Database: Grow Your Customers
Whether in marketing or life, having a relationship with someone is more than just a series of transactions. People's wants, needs, desires and feelings change over time and result in different responses throughout different situations. While firms often measure the relationship based on transactions, the transactions themselves are not the relationship but merely a measurement of the activity in the relationship up to that point.
Life events are sign posts in the relationship that signal when a contact's wants and needs likely are to change, often in dramatic fashion. Even if there is a very long train of transactional history with a customer, when certain life events occur it signals the train is about to switch tracks.
Overtargeting can occur in relationship marketing when life events are ignored. For example, in the marketing classes I teach, we use the word "Oldsmobile" as a verb. It means "to follow one's best customers into the grave." Oldsmobile had happy, loyal customers, right up until the end. It focused on its best customers—older, repeat buyers—without replacing them with future best customers.
EDM brings another discipline to database marketing in general but does not replace transaction-driven direct marketing. EDM is a tool that gives marketers additional insight into why customers do what they do, helps explain why loyal customers move away and guides what to look for when building toward tomorrow's loyal customer base.
A good example of how EDM can be applied is the program premium dog food brand Eukanuba developed in Europe. Breeders were invited to join special clubs, which entitled them to trial kits (including free food, brochures and coupons) they could hand out to their customers upon purchase of a puppy. At this point, the dog breed and date of birth were captured and fed into the central database, earning the breeders certain amounts of free dog food.