions company will produce counts, export data, and ensure the information is regularly cleaned.

Suppression is the first must-have quality check, with updated files from the likes of The REaD Group on deceased and goneaways being a key way to rid unwanted mail from landing on people's doormats. As phase two of the new DMA/Planet Ark campaign shows (see IDMF Daily issue 4 in this issue) suppression is now taking centre stage with both government and the industry association needing to hit clear industry targets.

But key though it is, running MPS and other suppression files once a quarter is often only the beginning for a business that wants to get the best out of its data. It will also want to be sure that its supplier is proactively looking for new ways of analysing the data and coming up with new ideas.

"Data management can become like a conveyor belt, churning out data week-in and week-out, and it is easy to get stuck in a routine," says Caroline Kimber,VP of direct marketing solutions at CACI. "You need to constantly step back, noting and acting on any interesting trends."

It stands to reason that any firm that carries out mailings three or four times a year continually needs to clean its data, but ongoing data cleaning is also essential for those that want to be able to run a campaign at a moment's notice.

For the De Vere hotel chain, GB Group maintains a clean data environment.

"This means that if the client suddenly decides to promote hotel rooms for Saturday week we can carry out a segmentation and publish today," says Bill Mooney, sales director for GB Group Data Solutions.

The quality of the cleaning can also vary, with significant variations in results depending on the systems used. For instance, when NCH Marketing Services switched to the Hopewiser software to clean its 3.5 million strong national database, it found the accuracy rate was 89 per cent, not around 95 per cent as it had previously thought. That gap could have meant lost sales opportunities worth £10 million or more.

Ideally the database will be interrogated continually, yielding insights for future planning that do not depend on any particular question. At the very least, this needs to be done before and after direct marketing activity as new records are added and old ones updated.

"Regular interrogation improves customer knowledge and aids future planning. It also gives you a view of your database's profile and how it changes," points out Daryl Jay, sales director of Adare Intellidata.

Deleting old data frequently was unavoidable when memory was scarce, but now it is cheap and abundant there is nothing to be gained by regular purging. In fact it is better to avoid this, as one never knows what life may still be left in apparently stagnant records.

"I always look to revalidate an old customer record. Even if you find they don't want to hear from you at least some learning is gained," says Justin Morris, senior account director at The Database Group.

In some cases old data can produce tangible profits. The database for the Olympia Fine Art and Antiques Fair, managed by Hexfax, held details of many visitors who had not attended an event in the past two years.

But before deleting, Hexfax first mailed them to ask if they still wanted to receive information. This achieved a 20 per cent response rate and a significant uplift in attendance.

Value-added services

To get the best results the database management company should not only guard and handle your data but also provide value-added services that actively exploit it. Hexfax recently went the extra mile for an exhibition organiser whose visitor records were held in a separate databases for each show. "For this client we really pushed to combine the databases as this would bring cost savings to the client and allow for more cross-show analysis," says Hexfax sales and marketing manager Eleanor Blacher.

The supplier can also segment the customer base to identify the most valuable customers. "It's absolutely demonstrable that you can split the mailing up into several groups," says Jon Cano-Lopez, managing director of Altwood Systems. "The response in the top group is likely to be ten or 15 times higher than in the bottom one, where you have the wrong profile or haven't heard from them for a while," he says.

The company might also create targeting models, for instance winning back lapsed customers by scoring those that have been lost and focusing on those most likely to return. It can also analyse trends, like noting if the typical customer profile is suddenly becoming younger or older, or changing in other ways.

At a more complex level GB Group occasionally uses modelling techniques that involve 'cueing theory' to assess future probabilities. "A person might stay at a hotel every two weeks but then not appear for a month, and with cueing theory you can predict that kind of behaviour," explains Mooney.

Taking another approach, GB Group helped credit-card insurer CPP by attending to the ordering and sequencing with which it prioritised its telemarketing campaign. This improved productivity in its service centres and outbound activity, yielding savings of £2.4m a year.

Knowing the likely return-on-investment is essential, and a good database management company should create a business plan that establishes reasonable targets. Typically this could be for a five year period and cover all campaign and analytical costs.

Acquisition cost is a crucial factor for some clients, and the longer a customer remains the more profitable they become. For some clients CACI carries out analysis of how this is likely to develop, typically showing a loss in the first year converting to profit in the second and third.

Future requirements

One common pitfall is failing to anticipate future requirements. Problems often arise when an organisation merges with another or changes its strategy.

However well the database works now it may struggle to cope in a changed environment, so when it is being built it should be made future-proof as far as possible.

Checklists are vital to ensure that mistakes don't get through. When data is being extracted it is important to ensure that duplications are avoided and all salutations and other details are correct. For one client CACI runs no fewer than 34 checks before letting the data out of the building.

Many organisations now understand the value of good data but may not always realise how to get the most out of it. And while they can safely leave the day-to-day handling to their supplier, it is reassuring to know that their customer records are not just up-to-date but also yielding the best possible results.

COMMENT

Justin Morris, senior account director, The Database Group - Your data management company is an extension of your marketing team. Its gain is your gain, and it should always be working to improve the return on investment. Treating it as a partner by giving it the information and opportunities it needs will make the relationship work better.

Eleanor Blacher, sales and marketing manager, Hexfax - Many clients ignore or purge records which have not been active over a given period without attempting to reactivate them. But all our research demonstrates that older data often brings far higher response rates than cold lists.

Caroline Kimber, vice president of direct marketing solutions, CACI - It is the responsibility of the database management company to suggest test cells, but it also needs regular feedback from the client and DM agency. Holding a strategy meeting each quarter is an excellent way to share information.

Jon Cano-Lopez, managing director, Altwood Systems - Just because a company has lost contact with a customer doesn't mean that it won't ever deal with them again. If it keeps the record of the details it may pick up a link to the new address in six months time, whereas if the information is ditched it's lost.

TOP TIPS

1. There is no information as good as your own, so refresh the database with transactional data, in real time if possible

2. Stop employees using data stored on individual PCs. This is outside company quality control and subverts vital customer feedback

3. When you use more than one list, merge-purge is essential and will cover its own costs in savings

4. Merge-purge can be used to segment the database in other ways, for instance by gender, giving extra detail for response analyse and list evaluation

5. Code data and use it to personalise printed matter, with the computer automatically converting back from numbers in communications

6. Identify customers as individuals even if they use different communication channels, to avoid duplications

7. Valuable customers will appear on several lists and should be tagged and tracked to identify other hot prospects

8. Purge those who frequently request offers and trial packs but never buy, and abandon poor credit risks

9. Always flag unsubscribe requests on your records instead of deleting them to ensure they are not inadvertently re-activated by a new data feed

10. Maintain a control group or people who have not been contacted or incentivised, otherwise you will be unable to quantify the true effect of marketing initiatives

Source: Mailcom.