Data Mining - From Dust to Diamonds (1,194 words)
Let's see a show of hands: How many of us self-professed direct response marketers cringe at the mention of the ever-popular industry term "data mining"? Jargon such as Response Reference, Relational Data Models, Genetic Algorithms or Breeding the Best Predictors has left countless successful marketing professionals dazed and confused.
Granted, all this technical terminology is enough to give anyone a bad flashback to high school calculus, but contemporary marketers need not feel intimidated by all this techno-talk. The statistical side of data mining certainly has its place and its experts, but most marketing professionals have a much easier time taking a more familiar perspective. Knowing customer purchasing habits—including frequency, price points and preferred medium—remain any marketer's best tools. Armed with this valuable information, you can then create a winning program to cross-sell or upsell your customer file both on the phone and through the mail.
You Must Remember This: A List is Still A List
Start with the fundamental marketing truth: Your customer base is a gold mine, and you can always learn more about it. The simple exercise of taking a hard look at certain critical customer attributes is the first step in the "lay" person's data mining process. How many times have you abandoned a potential direct response campaign because of a "bad" segment's performance in testing? Maybe your database doesn't produce the kind of hard numbers necessary to roll out a large-scale campaign through the mail or on the phones, so you decide to pull the plug and move on to the next program.
Possibly the pitch you had in mind didn't work with the list segment you had to work with. Or perhaps the driving factor in the program's success—say, an incentive to purchase—cuts too far into your margins after allowing for returns and shipping costs. In any case, your program is on the endangered species list, and the records are dwindling fast. Take a step back and consider an entirely different approach. Letting go of an offer that you have tweaked and nudged to perfection can be the toughest step in finding the answer to success. But, as an old song says, that may be the best time to "open a new window."
The key in realizing a program's potential through database mining can be as simple as taking what the file offers—or recognizing its limits. For example, experienced marketers wouldn't try cross-selling an $800 piece of exercise equipment to $20 workout video buyers. Sure, there's a relationship between the products and the expressed interest of the database, but that kind of mining will get you little more than a long ride down a dark hole in most cases. The best database miners know that you may need to dig in some unusual places because the truest diamonds in the rough only surface with a little more work.
Case in point: Continuity programs abound in the direct response industry with books and tapes, cosmetics and a variety of foodstuffs leading the way. However, content with a successful program, some continuity vendors haven't dug as deep into their database as they could have. Yet, uncovering your next marketing gem could be as simple as polishing a few of your existing stones.
Admittedly, some products are better suited to continuity programs, and some continuity programs are better suited to cross-sells, upsells or even additional continuity offers.
You know your customers have purchased from you before, and some are still buying the original continuity offer. But, you ask, how does that necessarily relate to data mining? Well, if you happened to blink just now, you could have missed it! Your customers' willingness to purchase from you is the very reason why they are prime candidates for database mining.
They like your products. They buy your products. They trust you. It is the perfect marriage from a direct response perspective. Key Media, based in New York, understands this relationship and is an excellent illustration of mining some familiar territory with outstanding results.
There's Gold In Them Thar Hills!
As the direct marketer for a number of successful infomercial products including the Aspen Wellness Diet, Key Media had a file of previous, one-time, 7-day Aspen Wellness purchasers who had bought 0-18 months ago via an infomercial, and turned down a 4-day Maintenance Diet continuity offer by phone. Based on the previous buying relationship, this was a classic data mining opportunity. Key Media worked with InfoCision to develop a continuity program and premium offer to turn these declines into lucrative, long-term sales.
Key Media went back and offered the 4-day Maintenance Diet to the same segment of buyers who had turned it down via telephone once before. Every three months, the customers received a 90-day supply of meals and a variety of soothing and relaxing herbal teas. The program included an instructional booklet to explain how the diet worked and how to realize its maximum benefit. The plan sold for $89.95, or three monthly payments of $29.95. Key Media included the Aspen Wellness Hi-Energy Fitness Video as a premium and offered the Synergy Vitamins for $19.95 as an upsell.
We educated the telephone sales reps and trained them on all the features and benefits of the 4-day Maintenance Diet. In fact, some had personally used the product and provided real life testimonials for the sales presentations. This in-depth preparation allowed the TSRs to discuss customers' purchasing histories while reintroducing the 4-day Maintenance Diet.
Key Media knew the best way to mine this database was through a detailed explanation of the offer and a slightly different premium. The telephone presentation emphasized the diet's benefits, the convenience of the automatic delivery process and the option to call the 800 number to cancel future shipments. Clarifying the offer assured the customers of the proper understanding of the product and the continuity commitment. Adding a new premium helped differentiate it from past offers and kept the customer interested.
Key Media tested the original offer and premium package and realized that the vitamins had a higher perceived value than the video. (It's no secret that if your customers don't recognize your premium's value, your premium will fail.) Key Media responded by offering the package with the vitamins as the premium and the video as the upsell. As a result, the response rate increased 3 percent to 5 percent, making the program a success.
Mine Over Matter
This is just one example of some creative database mining that paid off big for a marketer, but it makes the point effectively. The lesson learned is that direct response success comes in many different packages, and the willingness to do a little digging can unearth some real marketing finds.
The folks at Key Media donned their mining hats and unearthed what turned out to be a successful program by prospecting into familiar territory. You, too, could find the key to data mining success lies in your ability to recognize each program's potential wealth, one nugget at a time.
ALISA GETZINGER is vice president, direct response marketing, for InfoCision Management Corp., a telephone marketing company in Akron, OH. She can be reached at (330) 668-1400.