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REVIEW
Feeding on third parties
Customer data is valuable, but it does
ingle customer views really deliver their value through providing
not tell you everything. David Reed
S
100 per cent visibility of the customer. Particularly with retention
such a key marketing strategy this year, it is more important than
ever to see the total customer asset base in order to plan
explains why the best insight into a
campaigns, identify potential for growth and check for churn.
At the same time, SCVs can also give a misleading impression.
customer may come from third parties.
Complete visibility of the customer is not the same as complete
knowledge. There are many things that a customer will never tell a
company, even one they have a relationship with, from date of birth
right up to the fact of death.
In many trading scenarios, this information does not matter. Yet as
companies look into how their SCV can drive the business this year,
they are starting to recognise that it is important to fill in the gaps in
that customer knowledge.
The second place to look for this data is in the commercial data
marketplace. In the past, matching to an external data set did not
always provide a high rate of enhancement, yet was nearly always
expensive. Now, however, things have changed.
“Looking at your existing customers and enhancing your SCV is a
sensible thing to do,” acknowledges Peter Mayne, key account director
at The Trading Floor. “We are working with a number of brands on
exercises such as appending email addresses to existing records to
provide a new way of communicating with them.”
Switching to digital channels is central to the marketing activity
which is going to drive retention, not least because it is much cheaper
than other media. This is one of the critical moments when
organisations discover the deficiencies of their SCV and have to turn
to a third party for help.
Mayne says that many clients in his company’s core market sectors
of financial services and automotive tend to hold only limited data on
customers. This may reflect a low transaction frequency, such as
buying a car every three years, which does not yield much
opportunity for capturing extensive data.
“A bank may have a customer for many years, but they might never
have been cross-sold motor of home insurance,” he says. By
enhancing the SCV with insurance renewal dates for those products,
marketing can suddenly become far more timely and therefore
effective, while contributing to retention goals.
What such enhancement exercises throw up are important
questions about data licences, ownership of variables and budget. As
Mayne points out, there is little point paying to add a variable across
an entire database if only a portion of it will be marketed to.
“We might advise a client right now to take insurance renewal dates
for customers that fall in the second quarter of this year, rather than
spend to enhance across the whole year,” he points out. By purchasing
additional customer variables in a cycle that is attuned to the
marketing programme, return on investment is much more immediate.
It might seem as if a bank would be well placed to ask its
customers when they renew their car or motor insurance. Yet in
reality, the opportunities to do so are relatively limited and the
response rate likely to be low. By purchasing the data from a company
which is solely focused on data collection, much greater coverage
(and accuracy) can be achieved.
As Tony Lamb, head of data development at Royal Mail, points out, “as
an organisation, you have a right to ask certain questions, but not others. A
typical thing most organisations want to know is age. But if you are just
buying a book online, for example, being asked that isn’t appropriate.” a167
5 DATA STRATEGY | REPORT | APRIL 2009
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