Live from NCDM: Hughes on Data and the Web

Jul 29, 2003 9:30 PM  By

(Direct Newsline) Long Beach, CA–Forget neural networks. The best thing that has ever happened to direct marketers is the Web.

Insane? Not to Arthur Hughes, vice president for business development, CSC Advanced Database Solutions.

Take the case of Miles Kimball. It lifted its response this spring by sending e-mail newsletters to people who had received its Exposures print catalog.

The goal was to drive incremental sales while reducing costs, and to learn the process, said Hughes during a session at the National Center for Database Marketing conference here. The test was conducted using two panels of 20,000 customers apiece. All had purchased online prior to this year and were considered Web-savvy.

One group received three catalogs: Winter, Winter Renewal, and Spring. The second panel received the catalogs—and three e-mail newsletters.

The e-mail group contributed an 18% increase in sales over the catalog-only group, Hughes continued. E-mail increased the number of orders by 6%, and there was an 11.8% boost in the average order size. “And it didn’t make any difference if it was sent before, during or after they received the catalog,” Hughes said.

By driving customers to the Web, moreover, Miles Kimball was able to decrease its variable operation cost per order by 44%. The only downside was that e-mail increased the overall promotional cost by 11.2%.

Then there’s Isuzu, which recently created a microsite for use by its truck dealers. The dealers went on the site to order postcards for mailing to prospects.

Isuzu had developed 24 different cards, each one containing a case study of truck usage by a different segment. The firm drew the names of prospects from its database.

What’s a microsite? It’s a “throwaway” site that is used for one or two days as part of a single promotion, according to Hughes. “Let’s say you send a message, and you want people to get hold of you,” he said. “You set up the site for one or two days, for a particular message.”

Hughes added that “it costs millions to create a Web page, but only $5,000 for a microsite.”

But that’s not the only benefit. Microsites are an invaluable source of fresh data, and are used for driving e-mail efforts, Hughes argued.

Who does all the work? “The customers,” he said. “People are willing to do the typing themselves. And you get immediate response.”

This marriage of the Web and the database would have been unthinkable only a few years ago, Hughes said. As recently as 1996, data gathered by phone, fax or mail had to be entered by a person sitting at a keyboard. Databases were built on mainframes, and they could be accessed only by special software. Marketers got hard copy reports, and it took weeks to get them.

And now?

“All modern databases are accessed through the Web,” Hughes said. “There’s no need to lease lines, and you don’t need any software on your PC other than a browser.”

Marketers can access names via the Web and print them out on PC printer. They can produce reports on the Web. The best thing is that it no longer takes five weeks for a company to update its database, as it once did Western Union.

“Data are updated all day,” Hughes said. “It isn’t just fast, it’s instant.”

Despite all that, Hughes clings to one eternal truth.

“The most important part of RFM is still R for Recency,” Hughes said. “The best time to sell a man a second suit is while he’s still in the store.”