The Internet and Email

The Internet has transformed business over the last decade and marketing more than most other functions. Though email was well on its way up the charts in 1998, its use for marketing was very much in its infancy while ecommerce sales were virtually non-existent. The sites on offer ran at a crawl over dial-up and were horribly clunky. Remember Barclay Square?
Without the internet, it's hard to see how any of the advances in the last decade could have happened, and it has completely changed how companies interact with their customers. Sites like mobile network Blyk run completely on-line, offering over 200,000 UK 16-24 year-olds fully opted-in to receive communications on their mobile phones. It's claimed 29% average campaign response rate would have been hard to find a decade ago too.
Nothing to do with database marketing a decade ago, web analytics is now increasingly aligned with email and other channel marketing. Efforts by leading vendors to merge on-line and off-line customer data is perhaps the most exciting targeting development of recent years. If successful and not stymied by new legislation, this linkage will bring the richest behavioural information yet on individual customers.
"The breadth of digital interactions and the ability to analyse and track them today would have been nirvana for a marketer in 1998," says james Alty, Managing Director at Apteco.
Email has been variously hailed as the saviour and the death of direct marketing. the saviour because it embodies so many of the benefits of direct mail: in 2007, marketing email volumes overtook direct mail for the first time and the DMA estimate over 30% of the marketing budget is going into email.
Email's not as easy as it used to be though.
Deliverability is emerging as the great challenge and although straightforward sending costs are still low, more companies like Thomson are investing heavily in highly-targeted data-driven campaigns.
"There's a lot more targeting going on now," says Chris McDonald, Managing Director of The Trading Floor, which gathers registration data from online insurance and other enquiries. McDonald notes this has affected the type of data companies want to buy.
"To drive targeting, the market now increasingly wants multichannel contacts for a record, plus transactional and risk data too," he says. "Those selling just an email file will struggle."As well as being the enabler of many of today's vital marketing services such as remote database cleansing sites and on-demand CRM tools, the web has also become an invaluable data collection channel for database marketers. As response to traditional printed lifestyle surveys and warranty cards has dropped off, so data gathered in different areas of the web has taken its place at the leading edge of consumer data.
"The main trend in customer data has been the digital capture of data online," confirms McDonald. With its low delivery costs and incredible automated targeting potential, the importance of the internet can only grow. According to ecommerce industry body IMRG, around half of everything we buy in the next ten years will be online and the other half will be influenced by it.

(Database Marketing 10th Anniversary Issue- November 2008)

Data Strategy Awards. Winner, Data Provider of the Year 2008

Founded in 2005, The Trading Floor is a revolutionary way for companies to monetise dormant enquirer information. A central, independently-managed data pool, it provides contributors with a revenue stream and users with responsive and versatile data for direct marketing. Originally focused on the Insurance sector, coverage has expanded to include charities, financial services and automotive.

Year two for the business has seen phenomenal growth, despite difficulties for the wider data industry. Revenues rose 77% to £3.9 million, while data columes traded hit 117 million. The Trading Floor now aggregates data from 40 brands and has paid £1.8 million to data contributors, a rise of 103%.

Product development has seen the data pool expand with the addition of credit card, secured loan, mortgage and remortgage sources. Uncertainty in the financial services sector has seen a growing number of clients using the data for appending and profiling as part of customer retention strategies. Live customer data is also being hosted and managed for incremental sales to non-competitors.

The Trading Floor is now ranked the largest multi-channel list manager in the UK after just two years. With nine out of ten UK insurance companies and 12 of the top 15 direct marketers as clients, the business has also achieved 98% client retention.

Its data set has been used successfully by Hylton Group to drive sales of the Peugeot 207 through its dealerships. Using the predictive buying model for automotive, qualified prospects within a five mile radius were identified for email, with a direct mail follow-up to non-buyers,. The campaign achieved a 514% ROI.

