30th May 2012

Making the most of your customer data

Morgan NolanAccount Director Data Ireland

30th May 2012

Sorting out my data is just too big a challenge

Data

Data

30th May 2012

Importance of a customer database

• The better businesses manage their relationships with customers the more successful they will become and a good CRM database is the first stage in developing a these relationships.

• In a shrinking economy there is less opportunity to win new business and the focus on maximising value from existing customers has become increasingly important for the survival and future growth of businesses.

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10 reasons to have a customer database

So what are the reasons for having a customer database:

1. Retain existing customers2. Build loyalty by providing personalised service and communication3. Generate referrals from satisfied customers4. Provide insight to growing your business from external sources5. Analyse sales data and customers information6. Focus your marketing activities more precisely7. Target special offers to key groups of customers8. Measure the effectiveness of your marketing activity9. Increased sales to existing customers through cross-selling activity to analysed

segments of your customer base showing the highest propensity to increase their purchases

10. Improved marketing communications

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Building your customer database

1• Define the database functions

2• Define the information requirements

3• Identify the information sources

4• Select the database technology

5• Populate the database

6• Maintain the database

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Customer information fields

CONTACTS

Account Number 12345678

Title Mr

Forename Joe

Surname Duffy

Job Title Managing Director

Telephone +353 (0)1 8584864

Mobile +353 (0)86 1234567

Email Joe.duffy@abcltd.ie

ADDRESSES

Account Number 12345678

Company Name ABC Ltd

Address 1 19 Andrew Street

Address 2

Town Dublin 2

County

Country Ireland

TRANSACTIONS

Date Account Number Product Qty Value

01/02/2012 12345678 AW390-12 2 €1,000.00

01/05/2012 12345678 AW078-04 8 €400.00

COMMUNICATIONS

Account Number Type Code Date Response

12345678 OBTM OC0112 01/2012 Sale

12345678 DM DC0312 03/2012 Sale

00184786 DM DC0312 03/2012

00184786 IBTC 03/2012 Suppress

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Data information sources

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Data information sources

Customer Information

Sales

FinanceCustomer Services

• Purchase History• Contact Details• Buying Criteria• Terms of Trade• Competitors Used

• Satisfaction Levels• Complaints• Communication History

• Payment History• Credit Rating

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Gathering basic data – common pitfalls

• Requiring a postcode on web application forms for Irish addresses.

Fields Record 1 Record 2 Record 3 Record 4 Record 5

Address 1 12 The Mews 12 The Mews 12 The Mews 12 The Mews 12 The Mews

Address 2 Clonsilla Rd Clonsilla Rd Clonsilla Rd Clonsilla Rd Clonsilla Rd

County Dublin Dublin 15 Dublin 15 Dublin 15 Dublin 15

Postcode 15 D15 N/A 00000 Dublin 15

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Gathering data from your website

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Other common pitfalls

• Not providing enough space for email addresses on paper forms.

• Not requesting a street for business records.

• Recording age groups rather than dates of birth. In 2 years time someone categorised as 25-34yrs could anywhere between 27 and 36.

Company Name Data Ireland Data Ireland

Address 1 Dublin 2 19-24 St Andrew Street

Address 2 Dublin 2

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Pitfalls in gathering data from paper forms

• Allowing free entry of address data on paper forms.

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Some basic maintenance tips

• Control the quality of data entering the database – especially name and address details.An Post - Business Customers

• A hastily taken name & address can lead to duplicates, poor deliverability, damage to your business’ image and make it difficult to complete analysis.

• Record privacy preferences.

• Record changes in details such as applying changes of address both from customers and external sources.

• Flag suppressions – e.g. record undelivered mail.

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Find the hot shots

Recency Frequency Monetary

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Lifetime Value

Best Customers Average Customers

Purchase per year 2 2

Average order value €70 €50

Annual revenue €140 €100

Gross profit margin 10% 10%

Gross profit €14 €10

Acquisition cost €8 €4

Net profit €6 €6

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Lifetime Value

Best Customers Average Customers

Life expectancy 3 years 2 years

Year 1 revenue €140 €100

Year 2 revenue €110 €60

Year 3 revenue €85 €0

Lifetime revenue €335 €160

Gross profit margin 10% 10%

Lifetime gross profit €33.50 €16

Acquisition costs €8 €4

Lifetime net profit €25.50 €12

It’s a bit like the difference between declaring success after a one night stand and a long term relationship.

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Prospecting – where to find them

• Armed with an in-depth understanding of your customers and market characteristics you are better placed to focus acquisition spend in the most profitable areas.

• Buying or renting external lists is an easy way to target new customers.

• There are several sources for these lists and many can be segmented to provide a finely tuned list of prospects.

• When buying data you are not just buying a list. You’re buying an audience.

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Prospecting – where to find them

Business Lists Consumer Lists

Industry sectors Lifestyle preferences

Specific job titles Socio-economic groups

Geographic location Age groups

Company size Geographic location

~€250 per 1,000 records ~€170 per 1,000 records

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Some key questions to ask your data supplier

• Is the data for single or multiple use?

• How recent is the data?

• Has it been collected in a compliant manner?

• Is there a returns policy?

• Does the data need to be used by a particular date?

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Data ProtectionConsiderations

Postal Marketing Text/Email Marketing

Phone Marketing to Landlines Fax Marketing Phone Marketing

to Mobile Phones

Individual Customer Opt-Out

Opt-0ut (provided similar product or

service) Opt-Out Opt-Out Opt-Out

Individual Non-Customer Opt-Out Opt-In Opt-In if on NDD,

Opt-Out otherwise Opt-In Opt-In

Business Contacts (Customer & Non-

Customer) Opt-out Opt-Out Opt-In if on NDD,

Opt-Out otherwiseOpt-In if on NDD,

Opt-Out otherwise Opt-In

www.dataprotection.ie

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Conclusion

• The long term effectiveness of adopting a strategic approach to your customer database, analysis and understanding will be seen in increased revenue, lower costs, better insight and increased customer retention.

• Set up correctly and well maintained, it will help deliver sustainable profitable customer marketing actions and will also provide confidence in using external resources to find new customers.

• Questions?