TM0203_Cover/Seven Database Analysis
By Lisa Yorgey Lester
Your housefile is your greatest asset. This treasure trove of customer data can be analyzed, enhanced and massaged to better help you understand your customers, and in doing so, better target your audience.
Here are seven ways three direct marketers are getting more mileage from their prospecting efforts by working their housefiles.
#1 Refine your target audience. Rather than mail an entire prospect file, or a portion based on a random selection, Interline Brands, a distributor of maintenance and repair products, looks at where it was successful geographically, and then selects prospect names based on its findings. It repeats the process and further refines the list by looking at other demographic data—such as number of employees or units—and applying this information to the prospect file.
According to Pam Maxwell, Interline Brands' vice president of marketing, since it began using this technique in 2002, the company has lowered its acquisition costs by 13 percent and reduced its mail costs in one major market segment by 20 percent.
#2 Improve your price and product selection through close examination of customer data on the transaction level, offers Maxwell. In looking at what its customers are buying, and at what price, Maxwell is better able to improve Interline Brands' offerings in its monthly mailings.
#3 Determine the frequency and type of offer prospects should receive by profiling your customer data. Interline Brands analyzes attributes such as average spend, business type, business size and other available data for each of its markets. This insight is used to rank prospect files based on their resemblance to current customers. It then sends its most frequent and best offers to its best potential prospects.
#4 Find new markets by locating geographic "holes" or a propensity to buy specific products. For example, a B-to-B firm may look at its data by geography to determine if it has adequate penetration within specific markets. These data can be used to determine if new hires or additional resources are needed to gain a stronger foothold in the market.