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- Key token classification
- Referential identification
- Phonetic similarities
- A final stage of verification and scoring based on pre-defined confidence levels.
Address verification and standardization also must be a constant routing, for every database update and every solicitation base. Depending on the data collection methods, up to 20 percent of a standard list includes incorrect and undeliverable addresses and phone numbers. The process of address verification, cleaning and application of National Change of Address should take place at least quarterly—and certainly before deployment of any major direct marketing campaign.
Finally, optimize attribute append rates; those for screening and model scoring should be more than 85 percent. The accuracy of appended variables should be at 90 percent and more. This varies for categorical (e.g., marital status) or series (e.g., age, income) variables. It also is important to establish more stringent and mandatory data collection rules as part of your CRM system. E-commerce purchases have forced a more complete record entry, although limited to name and address, while other profile attributes are for the most part left blank.
The Strength of the Data
The power of relevancy is undeniable. The million-dollar question is how to develop relevant offers and personalized content to meet your prospects' preferences on a customized level. Amazon has pioneered the recommendation system that is driven by past transactions. It is a standard feature in today's online world to present products that "you most likely would be interested in" based on matching characteristics and similar categories of previous products that you have purchased in the past. The challenge is how to take the product offerings to the next level and strike the right note with each consumer, resulting in higher buy/donate rates.
This is far more of a challenge across prospects where there is no transaction history. Travel companies, for example, would not be satisfied with presenting a prospect a similar trip to the one purchased previously, but need to offer a package that is tailored to the person's needs and likings, with the right attractions and features that meet the person's family situation, hobbies and preferred activities.
To accomplish that bigger goal, marketers must obtain additional attitudinal and behavioral data and then create accurate profiles for each individual. The most precise data is the self-reported information obtained from the customer. In past years, companies have offered different incentives to customers, as well as prospects, willing to fill out surveys and tell more about themselves. This approach is very costly, especially at the prospect level. The level of granular consumer data has eclipsed itself in the last five years, and it will continue to do so in the years ahead. The most prevalent examples are: age, income, assets, home values and Internet transaction behavior.
This deeper level of insight on individuals, integrated with less granular lifestyle/stage and attitudinal data plus the interactions of these variables, enables the expert database marketer to get very close to highly relevant, personalized marketing. One of the first steps in developing such customized campaigns is to determine the segmentation level you need for your campaign. The spectrum of options varies from a basic gender- and location-based segmentation all the way to full profile-based personalization. For example, cell phone companies may be satisfied with the customer's age and marital status to determine which plan to offer, while a cruise ship company would like to learn more about the individual's wine preferences, preferred sports and previous travel destinations in order to optimize the package offered.
To accomplish the best results for your campaign, you need to start with the product definition and characteristics. Recognizing the selling features of your product, or set of products, and to whom they may best appeal helps you select the type of information you would look for in your customer profile. In the example of the cruise company, certain travel packages offer more on-shore time including shopping and golfing, while other packages offer mostly on-deck activities including gambling, shows and other entertainment. Learning the individual's preferences is a key factor in creating a personalized campaign for the cruise company. Based on the individual's hobbies and known touchpoint attributes, the right package with the right creative approach will be presented to the right person with higher probability of generating interest and converting to a sale.
Personalization's Double Bottom Line
The steps outlined above aren't the full spectrum of personalization possible, but they are a good start.
Personalization has additional benefits besides increasing campaign response rates. With consistent and well-crafted personalized campaigns, your customers gain the sense that your company is tailor-made to their needs, that your company as a whole "fits them and gets them." This good will helps you retain your customers over the long haul, encouraging loyalty and word-of-mouth among their friends and families. In today's market, every edge must be used to stay competitive. A complete, accurate and updated customer database is the real competitive advantage a company has.
Renan Levy is president and COO of Intellidyn, a database marketing services agency with headquarters in Hingham, Mass. He can be reached at (781) 741-5503 x105.
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The Business of Database Marketing