Five Advanced Database Marketing Techniques to Boost Your Business

Direct marketers are facing more challenges than ever before. Increased competition, new media channels, and a pending USPS rate increase are creating an environment in which traditional, tried-and-true list selection techniques that worked well in the past are failing to produce the ROI expected by chief marketing officers today.

Fortunately, you can use advanced database marketing techniques to create an advantage over the competition. These techniques, which were once complex and difficult to implement, are being adopted with increasing frequency by sophisticated direct marketers thanks to significant recent advances in database marketing and data management technologies.

In this series, we’ll discuss several database marketing techniques being used by some of the nation’s leading direct marketers and show how these techniques have evolved. When implemented properly, these techniques create a competitive advantage and drive significant performance results:

  1. Advanced predictive modeling techniques – Many successful direct marketers can maximize the results of their programs by implementing “smart” predictive modeling techniques. More specifically, they apply a segmented modeling strategy and work to continuously improve their predictive models over time. This approach enabled one direct marketer with an annual circulation of 120 million pieces to improve the response of its models by 14% and the conversion rate by 24%.
  2. Universe expansion through integration of new data sources – You can improve your response performance by selectively incorporating new files into your marketable universe. For example, one auto insurance company increased the size of its marketable universe by 30% by adding a new credit bureau file – which also improved the performance of the program by 25%.
  3. Segmentation – Sophisticated direct marketers use segmentation as a way to customize their creative and messaging strategies. Using a combination of value, life cycle, and demographics, they are able to identify the unique segments that exist in their customer base and develop differentiated treatment strategies. In one case, a direct marketer improved response rates by 42% by creating segmented, customized messaging directed to specific ethnic segments.
  4. Contact strategy management – Choosing optimal resting period and contact frequency results in higher performance. Several direct marketers were able to improve the effectiveness of their programs by implementing optimal contact management strategies and incorporating the impact of recontact into their audience selection strategy.
  5. Media mix optimization – Some direct marketers can boost their performance by synchronizing the timing of their TV and direct mail campaigns. One company was able to experience a 20% gain in response performance by doing just that.

Technology is putting many complex database marketing strategies within reach of an increasing number of marketing professionals. By learning and applying these advanced analytic techniques, you’ll be better equipped to launch direct marketing programs that will ultimately increase your return on investment.

Sound impossible? It is entirely possible to concurrently implement any or all of these approaches. For most organizations, however, a best-practices approach involves creating a individualized roadmap based on the specific situation. A customized approach provides a more effective implementation plan that creates “quick hits” while building the additional layers of a solution that over time will maximize the results of direct programs.

Ozgur Dogan is a senior director, database marketing solutions at Lanham, MD-based database marketing company Merkle.

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