Direct Response Marketing

Digging for New Sales

1 Oct, 2007 By: Courtney Beth Pugatch Response

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More and more direct response marketers are using database mining to add to their bottom lines.

How many times has the following scenario played out? Product XYZ has performed successfully in all major direct response channels and makes its way to retail distribution. A few months pass by, and now the company that produces Product XYZ needs to find a way to peak consumer interest, since sales for the product have slowed down.

Often, companies in this position will resort to the tried-and-true methods of marketing in hopes of making an impact: coupon discounts, flyers, loyalty programs, blanket E-mails and direct mail.

While all of these techniques have worked in the past, companies are literally spending (and often wasting) billions of dollars in advertising that has little return on investment (ROI) or a sense of who customers are and where they came from.

What if there was a way to send information to customers that would lead to the biggest ROI? What if companies could take the information from current customers and turn them into repeat customers?

There is. It's called "database mining."

What is Database Mining?

When consumers purchase products, companies that supply these items are left with two valuable things: profits from their sales and customers' information. While the first benefit can be considered short term, the second advantage can provide a wealth of information for companies that opt to sort and use consumer information appropriately.

This sorting process is most commonly referred to as "database mining."

Analyze This!

Database mining isn't a new concept. In fact, it's been around for quite some time. The process is actually becoming more of a necessity to make campaigns work profitably these days.

Scott Swanson, vice president of sales, Motivational Fulfillment & Logistics Services (MFLS), says that database mining takes compiled information and sifts through it to find new and useful information. MFLS has used this process to construct new avenues of revenue for its clients.

With database mining, companies are urged to go beyond their numbers to unearth true business insight — culminating in the process of uncovering "hidden truths" in their databases.

Simply stated, database mining is the ability for companies to analyze its data in a measurable way to deliver a marketing or business insight that could not have been seen otherwise.A0From a marketing standpoint, this insight can take many strategic forms, such as a contactA0management strategy, a new segmentation process or an actionable analytical model that can be deployed in customer relationship management.

Get the Facts!

"Surprisingly, a lot of clients don't even look at their data. We suggest just looking at common threads in the data such as age, geography and buying patterns to start," says Swanson. "Sometimes you can find something just in this step. If the database is older or has been mined previously, we'll suggest looking to other companies that have advanced software to help explore deeper."

How Database Mining Works

With increasing media costs, companies have to make the best out of the information they are capturing from the purchasing or inquiry customers.

If customers are labeled as purchasing, companies will need to maximize their lifetime value by selling them more than just the initial product that had prompted their inquiries. If they didn't purchase an item, then companies will need to re-establish contact and turn them into repeat sales to maximize the initial ROI.

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