A little like unlucky lovers, some companies are good at getting customers but less skilled at keeping hold of them. While it used to be common practice in businesses to prioritise finding new customers over holding onto existing ones, the recession has changed this mode of operation. Companies now recognise that keeping customers is a more cost-effective strategy than spending their budget trying to coax new consumers to buy.
Marketers are trying to find innovative ways of doing this, employing a selection of agencies to aid them in driving new data-driven campaigns. Collecting data has never been easier as an ever-growing number of consumers go online to find out instantaneous information and agree to hand over personal details in order to register for website access or newsletters.
While this might appear great news for brands, ensuring the integrity of the data and its correct use remains a challenge. Adrian Gregory, chair of the Institute of Direct Marketing Data and Database Marketing Council alongside his role as chief executive of data governance specialist DQM Group, stresses the importance of investment in this area for marketers.
He argues: “Investing in data quality at all times is vital and especially important in recessionary times when the focus needs to be on retaining key customers. Customer data is often a company’s most valuable asset.
“Investing in improving data quality is important and must not be seen as a cost. Developing the business case for ongoing investment should be compelling for most businesses.”
In recognition of this issue, marketers are now able to get help in this area from a new data benchmarking and information service developed by DQM Group in partnership with the IDM Data Council. A DataMeasures website has been set up to allow companies to check how their practices compare to similar businesses, find a range of information on data quality, data security and regulatory compliance and “ask the experts” for advice on how to improve their data quality.
Used correctly and analysed carefully, customer data can support companies in retaining their customers through helping brands personalise their services. But with so much data being collected, companies must be careful to ensure that they do not misuse the data or scare customers unnecessarily by being inappropriately personal.
Jeremy Bedford, director of UK operations at marketing automation software company Neolane, warns: “In a downturn, there’s always pressure to bombard existing customers to squeeze more spend from them, but over-solicitation can be a real turn-off for the customer. The trick is to personalise the content of your campaigns by selecting and presenting only those offers that are relevant to your customers.
“This requires having good quality data available about their previous interactions with you,” he adds. Brands need to check which email marketing messages each customer tends to open, which contact centre calls result in a positive reaction and what intelligence can be inferred from their web browsing history or purchases.
Done correctly in this way, data-driven marketing helps present brands with a clear view of each customer as an individual, allowing both real-time and offline marketing campaigns to be interactive dialogues, rather than irrelevant, over-frequent product pushes.
Another added benefit to using good quality data-driven marketing is its cost-effectiveness. Brands can use the technology needed to segment customer bases and target communications for a lower cost than other offline methods. Christian Howes, digital solutions architect at agency Webtrends, explains: “Mining data and keeping it healthy is so much cheaper than acquiring new data.”
This was most recently demonstrated by Royal Mail’s Mail in the Digital Age campaign, which was targeted at the top 3000 advertisers and their agencies and based around research that shows that digital campaign payback can be improved by 62% when integrated with direct mail activity.
Tom Hings, head of brand marketing at Royal Mail, says: “The Mail In The Digital Age campaign proved a huge success with the target response rate of 5% smashed in just three days with more than 12% of customers using the personalised URL they received in a direct mailing to visit a specially designed microsite.
Given the plethora of tools and resources available to UK data marketers, there is absolutely no excuse for poor data quality standards to still exist. Incorrect addressee information results in deterioration of your brand perception, and suppression tools should always be used to ensure minimal brand damage
Adele Pett, SMP
“This success is testament to the engagement created by an original creative concept combined with clear and effective targeting based on clean, up-to-date business and customer data.”
Making sure that data is clean is essential to the success of this endeavour. However, with brands running the risk of losing customers if they fail to ensure that their data hygiene is immaculate, they need to ensure that they are checking stored data on a regular basis, with consumers regularly changing their personal lifestyles with house moves, job moves, deaths, marriages and name changes.
Jo Bell, commercial director of agency Millennium, explains: “In today’s financial environment when budgets are under even more scrutiny, importance of data quality is paramount. Implementing regular data hygiene techniques such as screening for deceased individuals will pay dividends.
“Research that Mortascreen conducted earlier this year highlighted that 87% of consumers would cease trading with an organisation if they received a piece of direct mail addressed to a deceased family member. This is a risk that brands simply cannot ignore.”
Loyalty card Nectar claims its business relies on ensuring that its data is regularly cleansed and is of the highest quality to ensure that its members get the best offers communicated to them on a regular basis and that consumers actually receive the “reward” points that they are entitled to.
Jan Pieter-Lips, managing director of Nectar, says: “We rely on having the best quality data for our database of more than 12 million members. Inaccurate data and poor maintenance would cost us dearly and could ultimately be the failure of our service.”
Avoiding such failures should be the focus of all brands. Adele Pett, head of direct at agency SMP, says: “Given the plethora of tools and resources available to UK data marketers, there is absolutely no excuse for poor data quality standards to still exist. Incorrect addressee information results in deterioration of your brand perception, and suppression tools should always be used to ensure minimal brand damage.”
Umporn Tantipech, director of customer management programmes at Teradata, adds: “Healthy data is the basic foundation of being able to develop any sort of customer engagement, get it wrong and it will be an uphill battle to resolve this.”
Research specialists such as Mintel are also leading the way in embracing data-driven marketing to ensure that brand marketing campaigns tap into audience insights. The company says that it relies on providing data that can “positively impact our clients’ business” and if it fails to provide good enough quality in this area, this would damage its own brand values as a supplier.
To add an extra dimension to its services, Mintel also hosts dedicated webinars examining consumer reactions to the economic downturn and how businesses can understand this behaviour and adapt their strategies accordingly.
Such data can only be a useful asset as brands aim to capture the slowly lifting signs of consumer confidence. Marketers who look at developing new strategies to use segmented clean data to create relationships with consumers stand a far better chance of being remembered in the future and reduce the cost of having to mail everyone with the same message at the same time.
David Rolfe, head of client services at Snowball, concludes: “It might sound counterproductive, but the best way to be cost-effective is to invest more money in segmenting your data. Investing more in your profiling strategy means that you can save money in the long run. Strategic thinking is the way forward.”
Case study: Ladbrokes
Ladbrokes improves marketing using customer data
The UK high street betting market is fiercely competitive. Ladbrokes is hoping it can encourage loyalty through its customer retention management programme, developed with agency Iris, accompanied by an “Odds On!” loyalty card.
With the Odds On! card, customers earn points for Free Bets and bonuses on their winnings. The programme allows Ladbrokes to collect data, understand their customers and communicate with them directly.
Data has to be cleansed and updated to ensure contact is made effectively, with Ladbrokes able to give the right message to the right customer at the right time, either by email, mobile or in person via shop staff. Contact is made in what Iris calls a socially responsible way, with opt-in and opt-out rules carefully managed.
Ladbrokes can now segment its customer base and target its communications to the right people. Customers opting in to marketing receive offers and promotions that are relevant to them based on their previous behaviour. This allows Ladbrokes to focus its marketing budgets and track customer response more effectively – a major advantage during a slower economy.
Sally Taplin, a director at Iris, says: “This programme allows Ladbrokes to maintain regular contact with its loyal customers and target them with offers based on their previous betting behaviour.
“They value the service and appreciate the targeted communications because it is based on their behaviour. It makes it easy for us to cleanse the data routinely because they want to keep receiving these messages.”