You have a gold in your backyard worth millions or even hundreds of millions of dollars. The gold is the customer data held by your enterprise and it is quite possibly the most important asset your company owns.
So why aren’t you mining the gold in your backyard?
It’s a challenge for most companies, and especially for marketing departments, to mine their data to drive customer marketing. Extracting value from the customer file can be very difficult. The information, often buried in legacy computer systems and originally collected to support operational or financial functions, if it’s available at all, is often missing key elements and is in a form that’s not useful to marketers.
To complicate things further, marketers cannot realize the potential of customer data for relationship marketing without the help of others in the company, which brings corporate politics into the mix. IT owns and maintains the data, finance creates hurdles for investments, and legal wrestles with privacy and compliance issues related to customer information.
It doesn’t matter if you are big company or a small company. If you have customers and want to maximize your return on customer marketing, you need to convert the gold in your backyard into effective marketing communication.
Hip Shots
1. Understand your data. Understand how it’s created, maintained and used by your business.
Get an experienced database-marketing practitioner involved in the beginning, listen to them, and take their advice. You will save yourself a lot of grief.
Have an audit of your customer file performed. An experienced database marketing consultants can determine what data you have, how clean it is, where it is and, what’s even more important, what you don’t have. They will review how it’s gathered and used today to support your business and determine how it is and could be used to market your products.
2. Create a Customer Data Plan. Work with your marketing staff and get consulting help if required to identify, justify and prioritize data initiatives.
Map all your customer interactions and determine what data can and should be collected at each point. Only gather the data that’s useful. There is always a cost associated with data collection. It might be an OOP cost, or an opportunity cost, or the price paid for customers who are annoyed by the intrusion, but there is a cost. If you can’t answer the question, “What will I use this information for?” then don’t collect it.
3. Get Started. Obtain tools to access and use the data.
Use existing databases if available and appropriate. If improved access is required then build a data mart. This is a repository for the data needed to support business activity outside of operations. Customer records can be augmented with external data to increase their utility.
4. Develop an analytics capability. This includes both business intelligence capabilities to measure marketing results and customer analytical tools to segment and target campaigns.
Use customer analytics as your insight engine. This is about more than technology, it’s about people. You want analysts with experience in marketing. It is rare that a financial analyst will have the right-brain capacity to extract maximum value from the data. Many of the insights will be soft, inferred and supported by the data, but not an actual result of the data. Marketing analysts know how to do this.
5. Deploy appropriate campaign management tools. Get help from IT and, if necessary, consultants to identify and install campaign management tools that fit your current and future business needs.
Good campaign management is essential for the effective application of the strategies developed from the data. Campaign management allows you to assess the impact and measure the ROI on marketing activity. What worked, and what didn’t.
4. Don’t Pay Too Much. Companies almost always spend too much to solve this problem because they fail to take the customer’s view.
Companies are product and operations focused and not customer focused, which leads to decisions and purchases that don’t add value to the customer experience.
And many times companies don’t assign or hire the correct expertise to run the project and/or they don’t go through the proper steps. IT turns to their usual resources and, because these resources don’t understand marketing’s requirements and marketing doesn’t understand how to describe their requirements in terms they can understand, IT gets sold way too much horsepower for way too much money.
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