Elderhostel's Mei Fulton Discusses the Nonprofit's Data Mart
Using the patience that comes with age, Boston-based travel organization Elderhostel knew it could greatly improve efficiency by adding a data mart to its direct marketing strategy. Beginning implementation in September 2006, the 34-year-old nonprofit that provides educational travel opportunities to the 55 and older crowd brought the data mart live in May 2007.
Tracking data from direct marketing interactions with its more than 160,000 yearly customers, the first solid trends became evident in early 2008. Now, Mei Fulton, Elderhostel's director of customer relationship management, says the organization that manages more than 400 multichannel campaigns a year is seeing a 20 percent lift in profit per contact. While pleased with the results, she cautions other marketers that "you can't expect [an] overnight benefit."
Still, says Charlotte, N.C.-based Quaero, a CSG Systems solution and the company Elderhostel chose to create and host the data mart, there are more direct marketers who are taking a longer-term view toward improving their direct marketing strategies. Requests for data marts and marketing dashboard-type reports are on the uptick.
Here's Elderhostel's story.
Target Marketing: What event signaled the need for Elderhostel to increase its efficiency with a data mart?
Mei Fulton: ... We have operational systems here where we have a fairly robust IT organization ... I knew there [were] always pros and cons to [having] one data mart or database that really house[s] all your operational data, plus your marketing data; always trying to split that into different marts and just know some of the efficiencies you gain from that. ... We saw also the need to bring to market some of the campaigns more efficiently, which, rather than taking a day to develop a campaign and roll that out … it just wasn't very efficient. And also, from a [business impact] perspective, to gain some of the intelligence that we needed as an organization, we needed something a little more robust.
TM: How have the hosted database, improved customer segmentation models and analytics improved Elderhostel's efficiency and resource allocation?
MF: ... In terms of segmentation, with this new solution, with our new marketing database platform, where we have a [business impact] tool and a campaign management tool that sits on top of it, we're able to refine our segmentation scheme more finely. ... So, on a couple of fronts: because we were able to fine-tune our best customers to market to and also to hone in the targeting, with this economy we had to make some decisions on our mailing campaign, reduce our mailing costs. ... And then, with these economics, what we've done is really try to take a step back, really try to understand from a P&L perspective who are the best customers and also who we call our nonparticipants to mail to, to be able to get the movement that we need to support the business model. So, as a result, we have seen more than a 20 percent lift, in both response and from a P&L-per-contact perspective, and that's a combination of being able to target more effectively and really kind of trim the fat. ...
TM: Is this data mart part of an overall plan, perhaps the building block for a marketing dashboard, to streamline Elderhostel's direct marketing efforts?
MF: I would say the data mart is more of a central nervous system for database marketing because you really need the hub and spoke for some foundation to start gaining more intelligence to develop more strategic and science-based marketing strategy.
TM: Considering Elderhostel advanced from a one-channel marketing strategy—direct mail—to an approach involving a call center, print, e-mail, Web and affiliate marketing, how will the data mart enable Elderhostel to expand its direct marketing efforts?
MF: ... Because it's the integration of the offline sales information, the Web data, the e-mail data, profile data that we have; it's really putting those pieces in one area where you can access all of the information together. ... Our vision always is to cross-pollinate because our customer base is a little unique. ... I mean, look at the demographics. So it's difficult to say, "Yes. Everyone's on the Web now." Does that mean everyone's going to be purchasing on the Web? Not necessarily, in our case.
TM: How does this data mart help Elderhostel improve its customer service from a resource allocation perspective?
MF: We do have a large number of customers who prefer to talk to someone at the call center, just because they like the personal touch. So any interaction that we have, any touchpoints that we have—for example, if we deploy an e-mail campaign—we know that may generate calls into the call center. ... We're constantly working across departments to make sure that everyone's aware of the different initiatives that are going on.