Yeah, we know—you have to cut expenses. But your database is the last thing you should touch. Direct mail costs are skyrocketing, and this is no time to waste money on mailing to the wrong people. How do you identify your best customers and find similar prospects? By investing in data overlays and analysis. We cover these disciplines-and more-in this issue of Information Intelligence from Opinion Research Corporation.
“Today, it’s more important than ever to maximize your marketing budget and resources and to direct your marketing messages to the customers who are most likely to purchase your product or service,” says Sal Pecoraro, vice president of database marketing solutions for infoUSA.
It’s especially important for direct marketers, Pecoraro says, pointing out that direct mail costs are becoming more and more expensive. Companies need to be very focused and targeted in finding their best customers and one of the best ways to do that is to learn more about their existing customers and then “clone” them.
Pecoraro, who works with some of the largest companies in the world including Fortune 100 clients, says now is not the time for “trial and error.” “If you don’t have the money and you don’t have the time, you really need to understand who your customers are, identify other people who look like your best customers and then go after them,” he says.
Many companies don’t know much about their customers beyond their names, addresses and the purchases they’ve made. But it’s possible to find out a lot more about both business and consumer customers by utilizing an outside data source such as infoUSA to append additional information to the basic data files. InfoUSA, for example, provides a number of consumer and business databases that have more than 450 pieces of data per person or company. With such rich data, companies can learn many different things about their customers – things they never would have known otherwise.
For example, using a transactional database, a company might know that 80 percent of its customers live in New Jersey. Beyond that, they know little about their customers – they don’t know any other demographic information such as their ages, incomes or education level, and they certainly don’t know any psychographic or behavioral-based information, which would indicate if someone would rather go fishing or to the opera.
By appending its customer database, the company could find out that 70 percent of its customers are upper income and college educated, that they own their own home and many have children. Those pieces of information help the company design more targeted messaging and offers for its existing customers and give them an idea of the person they should target as a potential customer.
Beyond basic demographic profiling, many companies also run predicative analysis on their database. In other words, they use behavioral data to predict who will buy versus who will not. Over time, this type of modeling can predict customer losses, as well as future spending.
“You want to focus your limited resources on people who will give you the biggest bang for your buck and profiling and cloning can help you do that,” Pecoraro says.