In a previous article, ("Segmentation Secrets," Target Marketing, Sept. 1999, pp. 58-62) we examined some of the secrets that are typically uncovered when reviewing marketing data. In this article, we will look at the secrets for the more experienced marketer.
Unlike the secrets discussed in the previous article, "trade secrets" are things that are usually learned the hard way, and not always grasped by people who haven't been in marketing for a while. "Trade secrets" are often the next step up for marketers who are using their databases effectively.
By going from a snapshot analytical approach to reviewing marketing data over time, and by looking at many different situations, I've so far uncovered here a dozen of the most important "trade secrets" for database marketers. Here they are:
Take an iterative approach to building the marketing database. The most important thing to do with marketing data is to use it—right away. Building the perfect marketing database is time-consuming, expensive and will rarely achieve expectations. Perfection is impossible.
There are many surprises found in marketing data. How data is captured will change over time, data may be omitted for a variety of reasons, and the market itself changes. No matter how well the computer and software works, there is no way to know how well a marketing database works until it is used and tested for marketing.
A better strategy is to start with what is available now, make mistakes on a smaller scale (while still learning) and grow the database effort through lessons learned along the way. Fortunately, the most valuable marketing data is usually the easiest to uncover. This makes starting small and improving over time a much smarter and safer way to go—both financially and career-wise!
Buyers of many different items are more loyal and more profitable than customers who cherry pick only a few. There is a strong positive correlation between customer spending and the number of product categories customers buy. Most marketers look at RFM, or make reselling efforts to buyers of certain product categories.