Best Practices Your Path to World-class Direct Marketing
Growth and profit is in the changing of your offer, not in cutting the waste from your list. Few companies shrink to greatness. Unless you can translate your data into variables into analysis into new offers, your company will not generate ROI on clean data. … Profitable customer contact pays for cleaning the data. The more money you make, the more often you can interact with your customers.
Best Practices: Predictive Analysis
While analysis of individual direct marketing campaigns helps point you in the right direction for future efforts, nothing beats ongoing data reporting to uncover trends in key statistics, say Rhonda Drake and Perry Drake, proprietors of direct marketing consultancy Drake Direct in New York.
This type of analysis "allows managers to get a full picture of the health of the business, and change messaging and offer strategy to encourage growth," they say.
Two primary best practices in developing trend reports lead to more specific criteria for monitoring customer trends. To predict your future direct marketing steps, you need to:
1. Define homogeneous groups for reporting.
Look at a variety of segments to uncover a shift in trends when one arises, say the Drakes. Some marketers segment based on RFM (recency, frequency, monetary value), and others on major affinity groups. In looking at your customer data based on a single segmentation strategy, however, you may miss a trend shift that could be identified if the data was segmented another way.
Drake Direct advises marketers to consider these additional segmentations:
> Demographic lifestage. Depending on the business, consumers migrating through lifestages may provide important communications opportunities for marketing. Segmenting current customers by lifestage and noting key events can be important for sizing up market opportunities.
Key events to track: purchasing a new home; moving; marriages; births; and retirement.
> Marketing cohorts. Just as a consumer's lifestage is important, his lifestage with a particular company or product group also is significant. Understanding the ebb and flow of the internal cancel rate of a business can be done by trending cohort groups (groups of customers acquired at the same time). In addition to grouping customers by their time of acquisition, the specifics of their initial response can provide a method of sub-segmenting.