The big data swap is on as marketers sling bullet passes to their top targets – and people who act just like them.
Welcome back, sports fans. Even non-football junkies have seen the TV spots of fans and NFL stars brandishing giant foam fingers. What everybody didn’t get were nifty e-mail postcards with a warmer, personal welcome. Minnesota fans got one showing Viking foam fingers; some cards in New York depicted Jets fans cavorting. Get the picture?
One-to-one is getting closer all the time, but the equation keeps adding digits as marketers look past their own purchase data to better target promotions. Some continue to add layers of syndicated data to slice and dice their own databases.
Others are asking consumers more about themselves more often, and using other marketers’ information. Airlines swap frequent fliers to safeguard their own loyalty programs. CDNow rides Isuzu’s Web site to hook new listeners. The NFL is drafting fans to build a database that could eventually host promos for sponsors like Visa and Coca-Cola. Visa builds its crucial fourth-quarter promo on data it doesn’t own.
Even consumers have gotten hip to the data rush. So hip, in fact, that the old privacy issue is taking a new turn. Pundits are now saying that consumers aren’t so much protecting their privacy as they are holding out to get something in return. Consumers know their personal information is currency, and they are willing to spend it – for the right rewards.
“People are looking for an exchange of value. That’s consistent with how business has been done for centuries,” says Bill Herp, ceo of online direct-marketing agency E-Dialog, Lexington, MA.
That affects promotion strategy two ways: Marketers are more aggressively promoting to gather data (think sweeps entries that ask a handful of personal questions) and subsequently using data to better target future promotions.
Fully 57 percent of all 1998 ad spending involved direct marketing, up from 55.4 percent in 1993, reports the Direct Marketing Association, New York City.
The National Football League kicked off this season with an e-mail campaign to flirt with the two to three million fans who visit nfl.com. The league relaunched its weekly 100,000-circulation NFL Insider newsletter via personalized e-mail. Each newsletter is tailored to a fan’s profile, with info and merchandise offers based on favorite team, gender, demographics, and other data fans give when subscribing. Fans this season get team-specific mailings; the NFL will analyze the optional info registrants give to see how deeply it can customize newsletters in future seasons.
“Imagine asking, `If you only want the newsletter the day after your team wins, check here,'” laughs Evan Kamer, director of business development for NFL Enterprises.
Once the database is in place, the NFL will share it with sponsors. Progressive online marketers like MBNA and Visa “are champing at the bit to get to our fans,” says Kamer.
But the NFL doesn’t want sponsors to turn off fans by blitzing them with marketing passes. The league will safeguard fan relationships by limiting the number, length, and timing of sponsor promotions, and may require all sponsors to include opt-out messages. Guidelines aren’t set yet, but Kamer says the NFL will be sure sponsors stick to “permission marketing.”
“We only used the newsletter in the past to drive traffic to our site, but we never even tracked the results,” Kamer says. “We want to become smarter marketers online. We have millions of names in our [off-line] database, a portion with e-mail addresses. Have we marketed correctly to fans off-line? Maybe, but now we want to be very smart direct marketers online.”
E-Dialog won the assignment in July to manage nfl.com and build online fan profiles. Ads and promos drive new subscribers to the site; once they register, E-Dialog tracks click-throughs and e-mail responses to nfl.com to further tailor offers. A fan who frequently clicks on Doug Flutie links, for instance, may get an e-mail offering Flutie jerseys online the day after the quarterback has a great game “to preempt other channels where the fan would buy that,” says Herp.
Oh, and subscribers can update their profiles anytime. “I’m sure we’ll see a flurry of activity on Monday mornings,” Herp laughs.
Brother, can you spare some data?
Visa’s at the other end of the database promotion spectrum: It doesn’t even own the data that fuels its estimated $XX million Magic Moments holiday campaign. For eightCK weeks, Visa randomly selects one moment each day during which all purchases made will be free. Winners get a credit for the amount on their next bill. Visa gave away $XX million to winners last year without ever actually knowing who they are.
Here’s how it works: Visa picks its “magic” moment, then gets a truncated card number for each transaction occurring at that moment. It knows the merchant and item purchased and the bank that issued the winning card. Visa’s agency, Frankel & Co., Chicago, contacts the bank to say a cardholder has won. The bank then contacts the winner, via Frankel, and fulfills the prize. Visa enhances its image, and banks get a nice halo effect in the process. The sweeps was so popular last year Visa decided to run it again.
The quid pro quo for financial institutions is to participate in Visa campaigns. Visa creates programs to boost card usage, then relies on member banks to execute them – all direct mail, for example, goes out to customers in a member bank’s name. Of course, banks benefit from Visa’s marketing expertise. And consumers “appreciate confirmation that banks don’t just give their information away,” says Donna Tracy, senior vp-director of direct marketing at Frankel.
