It’s about more than just collecting the raw numbers and data. Know how to analyze that data based on what you’re looking for and what questions need to be answered from it. An expert panel at the Philadelphia Direct Marketing Association’s meeting held earlier this month addressed this issue in a session titled “Database Marketing Myths, Mistakes and Masterpieces.”
Panelists David Geisinger, vice president of database marketing agency Merkle; Steve Max, e-business director of Airgas, a catalog/multichannel distributor of industrial, medical and specialty gases and related equipment to industrial and commercial markets; Perry Kahn, vice president of sales and business development at Infolure, a data processing products and services provider; and session moderator Rick Pollack, principal owner at Advanced Analytic Solutions, a statistical consulting firm, provided the audience with tips on how to most effectively manage their databases.
1. Invest time and resources into database marketing. As with any marketing plan, you can’t succeed without investing adequately, Geisinger said. He suggested looking at what competitors are doing and determining how heavily they’re investing in database marketing resources. Kahn added that tracking results and learning from past mistakes is a must in database marketing.
2. Form a hypothesis. Know what kinds of product- and customer-related information you want to get from your data, Max said. Determine whether you sell better seasonally, if you need to target your mailings to a particular demographic, whether your free-shipping promotions are effective, and so forth. Pollack suggested contacting a vendor to do a survey of your customers. Geisinger pointed out that every marketing dollar the insurance company Geico spends goes through a forecasting tool. This tool enables Geico to measure how much business will be driven to its call center from each marketing dollar, down to the medium used (television, radio, print) and the market area.
3. Only add to your database information that has marketing value. With the glut of data that exists in the world today, many marketers try to consume as much of it as they can. Be selective, Geisinger cautioned. Use online surveys, business reply cards, site registration, newsletters and other means to collect data.
4. Don’t just rely on technology. To benefit from your data, have an infrastructure in place to analyze it, Geisinger said. People too often rely on software to solve their problems, he noted. Build models to drive your next purchase.
Max pointed out that database analysis allows you to test response. For example, note certain keywords, time of day and demographics. This analysis will help you better manage and spend your advertising budget.
5. Consider outsourcing your data analysis. Kahn advised asking the following questions regarding data analysis:
* How much do you want to do yourself?
* How much can you afford to spend?
* Do you have people in-house who can do the analytics, or do you have to hire from the outside?
In many cases, the better and cheaper solution for a company is to hire an outside vendor to handle its data analytics.
6. Do your homework. When choosing a partner to buy data from, take small, calculated steps, Geisinger said. A common mistake that Pollack warned the audience of is choosing a vendor based solely on the fact that it does a lot of business in a particular industry. This proves nothing other than the fact that the vendor is well-connected in that industry, he said.
Do your research and choose based on a proven record of success. Geisinger advised talking to vendors’ clients to see how their results have been, as well as talking to independent research groups and asking for references. If prospective vendors are unwilling to provide you with references, he said, they more than likely have something to hide.

