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The marketing world now fully acknowledges the benefits of relevant and personalized communications. The better an organization is able to achieve this goal, the greater the return on its marketing investment as measured by response rates, sales, profitability, customer acquisition and retention, and overall customer satisfaction.

Yet, even with such great deliverables, many organizations fail to achieve their objectives—or worse yet—even come close to them. There are several reasons for this underachievement in a more complex marketing environment that includes:

Larger amounts of customer data
Information housed in unconnected silos across the organization
No strategic approach to uncovering analytical insights about customers’ needs/wants/preferences that can drive relevant communications
New marketing channels that require more customized communications
Lack of process and technology to automate marketing activities

The unfortunate result is that many companies are trying to function with critical customer information scattered across various groups, teams and systems. Integrating the company’s marketing efforts to create a consolidated, actionable view of the customer base with good tracking and ROI measurement thus becomes virtually impossible.

The solution lies in learning to combine the core elements of the database marketing continuum—data intelligence, business intelligence, customer intelligence and marketing intelligence—and then automating the entire database marketing process. This integrated approach, powered by experienced resources with the right technology and sound database marketing practices, can significantly improve results on several levels for companies that feel a growing need to improve speed, productivity, metrics, accountability and control, and compliance.

The purpose of this five-part series is to demystify database marketing. This overview will help marketers create a practical, achievable strategic plan to more effectively leverage the data found within their organizations now and utilize easily accessible tools and services. We’ll start the process in this article by defining the database marketing continuum and its four key components.

Data Intelligence
Data is the foundation for database marketing, and the more complete and accurate the data the better. We all know the expression, "Garbage In, Garbage Out," and it definitely still applies. A consolidated marketing database with all customer contact information, demographics, product purchases, service calls, Web traffic, campaign history, response rates, and any other customer point-of-contact details, is essential.

But in most organizations, this data is spread across multiple functional departments. Furthermore, data entry is often done manually and contact information might not be dependable. Data intelligence is about consolidating the customer information from the various department silos and performing essential data hygiene processes like identifying common customers and households, outlier detection, address accuracy and NCOA (National Change of Address).

Business Intelligence
With a data mart in place, you can generate reports that provide insights into performance management. Key Performance Indicator (KPI) reports provide key business and marketing metrics that can be trended over time. You can then profile different groups of customers and compare them so as to quantify and understand unique characteristics of each group. Individual campaigns and cells within campaigns can be analyzed to report response rates and ROI.

Customer Intelligence
With customers bombarded by thousands of messages in a single day, the only effective way to break through the clutter is by providing relevant messaging that the customer wants to receive. Customer intelligence is all about gaining individual customer insights that truly enable the delivery of "Right Message, Right Channel, Right Time." You can only accomplish this by taking a strategic approach to understanding your customers rather than a last minute, ad-hoc pre-campaign analysis. Building customer intelligence is a process that starts with understanding the value of each customer.

The next phase is to segment customers into relatively homogeneous groups that have relevance to your products and services. Typically, there will be multiple segmentations that provide insights into the multi-dimensional nature of most people. There might be life stage segments, relationship life cycle segments, product needs segments or potential value segments.

You then add predictive analytics to provide a more quantified likelihood to purchase and potential value for each customer for each product. Approaching customer intelligence with this strategic approach, in what we call the Customer Profitability Optimization Model, provides the framework for ensuring effective, efficient and consistent communications to each customer.

Marketing Intelligence
Campaign Management (CM) applications are now much more than simple interfaces for list processing and identifying target segments for your campaigns. CM now provides the capabilities to manage multi-channel, multi-wave campaigns and develop multi-step interactive dialogues with customers. CM also delivers campaign planning and performance measurement functionality.

Marketing Resource Management (MRM) applications automate the process of getting marketing work done. When implemented correctly, MRM can greatly reduce the manual process of planning through multiple spreadsheets. It substantially reduces the need for timeconsuming status updates and review meetings typically required through the campaign implementation process. You can focus your resources on strategic marketing rather than managing manual processes.

Three broad areas comprise MRM:

Production management, including a marketing calendar for managing activities and a workflow manager for managing individual tasks within each activity
Asset management for controlling the physical and digital assets
Financial management and planning for budget control and forecasting

Does your anxiety still linger?
Don’t worry. You’ll see as we delve deeper into each component of the database marketing continuum that the whole process is not only manageable, you are likely already employing the elements at some level now. In fact, that is part of the secret to achieving personalized, highly relevant customer communications. Start where you are at and continue to add levels of sophistication to each phase. Then you’ll get the synergistic value (aka the big payoff) by putting all the components together and introducing automation throughout.

Rick Brough is director, Product and Service Development for Thindata 1:1, which offers a full range of database marketing services—from strategic guidance to tactical execution. If you would like to learn more, you can e-mail him at rick.brough@transcontinental.ca.