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Support Services: Spinning Customer Files Into Gold

1 Oct, 2009 By: Jim Kabakow Response

In order to maximize profitability and ROI, marketers must capitalize on every opportunity to generate incremental revenue from customers and prospects. Useful and actionable data resides inside most companies' internal databases. But this valuable trove of information often sits idle in customer files, and is not maximized, leaving sales potential unrealized.

TV, Online Marketers Just Beginning to Get It

Multi-channel remarketing to customer files has proven to be a valuable practice for many — including publishers, catalogers and club/continuity marketers. Others, including those that use DRTV as a primary promotional channel, are just starting to see the value in multi-channel database marketing. I believe that opportunities abound for them to market to current customers and convert prospects to buyers.

In a similar fashion, companies primarily marketing online tend to not maximize all facets of direct marketing for re-promotion, not realizing its value in terms of driving prospects or customers back to their Web sites.

Recently, a high-end cosmetic treatment company that had focused on DRTV, but had not remarketed through other channels, decided to test. One mailing to unconverted leads produced an astounding ROI of 700 percent. While this is certainly not typical, it can — and does — happen. This company had many factors in its favor: a database full of prospects who had shopped but dropped; a fairly high-ticket product; a good direct mail package; and a strong value proposition.

Remarketing Vehicles

There are three key ways to remarket — direct mail, outbound telemarketing and E-mail. Direct mail tends to have the highest response rates, but is also the most expensive, so it requires a greater degree of sophistication in database segmentation. Companies need to test strategically to determine the most effective mix of segment, offer and creative for each campaign.

With current legal restrictions on outbound telemarketing, prospecting opportunities have been reduced. But promoting to leads and customers in compliance with legal regulations can be extremely effective, as a relationship exists with these consumers.

Regardless of the vehicle, it's imperative to segment the file using RFM (recency, frequency, monetary value) and other proven segmentation methods to lay the groundwork for success. Companies tend to segment less with E-mail because, with its low cost, it can be profitable even with a mass approach. But segmentation can provide a much more relevant E-mail message, increase the response rate and reduce the opt-out rate.

Maximizing ROI

To maximize ROI and lifetime customer value, marketers need to use their files to re-promote to customers on a regular basis. This can include upselling higher value items, or cross-selling additional products and services based on the initial purchase. Also, try reactivating expired customers, again using direct mail, telemarketing and E-mail. If you have regular contact through transactional documents, inserts or on-statement messaging can be extremely effective. The emerging TransPromo technologies employ variable imaging, eliminating print cost and reaching a customer base to deliver targeted marketing messages with full-color imaging.

Personalized URLs in E-mails or direct mail are another effective way to increase ROI. These links lead to highly targeted offers on landing pages, based on customer data and purchase history. This practice can provide information to develop the right combination of message, offer and graphics.

The Importance of Analysis

After a remarketing campaign, it's important to analyze results with all data available, including matchbacks — comparing new unsourced orders against the promotion files to determine results by source. This allows a company to analyze promotional spend more precisely and allocate more intelligently in future campaigns.

One last tip: overlay third-party demographic data onto your customer file data to enhance segmentation and targeting. While everyone has customer data from purchases, adding additional demographic data can only enhance the value of your customer files.

Jim Kabakow is CEO of Media Horizons, a 21-year-old direct marketing agency that specializes in customer acquisition and current customer marketing. For more information, E-mail
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About the Author: Jim Kabakow

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