Despite downward pressures in its sector, The Trading Floor has grown and launched innovative new products, many of them still undergoing confidential testing. With a team of 30 staff, it has driven tremendous growth. The company continues to challenge, improve and revolutionise data usage in both acquisition and retention marketing.

Why Pile It High, Sell It Cheap Just Does Not Wash

Regular screening can be 'a six-figure cost to make your eyes water'

Andrew Campbell's comment in Precision Marketing's special report on data quality (Time to get tough, PM May 30) that data owners and list managers do not bother to screen data against MPS and other suppression files because "it's a simple equation - the more data they sell, the more money they make" is not only insulting and derisory but more importantly shows a staggering lack of knowledge about prospect data provision.

Any good data managers among us know that the key to longevity in the data sales market is to maintain fresh, accurate data that consistently performs for the end user.

Regular screening of our 13 million prospect database is a six figure cost to make your eyes water, but one we consider vital as it means instead of "pile it high, sell it cheap" we can leverage decent CPM for our contributors while maintaining integrity and churn.

Campbell needs to be questioning his data suppliers a little more closely - unless he is one of those buyers constantly looking to screw the cost of the data down as low as possible.

Zoe Vine, Head of Data Services, The Trading Floor, West Yorkshire

(Precision Marketing: Opinion - 13th June 2008)

Making Connections - Zoe Vine

Too many marketers are still making the wrong moves towards truly understanding the behaviour of their prospects and customers.

"It IS possible to connect with your customers in a way that's more meaningful to them and more profitable to you" - Zoe Vine, Head of Data, The Trading Floor

The "one size fits all" approach has long been considered an outpost of modern marketing. Now more than ever, businesses are turning to strategic data analysis to gain more actionable insight into what is motivating and driving a purchasing decision.

My letter box is piled high with so much direct mail that my postman leaves me notes begging me to clear the mailbox. Telesales calls are met with the "reject call" button. Me - I'm your traditional time-poor, cash-rich kind of girl (keep this in perspective, I don't have a fleet of Porsches lining the sweeping driveway, this is Yorkshire you know) - and for the last four years I have almost exclusively bought every product and service online, often at strange hours of the day in between working, walking dogs, entertaining clients and trying to get some sleep.

Similarly, the products I buy do not necesssarily relate to my lifestyle or lifestage - last month alone I spent £130 on baby products, resulting in a glut of sales messages for multipurpose vehicles and holidays with creche facilities in that poor over-loaded letter box. Said purchase of baby products didn't mean a new addition to my household, more a spate of present buying for friends recently visited by that pesky stork.

So why do companies find it so hard to engage my interest in products that are meaningful and through a method I find acceptable?

Management by fact

Too many companies choose to focus on analysing a customer's past behaviour, when what they are really interested in is how that customer will behave in the future. The gap in knowledge between knowing how someone has previously behaved and predicting how they will behave is massive. The data that companies hold may be transactional, it may even be clean and recent, but it won't necessarily lead to any meaningful insight. Customers always act within a context, and this constantly changes as new products emerge, events happen and life stages change. Historical data can give you the what they did, but rarely the why they did it.

Piecing together the customer intelligence puzzle requires assimilation and evaluation of all the demographic, attitudinal and transactional data sets available to build your process and techniques. Three key steps help to paint this picture of the consumer's buying habit:-

Asking the questions

What data do you hold on each customer? What information can be deduced from each piece? What's the best way to harness this information for future sales? Management by fact is crucial to all these questions - basing your answers on a set of out-dated assumptions renders these questions near enough redundant.

Question the answers

Identify the key triggers within the data what happened at that point in the customer cycle to generate the sale of that product at that time? Does a shift in behaviour in one sector automatically lead to a shift in others? Adopting a variety of clustering and profiling techniques enables clear identification of customers with similar behaviour patterns and demographic trends. Drive robust statistical data sets to generate a variety of predictive models for cross and up selling purposes.

Mining the answers

Don't just ask the questions once - ask them frequently. An answer given 12 months ago may not necessarily be true of the individual if the same question was asked today. Similarly - ask WHY the answer is different - establish the cause for change driving the difference and back up an isolated piece of information with others that work to support or deny the information in question.

