Outsource Solutions: Database Marketing
What You Need to Know Before You Append
Alone, the transactional data in your customer database only will tell you how recently a customer made a purchase, how frequently he or she buys from you, and his or her dollar value to your company.
Appending psycho-demographic data to your house file gives you a more robust database. With a more complete representation of who your customers are, you can better tailor your offers and increase response.
When appending general data elements, such as age, income, home ownership or presence of children, contact a minimum of three data providers, recommends Bernice Grossman, president of DMRS Group, a New York-based database marketing consulting firm.
If you are looking for more niche data, where there may be only two or three providers, contact all sources, advises Jim Wheaton, a principal at direct marketing and data mining consultancy Wheaton Group and a co-founder of Data University.
Ask for a Trial Overlay
Most companies will tell you they have the best data. To determine what “best” means, ask each vendor to run a free test. Provide each vendor the same segment of your file to enhance, say 10,000 records, for a trial overlay. Then, compare the results.
If you are serious about improving your house file and have the budget for the project, vendors should be willing to run the test for free. “You are not looking for free data,” says Grossman, who advises you assure participating vendors that you will throw out the data provided by those companies who aren’t awarded the work.
To do an apples to apples comparison, Grossman suggests writing a set of specifications for the trial that is as complete as possible, and inform vendors that to be considered they must adhere to all rules. Tell all participants, for example, if you want them to clean your names or run the file against NCOA before data is overlaid. Specify which pieces of information you are interested in appending, or if you would prefer all the information vendors have on each customer record. Make sure you give all vendors the same number of days to do the test.