Does the Shoe Fit? How to Select Demographic Data to Enhance Yo
Why Purchase Demographic Data?
There are several reasons for appending additional demographic data to your file.
Profiling. Sometimes marketers gain a better picture of customers by looking at demographic characteristics. Understanding who is buying certain products can help refine the message presented in promotions and may be helpful to prospecting by suggesting certain types of lists or selects. Determine which demographic elements would be particularly insightful to marketers at your company.
Creating subgroups. When profiling customers, subgroups may be discovered that deserve different treatment. For example, profiling jewelry catalog customers may reveal two main groups: middle-aged men and teenage girls. Perhaps the men are buying the jewelry as gifts, while the young women are buying for themselves. The marketer could then create two versions of the catalog, each presenting an appropriate message to the target audience.
Targeting. Purchase information is usually more powerful than demographics, but demographic data can help, particularly when transaction data are sparse. For example, demographic elements could improve a model that predicts purchase likelihood of one-time buyers repurchasing. Or, splitting under-performing RFM cells based on demographics may reveal portions of cells that could be mailed profitably.
Picking A Data Supplier
There are four main issues to consider when evaluating demographic data vendors. The relative importance of these factors will depend on how you plan to use the data.
Overall vendor relationship. Would this vendor be easy to work with and provide quick turn-around times? Are the prices competitive? Would the vendor provide guidance in using the data? Are all the data elements you want available? Ask vendors to walk you through their products, the available fields and their data sources. Discuss sample reports and case studies.
Data coverage. To evaluate data coverage for your company, ask each vendor to overlay a sample of your file and produce match rate reports. Most vendors will perform this initial work at no charge. The top-level rate is the percent of your file that the vendor can match to its database. A customer who matches will receive data for at least one overlay field.