thought starter #1: define your customers & measure the value of your marketing database

Thought-starter #1: define your customers & measure the value of your marketing database

One issue organizations often struggle with is “how to measure the value of investments made in its marketing database”. Let’s see if we can build a simple, yet practical, evaluation framework for the marketing database in your company. This approach I believe focuses more on process, information management and outcomes, and this approach is more actionable than traditional ROI measures

In today’s business environment, the highest deliverable value of your contact marketing database is the ability it gives you to target, segment and grade[1] your existing customers. Ideally, this repository of facts, through efforts to enrich the data, is transformed into a customer knowledge platform. The insight given from studying the database then is used to direct our customer[2] loyalty and retention efforts.

In the 21^st century marketing world, cutting-edge business-to-business marketing database efforts will measure at least these four dimensions:

a. external service values: i.e., what are the 3,4, or 5 primary reasons customers buy

b. why we lose customers (defection analysis)

c. operational database performance

d. social interaction and customer insight

The best of the best marketing databases in the ’80s and’90s demonstrated their excellence when measured against operational deliverables and measurements. Today, the world-class marketing database looks at why our customers buy (external service value), where/how we stand to lose them, its operational performance, and, finally, real-time, actionable research into the customer’s mind-set and definition of value.

Today we have richer information: for many of us an overwhelming richness of data & information. Our data mining tools are incredibly sophisticated. Overlay upon overlay of data can give us greater insight than ever before. In general this approach is given the umbrella title of “business intelligence”.

Easier said than done? Not really. You can gather this information initially through investigative research, and then subsequently maintain it through the ongoing contact your customer management center has with your customers, prospects and defectors, using phone, email, and social media. You can then interpret this marketing data to target, to segment and to grade your customers, sharing the data synthesis both inside your organization and with your channel partners to ensure you’re making needed improvements.

In order to add the greatest power to these efforts, you first must define your customer. Yes, define a customer, your customer! The definition of customer is the touchstone upon which all else rests. Without the definition, none of the other steps can take place, and none of this theory can touch ground and add value to your operations and its success.

---

[1] Grading does not refer to assigning customers “grades” as our teachers did; rather grading is a valuation process, which allows you to optimize your market coverage approach and to manage the limited resources your firm has in direct proportion to the expected returns on that investment. At its center, this approach looks at customer, prospects, & defectors as the portfolio of assets that must be managed proactively.

[2] Essentially the same holds true for partner management initiatives as well.