the Case for an INTEGR TED DATAB SE

May 01, 2004 9:30 PM  By

If you’re like most catalogers, you do a great job of obtaining information about your customers — often down to the smallest detail of each order. But when it comes to using that information to hone your marketing plans, you may fall short. So many catalogers capture information but do not know what to do with it — and end up holding on to it for some future magical project that will solve all of their promotional problems.

Simply collecting data is not enough; you must be able to analyze your information. The risk of doing nothing is too high. This is where an integrated marketing database comes in.

SO WHAT IS AN INTEGRATED MARKETING DATABASE?

An integrated marketing database is an infrastructure that allows you to import, store, and maintain customer and prospect data from all touch points and across all channels in a single place. Storing your information within a single repository lets you improve campaign management, make faster decisions, react more quickly to changes in the marketplace, and decrease data-processing times.

Catalogers are slowly but steadily discovering that to implement best practices, they need to tap the benefits of a best-in-class, integrated marketing database.

For instance, a marketer wanted to determine the impact of its weekly circular. Using an integrated database, it was able to compare sales between customers who received the circular and those who did not. Surprisingly, the comparison showed that there was no impact in sales from the circular. The potential to redirect marketing dollars was enormous.

Thanks to integrated databases, some catalogers are discovering new ways to combine mailing history, prospecting information, and lists. Others are gaining insight into cross-selling and upselling. An integrated approach allows for faster market changes; you can uncover patterns in your customer impact strategy that you would never have known before, shedding new light into how you spend — and should spend — your marketing dollars.

An integrated marketing database can provide three main levels of integration:

  1. Integration of customer and prospect information

    Catalogers typically keep their customer and prospect data housed in separate places and then market in different ways to these two groups. Integrating your customer and prospect information, on the other hand, allows you to use the same database to understand and market to both groups.

    Catalogers also typically manage their prospects through a merge/purge environment, in which mailing campaigns have deadlines long before the catalogs actually drop. An integrated environment changes that by providing real-time access to information and allowing you to include information up to as little as 48 hours before a mailing.

  2. Integration of customer relationship information

    An integrated marketing database enables you to track something that catalogers have been struggling with for years: the customer relationship. Catalogers have traditionally treated each catalog mailing as a single point in time, a “moment of truth” with their customers. The problem? Until recently, mailers could not link one activity to the next, so they weren’t getting the complete view of the customer relationship.

    By leveraging an integrated marketing database, however, you can track the customer life cycle and answer questions regarding when a customer made his first purchase and his second purchase, how long it took to convert the customer from a one-time to a two-time buyer, how many mailings it took to convert a customer from one stage to the next, and the like. This critical information can help you measure the effectiveness of your mailings, improve customer value, and design marketing communication streams to minimize costs and maximize revenue.

  3. Integration of marketing channels

    Many catalogers have been quick to expand into new channels, and now they are finding that these channels need to work in unison. Capturing every piece of information that you can on your communications with your customers is therefore essential. An integrated marketing database allows you to track and interpret customer activity across multiple inbound and outbound channels, including direct mail, the call centers, the Web, and retail. By looking at the panoramic picture, you can then better understand — and influence — customers’ behavior. This information also helps you put out highly targeted campaigns that include customized messages suggesting a future purchase based on past behavior.

    Channel integration also eliminates conflicts between offers, so that the customer will receive the same offer across all channels. Customers do their homework, and they have picked up on the tactics that marketers use to optimize each channel. For example, some customers use a tracking code from one channel to get free shipping on their purchase in another channel — and this is costing catalogers money. This is a prime, and all too common, example of how a lack of integrated information prevents you from making the best decisions for your business and getting results.

MAKING THE SWITCH

Many catalogers are facing a paradox. They know what they want to do, but they can’t get the infrastructure in place to work for them. Others may be reluctant to switch to a new infrastructure because their current approach seems to get the job done. And some simply don’t want to stop what they are doing because they are focused on getting the next catalog out the door. Yet to be successful, all your channels need to work together in an organizational structure that supports the underlying integration of channels. And consider the costs of having separate databases for customers, for prospects, and for each channel — is it really worthwhile to pay to maintain your customers in multiple places?

Time is another consideration. With an integrated marketing database, catalogers can cut the time needed to prepare a campaign in half — or better. What used to take three weeks to execute now takes as little as five days. By shortening your cycle time — everything from getting names to dropping the mailer — you can spend your marketing dollars smarter. In other words, can you afford to wait?

Once you decide to integrate your databases, you need to determine if you have the resources and the expertise inhouse or whether you’d be better off outsourcing some or all of the work. Also consider your available analytic capabilities. For your integrated marketing database to be fully effective, you must be able to create predictive models, take analytic approaches, and adopt strategies that will help you predict the behavior of your customers and your prospects.

All catalogers can benefit from an integrated marketing database, but it does involve a commitment of time and money. Before you do anything, take an honest look at what you want to do with your information. If cost is an issue, look to implement an integrated marketing database in phases.

A key factor, and an often overlooked one, that can make or break implementation of an integrated database is the organization itself; your catalog, Internet, and retail teams must work in unison. One successful cataloger had all of its channels report to the same person, which reduced decision-making time and eliminated intradepartmental fighting. Compare this to another cataloger, whose Internet, catalog, and retail divisions could not agree on the types of data that should be tracked and the best way to organize the information.

Data integration isn’t impossible — it’s absolutely doable — but it does take a high level of commitment and determination. Once all of your data are in one place, they will provide more value than ever before. An integrated database will enable you to get the answers that you need quickly and help you make decisions faster.


Dan Wells is vice president of the Catalog Retail Services Group, Merkle Direct Marketing, a Lanham, MD-based provider of database marketing services.

Where Do You Stand?

How advanced is your data management? See which of the levels below best describes your company.

LEVEL 1: TRIED AND TRUE

You practice name/address hygiene and eliminate duplicates on a batch-by-batch basis.

LEVEL 2: FIRST STEPS

You take an integrated approach to customer and prospect data, but only when it’s time to select lists. You update your information quarterly.

LEVEL 3: GETTING BETTER

You have a completely integrated, single view of each customer and prospect. At a moment’s notice, you can access a full history, and your customer response reports are updated within days.

LEVEL 4: WELL DONE

All of your marketing channels are integrated so that your data, campaign information, and performance metrics are together.

LEVEL 5: GRADUATION

You are a sophisticated cataloger, practicing real-time updates based on triggers such as life stage and purchase status. Your multiple channels, including your Web and call centers, are fully integrated and report back seamlessly.
DW