SMA Spring 2005 Newsletter

How to create a true marketing database" in 5 ½ easy steps

It's a challenge at most San Diego companies: we know we should have a marketing database. Many of us think we do - until we try to use it. Why is a true marketing database so scarce in San Diego? Why don't we all just commit to getting it right in the next few months?

Boosting profits and marketing effectiveness

It sounds good, the promise of a marketing database. It's supposed to allow us to market effectively to our customers. Customers are more likely to respond to a given promotion than prospects. So for the same marketing expense, customers generate higher profits. Why doesn't everyone have a marketing database? Why isn't everyone effectively marketing to our customers?

The first hurdle that most San Diego companies stumble over is housing the marketing database, an issue of data format and software. Customer records are maintained within a software program that isn't - or hasn't been -- structured to provide the type of marketing functionality the company needs.

The most common inappropriate software used for "marketing databases" includes contact managers (e.g., Act, Gold Mine) and other "flat" files (label programs, address books, MS Outlook). The basic problem with these types of programs is they're not "relational" - a key characteristic of true marketing databases. Relational files "relate" each data element to every other data element. This allows you to be able to select, count, and analyze records based on specific characteristics (i.e. products purchased, zip code range, etc.)

Step 1: Get Your Data into Relational Software

Relational database software can be as simple to use as MS Access or SQL, or as complicated (and expensive) as Oracle. The key: plan to move your customer data there now. No amount of consulting, CRM packages, data mining software, or new hardware will fix the fact that you can't access your customer data - until you move the data to a relational software package (sometimes referred to as a 'database engine'). Do it now.

Step 2: Get Your Data Formatted Correctly

Once you've decided to take the correct first step and load relational software, take some time to get your data formatted correctly. This means simply, think about what kind of information you're going to want to see from your marketing database. Mock up sample reports and analyses, to help you think through what you'd like to see. Then give these sample reports to your programmers, so they can format your data correctly to give you back the information you're going to need.

Step 2 ½: Involve an Experienced Database Marketer in Step 2

Step 2 may not get you very far, if you don't get an experienced database marketer involved. If your staff has never had a true marketing database to work with, they may not know what kind of information a marketing database can and should provide.

You need to involve someone who knows what a marketing database should do, what information it should capture, and what analyses your marketing staff should be reviewing from the database. Companies get derailed in database initiatives when they assign "someone from Marketing" to work on the database team, but that person doesn't bring enough database marketing experience to the team.

If your internal programmers will tackle the building of the marketing database, and you don't have an experienced database marketer on staff, this is the logical place to bring in a consultant. If you hire outside programmers, and you don't have an experienced database marketer on staff, be sure the company you hire does have that talent on their team - or you'll need a database marketing consultant as well.

Step 3: Organize Your Records by Customer

You want a complete picture of each customer's history with your company, i.e., a record of all purchases by that customer all in one place. That may mean that all the individual purchase records now stored in sales or accounting need to be merged together, and purchases made by each customer related to one customer record.

This "merging" and "purging" (of duplicate records) process can be easily done by many mailing houses in San Diego. Mailing houses regularly use this process when a customer mails to more than one mailing list at the same time. It's a critical step -- and it's well worth getting it done correctly -- to send your customer file out to experts for this process.

Every company should know who your best customers are. Getting your purchase records organized by customer is the first step.

Step 4: Gather Data That Will Make Marketing More Effective

Think about information you'd like to know about your customers, to assist with future marketing efforts (media habits - like magazines read, level of usage of your product, particular characteristics of your customers, etc.). Then develop a plan to gather that information. Surveys can be easily done by sending your customers an email message with a link. When the link is clicked, a web page with the survey opens. Give customers an incentive to complete your survey, by offering them a free gift, or an entry into a drawing.

Step 5: Start Every Future Marketing Campaign with Your Database

What you know about your best customers should drive the media you use in the future, your product enhancements, new products you introduce, changes in service levels - everything.

If you're trying to decide which marketing seminars to send your employees in the coming months, send at least one person to a good Database Marketing seminar, to ensure you maximize the value you've just built by following these 5 ½ steps.

Isn't it time you finally got a true marketing database up and running? Do it now. Your company (and your career) will profit from it.

If you're looking for some database help, we have both expert database marketing consultants as well as database programmers on staff.