Data

Database Makeovers
July 1, 2004

Five companies turn data dilemmas into marketing solutions Too often, companies think of their databases as … databases: collections of names and numbers, of dates and dollar amounts. And technically, that’s what they are. But if you think of your database as just names and numbers, that’s all you’ll get out of it. Your data is your record of customer interaction; as such, it is your most valuable commodity. Like the story of the jeweler who locked up his customer list—not his diamonds—in his safe each night, marketers must revere their databases. The sad fact, however, is that much data is in disarray.

Editor’s Notes: Data Is Not the Enemy
July 1, 2004

Have you seen the June 2004 issue of Reason, which calls itself the magazine of “free minds and free markets”? Hailed as a pioneering venture into the future of mass customized magazines, this issue used database segmentation and printing technology to create custom covers for most subscribers. Each cover featured an aerial photo of the subscriber’s neighborhood, with a red circle around his or her particular home. The inside front cover offered Editor in Chief Nick Gillespie’s editorial, personalized with facts related to the subscriber’s location, such as commute time, percentage of neighbors with college degrees, etc. Even the back and inside back covers

Prospecting Done Right
June 1, 2004

Long-term Strategies for Profitable Customer Acquisition Prospecting for new customers is risky business. It’s especially risky if you don’t evaluate your prospecting efforts thoroughly. Slice the numbers one way, and you won’t grow your business as quickly. Slice the numbers another way, and you may not yield a profit from new customers. Evaluating your prospecting efforts accurately and with precision requires a minimum of five steps: Step #1: Identify your tolerance level for time between acquisition and breakeven. Step #2: Develop a long-term value (LTV) model. Step #3: Properly allocate unknown order sources back to prospecting. Step #4: Use the LTV of your

Prospect Databases ... A New Direction for Today’s Mailer
June 1, 2004

Despite the success of the Internet as a lead-generation tool, direct mail continues to be the best way for many companies to acquire new customers. During the past two decades, mailers have developed very efficient and profitable direct mail methods. Intense competition has reduced the price of rental names to make direct mail highly lucrative when the right offer is sent to the right audience. Most marketers think that after 20 years of direct mail experience the industry has tried everything—but they’re wrong. What I’m going to outline in this article will astonish some long-time direct mail practitioners. It represents a new direction

A Billion-Dollar Bank Takes Steps to Retain Customers
May 1, 2004

BankFinancial, a $1.6 billion financial institution, is no stranger to predictive marketing. It has been reaping the benefits of it for some seven years. Recently, however, BankFinancial executives wanted to be more proactive with efforts to retain the approximately 1.5 percent of BankFinancial customers who left the bank each year, but felt limited in their ability to mix data sources and segment effectively. They enlisted SPSS’s recently released PredictiveMarketing software, which enables the integration of data sources, such as records at the transactional level, account level, and even customer and household level. Staff now can “slice and dice” data in many ways. “It’s like

Database Special Report: Beyond the Black Box
May 1, 2004

Segmentation Is More Than a Tactic—It’s Also a Strategy. Using statistical techniques to segment customers is an effective tactic, but how you market to these segments is a strategy. Rather than operating in a vacuum, statisticians and marketers can work together to not only predict behavior, but change it. For many direct marketers, state-of-the-art segmentation means using the database to determine, with the greatest possible accuracy, which customers will respond to a given offer. They often point with pride to a statistical technique that selects the best 20,000 names from the database. These modeling techniques typically are employed in a “black box” fashion,

Data Driven
May 1, 2004

A robust, central database drives GreenPoint’s profitability in the banking sector Pareto’s Principle holds that 80 percent of a company’s business is generated by 20 percent of its customers. In banking, the ratio is more like 90/10 or even 95/5, points out Bob Lord, vice president of strategic marketing services at Harte-Hanks. This makes identifying, retaining and maximizing the profit potential of this top performing tier of customers essential to a bank’s overall profitability. Banking is a highly competitive financial services sector that has witnessed a great deal of merger and acquisition activity in the past 10 years. This flurry of activity was in part responsible

Data on Demand
May 1, 2004

Two New Data Management Systems Help Miles Kimball Get Nimble. Miles Kimball, a multi-title catalog company in Oshkosh, Wis., has employed a two-pronged technological approach that gives it a clearer, real-time vision of the company’s front- and back-end operations. Armed with these tools, managers now can make business decisions—on everything from marketing campaigns to staff scheduling—by using data available on their own desktop computers. Managers no longer have to ask other departments such as IT for lengthy reports that often can take days to generate. Instead, a question, such as how many returns it’s getting on one particular SKU listed in the latest catalog

Surrounding a Market
March 1, 2004

A Powerful Blend of Direct Marketing Science and Market Research Drives The Hartford’s AARP Insurance Program. Every seven minutes, a U.S. adult turns 50. For AARP, a nonprofit membership organization that advocates on behalf of Americans age 50 and older, that translates into a little more than 200 new potential members a day. And for The Hartford, a 190-year-old investment management and insurance firm based in Hartford, CT, it also means a steady influx of new names for prospecting. Due to The Hartford’s relationship with AARP as the exclusive provider of discounted automobile (and homeowner) insurance to the association’s members, it has more of

Halt Customer Defection
March 1, 2004

Keep Your Customers Using Analytic Models Imagine being able to predict which of your customers will stay your customers. To achieve this heightened understanding of customer behavior, many marketers are turning to modeling. When performed properly, modeling can help organizations predict which customers will remain and which ones will defect—or churn. An effective modeling approach takes into consideration a wealth of information from a variety of sources, and can help marketers determine the best allocation of their marketing dollars to improve ROI. Defection erodes your customer base and occurs with the cancellation of an existing contract, non-renewal at the termination date of a contract,