Data Quality & Customer Management

Article excerpt

Database marketing, relationship marketing, customer services and micro marketing are all current buzzwords in the customer management process.

These techniques have grown up over recent years as the inappropriateness and ineffectiveness of mass marketing for anything other than FMCG brands has been realised. In addition, information technology has become cheap, powerful, available on most desktops and therefore an everyday part of the customer management toolkit. Striving for volume--the obsession with putting huge numbers of mailing. pieces into the post--has categorically fallen out of fashion. The focus has now changed to value for effort/spend--mailing campaigns which not only generate a high proportion of respondents, but also respondents who are likely to purchase the product or service on offer.

This state of affairs is applicable to many areas of business, especially where competition is strong, where there is little to differentiate one supplier's products from another's and where the definition of market is geographically quite restricted (as with branch outlets, for instance).When marketing within a relatively small geographical area, the product or service provider needs to have, and use, an intimate knowledge of the nature of the local market to be effective... in fact customers will usually expect nothing less.

All the more reason, then, to make sure that lack of attention to certain marketing essentials does not undermine and invalidate the salesperson's local expertise. The salesperson's efforts can be seriously shaken if mailings are going to inappropriate targets (eg equity release schemes for first time house buyers, or mobile business equipment to deskbound executives); and if address information is incorrect, duplicate entries will increase costs, and mailings will go astray. In fact, inaccurate or inappropriate direct marketing actually antagonises customers and can seriously damage the supplier's brand.

The way to avoid these dangers, is to concentrate ongoing effort on data quality. In explaining this, perhaps the best place to start is the traditional health warning in computer circles--GIGO 'Garbage In, Garbage Out'. In the case of customer management, GINO (Garbage In, Nothing Out) is perhaps even more appropriate. Garbage mailed to customers results in no response...if indeed the customer or prospect ever receives the mailing at all.

Fundamental to the avoidance of GINO is the quality of the data which resides on your customer/prospect database. This database is, ultimately, the source of all mailings and customer/prospect contacts. It determines not only the selection of names for a particular campaign, but also, by the quality of its address information, the accuracy of your targeting. Finally, the quality of your database's address information will also govern the effectiveness of postal delivery for your campaigns, as well as your eligibility for the considerable discounts available from the Royal Mail.

In the current economic climate, no new customer recruitment activity is easy. Nevertheless, whilst difficult to obtain, there is new business to be won, both from new prospects and existing customers. The question is one of how to identify and manage that new business.

One avenue would be to profile your existing customer base, analysing your best customers, discovering their characteristics, and then renting lists of prospects whose characteristics are a near match with your 'existing best customer' profile. This is not, however, quite as easy as it seems. With budget cuts, general retrenchment, and the rise in company insolvencies experienced in 1992, the market for such lists has been hit hard. Lower demand meant less income for the list suppliers; and consequently less resource was put into researching and developing new lists for the rental market. The upshot for the marketer is, if you can get hold of lists which closely match your desired customer profile for a particular product--fine--but you may find the quest for such lists more difficult than you imagined. …