Seen as both an art and a science, database management is all too often left homeless within organisations that are too focused on the end game, rather than the foundations to long term marketing and sales success. It is often generally undervalued as a corporate asset and given a low priority in the scheme of things as it can easily give the illusion that it is perpetually self-sustaining.
When a marketing database is built and managed within an organisation that ‘gets it’, it is designed to drive revenue, grow value for the business and bring business insights and new opportunities to the organisation; but with the implicit understanding that this takes time and money to maintain like any other asset.
When it is neglected and misused, its value is quickly diminished, as sales and marketing plans become crippled by spiralling results and customer attrition. Here are six must-dos to bring out the real value of a healthy and progressive database.
1. Before all, dedicate resources to manage your database, maintaining quality, build value and measure the impact of activities on it.
- A corporately driven focus on data is paramount. It is an asset and should be seen as such. Investing in your data is investing money in the bank. It should not be managed as an afterthought or as an appendix to the job descriptions of your marketing team.
2. Manage list sources closely.
- If you use third party lists, source from reputable vendors or partners. Rule of thumb, if the organisation or the data sources look dubious and are not transparent stay well away. Reputable data providers will have strict codes of practice that they will share with you, and will most likely be fully-paid up members of the Direct Marketing Association of whichever territory you are in.
- Categorise your new data by source so that you can relate attrition and value to the data source and provider, allowing you to prioritise your acquisition efforts. You should also calculate what is an affordable cost per acquisition for your organisation based on standard business models and metrics. This is different to understanding what your actual cost per acquisition is!
3. Implement data hygiene efforts vigorously throughout your data collection channels and through regular maintenance.
- Keeping the contact information and preferences of your customers up-to-date is imperative. A preference centre can greatly help manage and maintain the subscription list and subscribers’ preferences effectively. But don’t forget, reminding subscribers to update their preferences is an on-going campaign in its own right that should extend to all touch points.
- Ensure you have a reliable and automated opt out procedure in place that handles un-subscriptions efficiently across channels and that they are suppressed from future mailings according to local and regional regulations and best practice.
- Set a standard for data quality and stick to it. Filter out low- and no-value data right from acquisition. If a record is incomplete, work quickly to update or bin it. Inflating a database size is self defeating and ultimately impacts your ROI.
- Don’t mail the dead, literally: Look to remove inactive customers or prospects once every 6 months - if they have not interacted with you in any way in 3 to 6 months they likely never will and are only costing you money.
4. Measure the performance of your database
- Establish metrics to measure the monetary value of your records. This measurement will be an equation based on cost of maintenance, financial returns, activity, purchase history and sales propensity.
- Your data is unique to you. Don’t blindly apply industry practice. Measure and check what works for you.
- Measure the impact of frequency on performance: If you send too frequently, you are in danger of becoming irrelevant with your message and increasing complaint rates and attrition. If you communicate infrequently you could be leaving money on the table as your product and brand are simply not top of mind. Again what works for others might not work for you. Test to find your optimum mailing frequency to revenue ratio.
5. At a minimum monitor and report the trends of value and investment, size, performance and attribution of your active database on a quarterly basis to senior management. By talking in terms that they understand underpinned by a financial model, your efforts to increase budget allocation will decrease as long term value becomes more apparent.
6. Review the database regularly to ensure it has the structure to meet your organisation’s changing marketing needs.
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