Data is transforming marketing

News

An interesting whitepaper titled ‘Marketing Communications Towards 2020: Looking for meaning in a land of plenty' predicts that there will be a shift towards direct marketing in the coming years as new sources of data and insight make marketers more accountable than ever. Marketing will become more efficient through the use of "new and plentiful data and insight" and companies "will now need to embrace the targeting, measurement and rapid response skills pioneered in direct marketing".

Marketing must evolve as customers have more control over the media they choose to consume. Mark Thomson, media director at Royal Mail, commented that "the customer, their likes, needs and preferences have to become the centre of the marketers' world". Therefore, data management, control and insight will be more important than ever.

MIG have helped many companies to manage their databases and provide insight to increase customers' lifetime value and reactivate past customers. Databases have been used to inform customer engagement and communications strategies to maintain marketing relevance and efficiency.

Case Study
Challenge
When the recession hit, many home improvement businesses offering high ticket items were adversely affected. A well known home improvement retailer had relied on mass media price driven/offer led marketing to build sales. Little or no effort had been put into building a customer database largely with the perception that the frequency of purchase was too low.

With falling returns from existing marketing activity, to survive the business had to find more cost-effective means to recruit new business.

Assessment
Our view was that as virtually every sale had resulted in the delivery of the product, and subsequently the capture of customer detail and transactions through the invoice system, that a customer database could be built and that perceptions of the business could be factually tested, store catchment areas identified and purchase frequency, seasonality etc defined.

Solution
Data was gathered from a variety of sources to augment the invoice system and amalgamated to create a single customer view including over 4m records going back 6 years. Analysis showed that whilst most customers had only purchased once, the data showed the most likely initial purchase and, where multiple purchases had taken place, it was possible to identify what the next most likely purchase would be and over what period.

We were also able to build catchment maps and carry out geo-demographic profiling to identify future potential and contribute to decisions about branding and re-structuring. Marketing activity was tested on SMS and via direct mail to re-activate past customers and more formalised data capture techniques were advised and adopted.

Success
The parent company was able to re-structure the company and maintain a core of stores that could survive the downturn in the economy and a new business born from the restructure that can utilise the customer data in future. The marketing activity for the stores worked and target groups were identified from past transactions as ‘types' identified by other ‘external' factors. Re-activation activity was profitably undertaken both via direct mail and in particular SMS which delivered 30 times its cost in terms of sales.

The Marketing Innovation Group Ltd.
PO Box 427, Knutsford,WA16 1EH
Registered in England & Wales. Company No. 06963849.