Faced with shrinking budgets and a challenge to increase results, marketers are looking for data that helps their campaigns deliver reliable response and increase customer loyalty. Postal increases, fragmented marketing channels, and our uncertain economy are making customer acquisition and retention increasingly difficult. Marketing dollars devoted to prospecting, retention, and loyalty must be spent wisely and produce immediate return in the form of new and repeat customers.
Harnessing the power of consumer data — turning information into customers — requires making sound judgments about your data choices. When you understand what a data source is likely to deliver and how to best combine data options, you can test and invest in data that is most appropriate and effective for your applications.
While most marketers understand that building relationships with customers leads to retention and loyalty, few do so in ways that also maximize their return on marketing investments. Building your customer database with accurate information is a critical component of creating a solid customer relationship. Gathering information about customers helps a company understand what drives them to make a purchase and allows the marketer to tailor messages.
Consider that price may be the driving factor in a purchase for one customer while new merchandise may be a factor for another. Marketers who tailor their messages to the respective customers — sending a coupon to the price-driven buyer and an advertisement featuring the latest merchandise to the other will recognize a greater response and greater customer satisfaction.
While messaging plays a key role, the success of the message relies on the accuracy of the information collected. The strongest message or most appealing creative loses impact when it does not apply to the customer or never reaches the intended audience.
Data management is complicated. Choosing a data provider who can manage complexities and deliver the best data for your needs is critical. Before selecting a data provider, consider the following:
- A single data source may not offer the depth and breadth your organization needs. Identify specific characteristics of the market you’re trying to reach. Cross-reference your requirements against the number of data elements the provider has on each prospect to determine if these will match your selection criteria.
- Freshness of the data used in your campaign is an important consideration. Many companies have data in their house files that is no longer current. Using external data providers to update house file information can lead to a strong campaign — but only if the data the provider is using is fresh. Consider how often the data provider updates its own compiled databases.
- Good data providers have processes that allow them to maintain quality data over time. It is important to ask how they compile data, where it is sourced from, if it’s current and what practices are in place to measure and maintain quality data. A seasoned direct data compiler learns how the data performs and can identify potential problems.
- An experienced data provider can create intelligence from data by developing target and response models using existing information. This process helps to better identify prospects by taking information you have about your best customers and applying it to all other available data. The result is precision targeting techniques that yield prospects that closely match your customers.
Choosing the right data partner will help a company construct a solid foundation for building customer relationships. From there, a business can better target customers with messages tailored to fit their preferences, maximize ROI, and increase retention.
Denise Hopkins is the vice president of marketing and product development for Experian Marketing Services and can be reached at firstname.lastname@example.org.