Businesses leave valuable data untouched
Almost every business already has valuable information about its customers at its disposal. With recent technological advances in printing making personalised direct mail campaigns affordable, there has never been a better time to apply the data mining techniques used by direct marketers to predict customer behavior.
Business to business or b-to-b marketing is one of the more challenging areas. B-to-b marketers have been slower to adopt database marketing best practices. They tend not to have the in-house expertise to leverage the historical information from their customers, which might help segment their customer base and make the most use of customer data.
Working with a combination of in-house transactional data as well as overlay business “firmographic” information, companies can target their current customers and also understand where to find new clients that resemble their best customers. Studies show that an existing customer is 7 times more likely to buy from you as a stranger.
Many companies don’t track the amount of money their customers spend, making a ‘lifetime value’ figure for the average customer impossible to price. This makes it very difficult to accurately gauge how much to spend on marketing. That process can be as simple as tracking total sales or as complex as completely analysing their transactional history and corresponding profitability. Most business owners tend to think of a customer based on the current transaction; they tend to be more transaction- than customer-focused, not looking at the bigger lifetime picture.
Derrick Cameron from Eximium comments, “What was once very difficult to track and monitor can now be simplified through the intelligent use of IT. Once the systems are in place, monitoring this type of essential information becomes quite straightforward.”
Here are Derrick’s three key tips for getting more out of your existing customer data:
1) Be clear what you want. Data mining techniques are useless if you don’t know what you want to achieve. You don’t want to data mine for its own sake. You want to make sure that the information you retrieve can be applied to winning or converting more clients or up selling to existing clients. Focus your data mining on areas where you are producing results that can be implemented into tactical initiatives. Use the information to achieve your marketing objectives. It’s all about planning and preparation.
2) How current and reliable is your customer data? Perhaps it’s time to conduct a data audit. Find out how accurate it is and assess the information based on its origins. Did the information come from the customer directly, during the point of sale, or from a third-party source? Look to your marketing objectives to determine what information is required. Track all transactional history back to the customer mapping. A common issue is the use of different versions of a company name in your database. One day the order might be placed using ‘Ideal Marketing’ as the customer name. The next time, you might use ‘The Ideal Marketing Company’ or even an acronym such as ‘IMC’. You need to make sure those purchases are being linked to that same customer to ensure the accuracy of your analysis.
3) Keep it clean. It’s worth doing a final manual check to spot potential errors, undefined fields or duplication. The follow through from the data audit is to make sure you capture all the information you can on a customer, and to make sure you can match those transactions.
This entry was posted on Tuesday, March 11th, 2008 at 1:43 pm and is filed under Business Intelligence, IT Consultancy, News . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
