Optimizing Relationships With Data

Hopefully, after last weeks article you have a clear sense of the importance of your customer data — particularly as it relates to your email campaigns.

So now its time to put that good data to work and lay out a solid strategy for building an effective CRM model. How? Well, as most of you know, Im a direct marketer through and through, so I firmly believe in plenty of testing.

But in order to determine WHAT to test, you need to identify your goals at the outset. What exactly do you want to accomplish? In other words, would it enhance your customer relationship-building potential to be able to address questions such as those below?


Which of my sites products are top sellers? (And which have the lowest sales?)


Who are my best customers? Would it help to rank them A-Z? What criteria will determine that? (Number of purchases per customer? Average dollar spent per customer? Lifetime value of the customer? Types of products purchased by each customer?)


What kinds of purchasing behavior should I look at? Do I want or need to pull off those that receive email promotions but never click through and never buy? How about those that do click but never buy?


Would classifying select groups of people into various categories help in my efforts? What sorts of categories? Demographic and/or psychographic data? Buying patterns, as noted above? Credit ratings? Some other finite category?


Which segments of my data will need to be routinely and regularly updated? Do I need to capture outside information thats not related to my customers or products such as interest rates, stock market indices, etc.?
Of course, you can probably come up with a list of hundreds, even thousands, more questions like this. And depending on your unique list, you can then determine the specifics of your campaigns and which components will most effectively build those all-important relationships. After youve determined those, you can then implement tests and strategies such as those in the following real-world scenarios:

Credit Card Company A wants to create an email promotion for its latest card to its existing customer base. The goal is to promote with both value and personalization. The powers that be determined that interest rates could be customized based on each customers credit rating and history. The better the credit, the lower the rate. That way, the best credit risks could take advantage of a truly outstanding offer, while the company would still not be leaving its other, higher-risk customers out of the loop.

So Credit Card Company A created a set of business rules: All customers with R1 credit get a nine percent fixed rate offer, R2s get a 12 percent, etc. Unique messages were then created for each set of rules. Most solutions providers can then dynamically generate these customized messages in order for you to get the right message to the right customer at the right time.

Record Company B just figured out that the 80/20 rule does indeed apply to its database... meaning that a small percentage of its customers purchase regularly and make up the largest chunk of their profits. So the top brass decide to focus their marketing efforts to that very profitable segment by giving those customers what they want each and every time.

Based on past buying behavior, lifestyle, and industry trends (whos hot, whos not as far as performers go), Record Company B created multiple messages within very fine-tuned segments of its database. In other words, the message tests are much more specific than simply country music customers vs. hard rock customers. They are completely customized campaigns. In fact, each message is so unique that only a handful out of thousands receive the exact same one. Again — dynamically generated messages based on that valuable database info.

Take a look at the above scenarios from the customers eyes. Can you see how valuable this type of email communication could be? Can you see where it could take you?

But its not easy to do alone. I am constantly asked what small businesses can do to create a top-notch CRM strategy while not spending beyond budget. There are certainly software and/or small business solutions available such as Lsoft, e2, Roving, Online Ventures, Flashbase and Pivotal Relationship. Just keep in mind that some of these players have their limitations; however, they may be good places to start, particularly if youre working within tight budget constraints.

On the other hand, the bigger firms such as Accucast, Digital Impact, Exactis, FloNetwork, and MessageMedia offer a suite of CRM-focused solutions to help you test, maintain and build your customer database in a variety of ways.

Make no mistake about it: Knowing the value of your data and having the ability to enhance your customer communications will surely determine your future success in this venue.

And, given the fact that some of the most recent projections tell us that a good portion of current offline-only retention efforts will move to email over the next couple of years... well, this is something for all of us to be mindful of. Especially now — while the gettings still good.


About the Author

Kim MacPherson is President and founder of Inbox Interactive (formerly known as Selling By Design), a D.C. area-based online direct marketing agency specializing in email promotional copywriting, HTML design, and planning. She is also a consultant and frequent speaker on the topic of email marketing and is the author of the upcoming book "Email Marketing 101" to be published by Dearborn. You can email Kim:

kim@inboxinteractive.com.
http://www.inboxinteractive.com