Data Mining in the 21st Century
Data mining in acquisition marketing is the identification of attributes across an experiential set of solicitations, responders and converters that discriminate between those prospects who have exhibited the potential to respond or convert and those who have not. This type of data mining, done correctly, yields predictable results.
A data mining paradigm has occurred with an exponential increase in “atomic” (i.e., single element) or transaction-level data; the tools and experience already exist to leverage this new, powerful information to provide marketers with better performance across greater volumes of prospects.
The most immediate aspect of data mining for direct marketers is to begin making better use of the available transaction and behavioral data, turning compiled data into response lists. The evidence of quantitative boosts in campaign performance (increased prospect volumes and the dramatic reduction in archaic merge processes) is abundant. Let’s review several examples across a range of goods and services.
Bar None, a national automotive credit service organization that uses broad market media, the Internet and direct mail, has been driving buyers into auto dealerships at an amazing rate. Deploying credit-based models, Bar None is achieving response rates greater than 1 percent. This is double the performance rate other marketers are realizing in marketing to prospects (excluding former dealer customers) for dealership clients. Where much of the automotive industry targets by distance to the dealership, Bar None created a more precise prospecting approach in targeting by driving distance, prior auto ownership history and a set of credit bureau-specific models that predict a buyer’s likelihood to respond to a direct channel offer as well as to convert.
According to Dan Staub, marketing executive for Bar None, “We are just beginning to tap the power of this high-level targeting ability. We expect that advancements in personal messaging, multichannel [e-mail and direct mail] campaigns and continuous model refinements have the capability to further boost performance across larger prospect bases for our dealer clients.”