The List-less Customer Database

Targeting a customers’ needs can improve a company’s opportunities MOST OF US have been involved in the planning, development and/or use of at least one customer database at some time or other. This may have been called a marketing database, a customer data mart or even a customer data warehouse. Today it may be known as a campaign management environment or customer relationship management application. Sometimes, the difficulties of developing and maintaining these systems may have led some of us to use other – let’s say more colorful – names.

In any case, the focus of these systems has been primarily on list selection in support of targeted marketing programs. The differentiating features and functions of these systems have revolved around universe identification, list generation, source code assignment, and program tracking and measurement – activities of direct or database marketing groups in many organizations.

While these list-related features and functions are important, they shouldn’t be the sole focus of most of these systems.

I encourage you to think beyond marketing program tactics and consider the many other opportunities that a consolidated customer base offers.

Programs vs. People The emphasis of many marketing databases has been on programs more than the people to which they are targeted: our customers. It’s a given that you have a promotion. The question is who to send it to, short of everyone.

While this approach can be both efficient and effective, a more productive, relevant course would be to drive interactions from a solid understanding of customer needs and opportunities. It may be difficult to quantify, but there is enormous potential in gaining customer understanding – profiling your customers to understand who they are, segmenting them to understand their differences, and valuing them to understand their potential.

What all of this understanding might lead to is uncertain. However, experience suggests that it could affect all aspects of your business, and therefore should be considered significant.

Product/Service Development A marketing database can also provide you with a depth of understanding about your products and services – if you know where to look.

For example: – Take a look at the products that attract new, valuable customers. Which products serve as effective lead offerings?

– Which products and services appeal to your best customers? Your most frequent customers? Your highest spenders?

– How are products purchased? Together? In sequence?

– What are the common characteristics (colors, sizes, applications, brands, price ranges) of your best products?

– Which products tend to cause problems? Which ones disappointed customers enough to drive them away or become inactive?

– Is a certain product/service combination a bigger hit than separate components?

Market Development Besides providing customer and product insights, a marketing database can guide market development on several fronts:

– Site location and specific geographic opportunities. What are the geographic characteristics of your best customers? Similarly, which markets have proven difficult to penetrate?

– Performance analysis vs. regional and national competitors. Are you retaining key customer segments in highly competitive markets, and markets with one primary competitor?

– Media placement. How is your company performing in light of its general advertising (television, print, online) expenditures? Can you see differences in performance across areas of comparable and differing media spending?

By analyzing the characteristics of your firm’s customer base, you can make far more informed, data-driven decisions about print advertising, television, interactive and other media buys.

Any of these areas of major investment could, on their own, justify the cost of developing and maintaining a customer database.

Other Applications There’s a wide range of other applications for your consolidated customer data. These may be specific to your industry:

– For utilities, the focus may be on the characteristics of the premise as well as the occupants. While the occupants might change, the physical structure (house, office complex) retains characteristics that define needs for utilities and other services.

– Many Web applications involve site customization and personalization as well as targeted banner advertising. Smart online businesses are also using customer data to drive site design.

– Manufacturers may never “pull a list,” but rather are investing in customer data to optimize channel strategies as well as drive product development.

Beyond Lists I hope these ideas help you to explore further applications for your organization’s customer or marketing database. While your customer database may not be “list-less,” I would urge you to look well beyond lists – at these and many other opportunities.