When it comes to DM, many organisations build their business plans around ever-increasing volumes. Yet the quest for precise targeting inevitably leads in the opposite direction -- quality rather than quantity of data is the key. So why is the mass mailing route still so popular?
One of the dilemmas is that consumers have become ever more reluctant to provide detailed data, and even when they do provide information there are strict rules governing how it can be collected and used.
With neither instant access to this sort of specialist data, nor the power to exploit it, perhaps it is understandable that high-volume, mass-market strategies tend to prevail. If we are honest, clients and their agencies are guilty of succumbing to the temptation.
But companies should be challenging this mindset. For a start, they need to address how they store, manage and use the data that they do have available to them by reassessing the role of the database.
Whereas customer-marketing databases are becoming more common, investment in robust prospect marketing databases is still a rarity. Prospect data still tends to be sourced via traditional list-broking sources.
However, advancements in technology and more sophisticated and flexible attitudes of the major data owners to the terms for accessing their data, means that the development of customer and prospect databases are much more straightforward and less cost-prohibitive than in the past. A return on investment can often be achieved within as little as two years.
A database delivers a number of distinct data opportunities: the chance to build up a promotional history, the opportunity to hold and utilise specific data appends available from the original data supplier, such as date of birth, presence of children, etc, and the enhancement of the database with a variety of derived data.
Together, all this information can be used to make more intelligent and informed selections using powerful statistical selection models to replace more normal profile or manual selections -- a huge step forward from traditional list rental for prospecting, and standard selections for customer marketing.
If it is allowed to touch upon other elements of the DM mix such as creative execution, planning and media strategy, segmenting the database in this way opens up endless opportunities. For instance, a range of creative ideas can be developed to ensure that the proposition is tailored to specific target groups.
Previous communications and, if appropriate, the nature and detail of any existing relationship can also be acknowledged and leveraged in the executions.
Another opportunity is tracking and planning when customers and prospects have been, or will be promoted. The technique is extremely valuable when planning marketing activity across a range of media channels.
Ensuring that discrete audiences are targeted with the right number and type of promotions, prevents the perception of "junk mail" and, as a result, significantly improves response levels.
A further option is the geographical analysis of customers and prospects. This can provide valuable information on relative market penetration and give indications of the available potential. Knowledge of customer penetration by region can significantly enhance response from prospect databases.
This information can also be used to assess the appropriateness of retail or sale networks, and provide indicators as to how to optimise these channels.
The geographical analysis will also help identify media opportunities, enhancing the planning of integrated media campaigns in areas with the highest concentration of potential.
Clearly this approach requires an investment of time -- it is no instant "off the peg" solution. But organisations are making a false economy to assume that the quick fix of escalating volumes will always save the day.
It will not be long before they find the market advantage has been snatched away by those who have taken the trouble to nurture and develop their customer data.
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