Case Study: Marketsmith Helps Tumi Determine Core Customer

To determine your core customers, make a point of consolidating your consumer information from multiple sources into one database, advised Marketsmith president/CEO Monica Smith during a session at last week’s Direct Media Client Conference & Co-op.

During the session called “Managing for Success in a Multichannel World,” Smith explained how her Montclair, NJ-based strategic marketing firm was able to work with high-end luggage manufacturer/marketer Tumi to identify its key customer segment based on data from five silos.

“Data collected from customers is critical to how we as marketers can engage them,” Smith said. “The more data we have about customers, the better we can market to them.”

Tumi vice president of global marketing Wendee Lunt, who also spoke at the session, said that Tumi’s goal was to better understand its customers and how to market to them.

As of spring 2005, Tumi had separate customer data silos for separate channels, including direct mail, stores, telephone, and the Internet. Marketsmith took those silos and combined them to form one customer database. Then, using several analytical tools, it was able to determine its core client, which it dubbed Barry and Kathleen: childless, affluent professional couples who are career focused, fitness conscious, and likely to dabble in investments.

With the core customer identified, Tumi’s marketing team added merchandise and accessories from European motorcycle maker Ducati to better appeal to them. Though Smith and Lunt didn’t share numbers, both said the product additions have improved Tumi’s bottom line.

Smith said both Marketsmith and Tumi learned the following lessons during the process:

  • Matching logic needs to be embedded into the marketing thought process. The technology used in the merge/purge process is great, but Smith said that if your team has no desire to understand matching logic – determining if addresses entered in cross-channel databases are the same, for instance, if though they are not exact matches – then your project will suffer. You need to make sure your vendors and your IT department are at synch with this.
  • When logic does provide matches, data from one silo can be used to patch missing data from another silo.
  • All data are not created equally. Data sources should not be treated the same. For example, a consumer buying online will be more willing to give out an e-mail address than a store customer. Marketers need to go for the quality of data – not the quantity – when consolidating their lists.
  • Apartment numbers are not always captured by online databases. The most-effective way to patch in apartment numbers is through telephone directory lists.
  • The more info a customer provides, the more money he is likely to spend. Tumi customers who provided both an e-mail address and a phone number spent on average 9.7% more than those who provided only one or neither.