From the classical Greco-Roman world through the later parts of the medieval periods, there have always been humans who practiced alchemy, the quest to turn ordinary base metals into gold. As it became clear that such a process was for all intents and purposes impossible, the practice faded from the scene. However, the perception that something of limited value can be repurposed in such a way that it can exponentially increase its value remains alive and well. In this instance, call it alchemy in the form of the customer database.
Most firms are sitting on an asset, their customer database, which was designed for a few specific purposes. But these "limited-purpose" databases can be transformed into an active goldmine that better serves the firm's target audience and helps to increase profit.
Combining Silos
Some databases were created simply for storing customers' transactional histories. Other customer databases were combined with (or kept separate from) marketing and attitudinal information that describes customer and prospects' beliefs, attitudes, lifestyles and behaviors. Still other databases were built in silos that captured online footprints such as site behavior, click streams and more.
Each of these customer databases has a function and individually, offering value in particular areas. Combining the information via a rational, logical data model increases the value tremendously.
When a company can link customers' purchases to the offers that spurred them, that data provides valuable clues as to which products and services should be offered next to those particular customers and lookalike prospects. When a company knows more about their target audiences' particular attitudes, propensities and household composition, that insight provides helpful clues about which blend of media channels and messages and timing should be blended for the next offer. When a company knows more about both their customers' online and onsite shopping behaviors, content can be further personalized to increase the likelihood of purchase while improving the customer experience.
A Better Ecosystem
By logically linking and coordinating all of this information together, the customer databases transition into a far more valuable marketing ecosystem where single-point insight blends with multi-dimensional insight and marketing execution in order to engage customers in a much more coordinated and personal fashion. This is alchemy in the modern age where limited purpose customer databases have integrated with several other assets to form a whole that is greater than the sum of its parts.
But increasing the customer database's value proposition doesn't stop there. The next wave of alchemy will combine third party data with all of the companies' data sources and multi-dimensional insights, attitudes and behaviors and existing channels to include social media and increasingly addressable media such as TV. These emerging trends will help to cast a wider net to better reach and engage customers who themselves may have initiated dialogue with the company.
The database becomes more valuable when it is used to find new customers and reach existing ones across multiple media channels, blending traditional and emerging channels as well as new consumer devices. The same approaches that made databases so powerful in traditional direct marketing are being applied in broadcast television, across social media, and in mobile in ways that we couldn't have dreamed of even just a few years ago. Channels that are embryonic (tweet, tweet) in their development are being mixed and coordinated with older media (hello, television and radio) that are being rejuvenated through database-driven intelligence.
Today's marketers, just like alchemists through the centuries, struggle with the challenge to create gold out of something basic. Marketers have gotten better and better over the decades at extracting meaningful information from data and acting on it to optimize outcomes with their audience and increasing their firms' profit, "gold" so to speak.
While we may not create gold in its purest form, our efforts at marketing alchemy are improving. By innovating around one of our most powerful tools, the customer database, in new and interesting ways, we're getting closer and closer to getting more and more of that precious gold.
David Danziger is director of data and targeting products at Acxiom Corporation. He believes he's developed a process for turning plastic shopping bags into gold.
Network
