This is the third article in an ongoing series on database marketing strategy from Lanham, MD-based database marketing solutions provider Merkle.
As discussed in the last article (Taking Inventory of Database Marketing Capabilities, May 16), the first step in shifting to a more strategic approach to database marketing is to take a careful inventory of your current capabilities compared with current established best practices.
The next step is to use this inventory as a baseline to determine your options and priorities prior to making changes to your database marketing capabilities. Comparing your inventory against industry best practices will help you to identify priorities for change.
Identifying your options involves studying the core database marketing management processes: include strategy, analytics, content, data, campaign, and performance. Within each of these categories, you need to understand the extent to which gaps exist between your practices and best practices. Once you can identify these gaps across all of your database marketing processes, you can estimate the effect each gap has based on the potential effect on financial results.
For example, within content management, you may identify a gap in the effective joint use of compiled data and vertical lists. Based on your industry and your current data purchase processes, you could discover an option for increasing the use of modeled names from compiled data that could be a $10 million opportunity. You must then weigh the size of your opportunity against the cost of the infrastructure and process changes required to implement it. Next, you must compare these answers to the benefits and costs of other options, using a grid as shown.
Based on the wide variety of potential changes identified, it is critical that you estimate the potential cost and impact of each. For instance, one company identified two options: It could improve its existing campaign selection process, and it could create a contact strategy for ongoing campaign management. In this case, analysis indicated that its current campaign selection process was far from optimized and that focusing on improving it would produce a greater return on investment in the following six months. So the company concentrated on this option and improved response rates by more than 50% during the following nine months.
In summary, you should make a focused effort to identify the options and priorities for improving your database marketing efforts and then map them based on impact and ease of implementation. This will serve as a guide for choosing your top two or three priorities. By focusing on the actions that will clearly have the largest impact, your database marketing efforts will become more effective and predictable, moving you one step closer to taking a world-class approach to your direct marketing programs.