Such protection of shared data isn’t unusual. Grocers under pressure to protect shoppers’ privacy assert that they don’t give or sell names and addresses to other companies. Two California grocer associations are supporting a bill making its way through the state Senate that will let consumers prohibit retailer loyalty-card programs from collecting purchase history and other personal information, or selling marketing information that identifies individuals (August PROMO). The Supermarket Club Card Disclosure Act requires retailers to put two opt-out clauses on card applications. Supermarkets don’t think the bill will diminish their databases because they expect few consumers to opt out.
The bill also restricts “sale or transfer of marketing data . . . that discloses the cardholder’s identity,” which could prohibit joint mailings with packaged goods manufacturers. Most grocers handle co-op mailings in-house or via third-party companies, so packaged goods partners never get a list of customers’ names and addresses. But packaged goods marketers handling their own direct mail wouldn’t be allowed to access grocers’ files.
At the same time, retailers are using more layers of data to target new as well as existing customers. FSI giant Valassis Communications, Livonia, MI, has a two-dimensional bar code system called Aztec that enables retailers to compile as many as 240 pieces of information on each consumer, including which competing stores the shopper has to drive past to get to the retailer’s own store.
One grocer NAME TK opening a new urban store wanted to learn where new customers came from and what kinds of promotions they liked. The chain mailed 12 offers over 24 weeks, each carrying an Aztec code encrypted with zip codes, addresses of nearby competing stores near, and a ranking of each consumer as a high-, mid-, or low-volume shopper (gleaned from the grocer’s loyalty-card database). Coupons were scanned each day to track which shoppers responded to what offers. Reports came back in two days, versus six months for coupon clearinghouse tallies. The grocer tailored offers more tightly and tracked how many new shoppers came in for the first time each week.
Hannaford Bros. has been using Aztec-coded mailers for about a year to woo new customers for new or underdeveloped stores. Offers are coded by store; Hannaford tracks redemption to tweak future offers or expand mailings to neighborhoods with similar demographics. Hannford has no loyalty card program, so it absorbs as much as it can from Aztec data. “I’d like a tighter link between addresses and phone numbers” to call shoppers to ask why they did or didn’t redeem an offer, says John Vitagliano, Hannaford’s Southeast marketing director.
List rental is getting new life online, too, as marketers rush to brand new sites and establish shopper loyalty. Music giant CDNow piggybacked Isuzu Motors’ site to reach new users. Isuzu mailed postcards to its target audience touting an online sweeps. Entrants gave their name, address, and a code from the postcard, then answered five questions. Those responses were sent automatically to E-Dialog, which e-mailed each entrant a $10 gift certificate from CDNow. Isuzu’s demos matched CDNow’s – Web-savvy consumers interested in CDs and DVDs – and let CDNow cast its acquisition net widely but not indisriminately.
Eddie Bauer ran a July-through-September sweeps giving away five bikes a day to drive traffic to its site. Entry forms in direct-mail catalogs, college welcome kits, retail stores, and concert handouts sent shoppers to eddiebauer.com to register by giving name, address (including e-mail), and age. An already-checked opt-in box automatically puts entrants on the mailing list for EB Mail. Consumers could enter as often as once a day throughout the 44-day joint campaign with Giant Bicycles, which produces Eddie Bauer Edition bikes.
From football to bikes, all sports fans are covered. Welcome back to the future.
Two catch-phrases dominate database marketing this year. The first is “permission marketing,” coined by Yoyodyne founder Seth Godin. In essence, it means marketers ask consumers permission to market to them.
In practice, it’s a wolf in sheep’s clothing, contends Bill Herp, president-ceo of E-Dialog, Lexington, MA. “It’s really just interruption marketing applied in a conscientious way,” since the first step is to interrupt consumers to ask permission. There’s nothing wrong with interrupting, as long as your follow-through feels to consumers like conversation.
“The siren song of the Web is to completely automate consumer interaction, but it’s important to keep the flavor of conversation,” Herp says. The key is great customer service, what Herp calls “robust dialog management capability” to handle those permissive consumers.
The second buzz-phrase is “customer relationship management,” tailoring direct-marketing pieces to match a customer’s stage with the brand. Brett Gow takes exception with that: “Some people don’t want a relationship with a brand. They just want to buy a product,” says the vp of database marketing services at Wunderman Cato Johnson, Chicago. He proposes a new catch-phrase: “enterprise-wide customer experience management.” Which means, basically, that every interaction a customer has with a company should be pleasant. It also means every sector of a company should know what that customer has told another department – a change of address, for example, or enrollment in a loyalty program.
“Every time you touch a customer, you need to consider how that benefits the brand,” Gow concludes. “If customers are continually impressed with how you treat them, they’ll appreciate that.”
Seems customer service needs to answer more than just the phone.
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