Reducing the assumptions made on a customer is the holy grail data-wise in the 21st century - just as a customer's purchasing decision is unlikely to sit in isolation from external events, so too that in order to examine context and behaviour a customers data needs to be cross-pollinated against external sources.

The Trading Floor recently worked with a well-known Travel company to supplement their existing knowledge by appending indications of recent significant expenditure from insurance and finance companies (purchase of a new house or a new car) against lapsed customers of their top of the range holidays, to drive financial triggers as to the likelihood of that customer to next spend with the brand. Examining travel insurance purchases have also helped the brand to identify where lapsed customers have booked through a competitor instead.

Partnership data pools are increasingly well recognised within industries as being more cost-effective, better targeted and more accurate means of reaching customers and prospects. Alongside The Trading Floor's multi-industry, multiple-channel pool, the Mail Order market has its pools with Abacus and Transactis, and Occam holds Reciprocate, their answer for the Charity market.

Undertaking to build a partnership data pool to supplement the organisation's existing data sets by matching against third party transactional, demographic and lifestyle data is horrendously time consuming, not to mention hugely expensive both in terms of licensing the data and hosting and storing the pool.

Taking advantage of partnering with companies already operating data pools built from multiple markets and across multiple channels enables marketers to quickly build a learning curve from which to concentrate on contacting the right people, at the right time, in the right way - eliminating wastage and promoting better customer relations.

Your most important assets are your customers. It costs six to nine times more to acquire a customer than it does to keep your current one, not to mention the requisite retention period to return a profit. Your competition is poised to pounce on any customer who feels that the company doesn't understand, recognise and acknowledge them for their valuable patronage.

It IS possible to connect with your customers in a way that's more meaningful to them and more profitable for you. Step forwards Debenhams - on arrival at work this morning, having got soaked in a rain-shower, waiting in my in-box was an email inviting me to look at the latest range of anoraks to counter-act the Great British Summer.

Customer Intelligence at its best - topical, relevant, through my preferred channel. Quickest £60 I've ever spent.

(Data Strategy: Opinions on Data - June 2008)

Knowledge is Power

Gathering customer data is one thing. Making it work for you in an effective way to enhance return on investment and further your business is quite another.

At a time when data is the hot topic on everyone's lips, it can often seem that the more information you have, the less you actually know about what matters. Data is knowledge, and knowledge is power - and converting that data into knowledge of customers, and unlocking their spend potential, is a difficult, though crucial, task.

The fractured nature of most client databases, stemming from employing bolt-on "one size fits all" CRM solutions, means pools of valuable data sets are usually isolated and therefore unable to interact to provide the customer intelligence required to drive an effective marketing and communication strategy.

If you want to find out who your most profitable customers are you may find yourself interrogating several systems to add up their spend across each product type. Our database management division has found that generally, the more established the company, the more disparate the data storage facilities. It's a problem worth solving - the more you know about your customers, the better placed you are to maintain their custom, and to sell them additional goods and services.

Key to driving a system rationalisation is getting buy-in across the business - appoint a data steward in each business area, and agree and implement a data governance plan where sponsors are identified and accountable. Rationalising systems to create a single customer view delivers benefits across the three most important challenges marketers face: productivity, customer understanding and financial attribution.

The first piece of the customer intelligence puzzle is assimilating and evaluating your demographic, attitudinal and transactional data sets to build your processes and techniques. By profiling customers and prospects, and identifying the traits of customers that bring greatest value to the business, marketers can target new, high value customers. Equally, by having a full view of every customer's relationship with the business, and the ability to understand the customer life cycle, it is easier to spot and retain lapsed customers quickly, and to build deeper and more loyal business relationships.

