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Look to your ultimate business objectives to determine what data is worthy to collect and keep
By Irene Cherkassky
Common practice suggests that when you start any endeavor, you always should start at the beginning. However, when it comes to data collection, it’s far more advantageous to start at the end.
“Trying to decide what data you want without having a very clear picture of what it is you’re trying to do—what are the business objectives—[is like] shooting in the dark,” explains Chris Lucas, vice president of product management for the Sales and Marketing Solutions group at Short Hills, N.J.-based D&B, a global provider of B-to-B data information and solutions. “It starts with a clear articulation of what it is [you’re] trying to do, then work backward to the data information you need to support that business’s objective.”
Having a clear understanding of your business’ goals will help you home in on data elements that are most relevant, leading the way to a database that can underpin effective marketing campaigns, boost profits and be cost-effective.
The Objectives
One of the most important questions that will help shape your data collection is whether the data will be used primarily for customer acquisition or to increase the value of your current customers and manage communications with them. The answer will help guide your database design.
For instance, on the consumer side, Maria Marsala-Herlihy, senior vice president, strategic consulting and analytics for KnowledgeBase, describes, “There are probably 10 to 12 basic demographic fields that are going to be helpful for everybody, but are critical on the acquisition side.” This key suite of elements includes age, income, date of birth, net worth, presence of children, marital status, homeowner status, what type of house they live in, family composition, and length of residence. Additional behavior-based factors to consider include:
* How many mailings did it take to get a customer to convert? This will help gauge what it will take to acquire more customers.
* If more than one creative is used to gain new customers, which was more effective?
* What time of year did the customer convert? Seasonality is key to understanding where and when a product or service will be more in demand.
If the focus of your database purely is managing your own customers, rather than acquisition, you must ask which pieces of information are going to significantly impact your ability to increase the value of a customer, says Marsala-Herlihy. Recency, frequency, monetary value (RFM) data are essential to any continuing marketing efforts, she says. As well, understanding the details of the customer’s first interaction with your company is vital. “[In] every lifetime value study I’ve ever done, that first interaction is so telling,” says Marsala-Herlihy. “It’s very predictive long-term, and that’s almost across all industries.” This includes what customers bought, how much they spent, whether they bought across categories, and how many communications it took for that customer to convert.
By Irene Cherkassky
Common practice suggests that when you start any endeavor, you always should start at the beginning. However, when it comes to data collection, it’s far more advantageous to start at the end.
“Trying to decide what data you want without having a very clear picture of what it is you’re trying to do—what are the business objectives—[is like] shooting in the dark,” explains Chris Lucas, vice president of product management for the Sales and Marketing Solutions group at Short Hills, N.J.-based D&B, a global provider of B-to-B data information and solutions. “It starts with a clear articulation of what it is [you’re] trying to do, then work backward to the data information you need to support that business’s objective.”
Having a clear understanding of your business’ goals will help you home in on data elements that are most relevant, leading the way to a database that can underpin effective marketing campaigns, boost profits and be cost-effective.
The Objectives
One of the most important questions that will help shape your data collection is whether the data will be used primarily for customer acquisition or to increase the value of your current customers and manage communications with them. The answer will help guide your database design.
For instance, on the consumer side, Maria Marsala-Herlihy, senior vice president, strategic consulting and analytics for KnowledgeBase, describes, “There are probably 10 to 12 basic demographic fields that are going to be helpful for everybody, but are critical on the acquisition side.” This key suite of elements includes age, income, date of birth, net worth, presence of children, marital status, homeowner status, what type of house they live in, family composition, and length of residence. Additional behavior-based factors to consider include:
* How many mailings did it take to get a customer to convert? This will help gauge what it will take to acquire more customers.
* If more than one creative is used to gain new customers, which was more effective?
* What time of year did the customer convert? Seasonality is key to understanding where and when a product or service will be more in demand.
If the focus of your database purely is managing your own customers, rather than acquisition, you must ask which pieces of information are going to significantly impact your ability to increase the value of a customer, says Marsala-Herlihy. Recency, frequency, monetary value (RFM) data are essential to any continuing marketing efforts, she says. As well, understanding the details of the customer’s first interaction with your company is vital. “[In] every lifetime value study I’ve ever done, that first interaction is so telling,” says Marsala-Herlihy. “It’s very predictive long-term, and that’s almost across all industries.” This includes what customers bought, how much they spent, whether they bought across categories, and how many communications it took for that customer to convert.
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