Three key steps help to build the knowledge bridge:-

• Data interrogation - what data you hold on each customer, what information can be deduced from each piece, how it can be harnessed for future sales prospects. Without reliable data, you can do little to build your strategies.
• Segmentation - identifying groups of similar customers. A variety of clustering and profiling techniques can be adopted to identify customers with similar behaviour patterns and demographic trends.
• Hypothesis - once the segmentation is complete and you have robust statistical data sets, with a clear model of the customer life cycle, you can start to generate a variety of predictive models for cross and up selling purposes to existing datasets.

"Still too many companies choose to focus on analysing a customer's past behaviour - when what they are really interested in is what the customer will buy in the future"

Because customer segments can be quickly and accurately identified, the time to market for new products is cut. Marketers can concentrate on contacting the right people, at the right time, in the right way, which will eliminate wastage and promotes better customer relations.

Yet still too many companies choose to focus on analysing a customer's past behaviour - when what they are really interested in is what the customer will buy in the future. The gap in knowledge between knowing how someone has previously behaved, and predicting how they will behave is massive. The data your company has may be transactional, it may be clean, but it won't necessarily give you the key buying triggers and variables required to drive predictive models. Customers always act within a context, and this constantly changes as new products emerge, events happen, people move. You know some of what they did, but rarely why they did it.

It's likely that in order to examine context and behaviour you will need to supplement existing data sets by matching to third party transactional, demographic and lifestyle data sets such as The Trading Floor's insurance/finance pool.

Identifying trigger data through your previous data interrogation and segmentation work, you will select variables that provide the most value to your data set - anything from date of birth, to occupation, to what newspaper they read on a Tuesday, through to flags indicating a recent house move, their car insurance renewal month and additional contact information.

Complementing your database with additional information and producing qualitative and quantitative segmentation is the cornerstone to driving a customer intelligence strategy, and really understanding why your most valuable customers are buying from you, and how to find more of them.

Pin down your what, why and your when, and you'll not only cement a customer relationship for life, you'll have the biggest competitive advantage. 'Examine. Extrapolate. Enrich' should be the 2008 mantra for the customer-savvy marketer.

(Precision Marketing: Leaders on B2B Marketing - April 2008)

King For A Day - Chris McDonald

Sowerby Bridge-based Chris McDonald, MD of The Trading Floor, won't be Lonesome Tonight with Brazilian supermodel Giselle on his arm. Let's just hope he doesn't get the GI Blues when he leads his nation into battle.

Who would you choose as your Queen, and why? I would choose Giselle Bundchen. Shallow perhaps but I am the King!!!

What one law would you pass to make 'the lives of your citizens better? I would have drivers over a certain age tested every year.

Which form of Medieval torture would you re-introduce, and for whom? The ducking stool. I would start with Kerry McFadden and her husband.

Who would you bring into court to advise you on stately affairs? Jo Brand, Peter Kay and Ben Elton. Between us we could come to a realistic solution to most things!

What would you banish from this Fair Isle? Work shy fools, drugs and middle lane drivers - that would just be day one!!

Your bloodthirsty subjects want a war to boost morale - with which country do you pick a fight? How about the Americans? Only 17 per cent of them would even know where the UK was!

Finally, what monument would you like your people to build in your honour? I would like to have a monument representing England, Scotland, Wales and Ireland coming together as one - obviously in Yorkshire!

(EN Magazine - March 2008)

The Trading Floor top List Manager league table

... Second-placed The Trading Floor is also a big email data supplier, earning 67 per cent of its income from email in 2007. The company's main source of income is a data pool for the insurance and financial service industries, based on enquirer data.

"People typically get three quotes before they take a policy out," says Zoe Vine, head of data services at The Trading Floor. "So companies have a lot of information on prospects that they don't do anything with for 11 months of the year."

The Trading Floor pools this data from 36 contributor companies spread across the motor, home, pet and travel insurance, mortage and credit card industries. It is then enhanced and sold back out to the wider DM industry, taking 50 per cent of the revenues itself and sharing the other half among the contributing companies, based on a complex set of ' data survivorship' rules relating to who pooled the data and who enhanced it.

(Direct Marketing: The List Report – March 2008)