Is Database Marketing Too Complex for Most Marketers?
When Rodale was overhauling its customer database eight years ago, the company planned to extend access into the 50 million-name repository to the entire marketing team;analysts and marketers alike. However, because of the complexity and potential of such a large collection of information, the company quickly determined that it belonged in the hands of staff with a specialized skill in data analysis. And as the database grew into more than just a subscription-marketing tool, Rodale shifted the business-development focus of the database to encompass direct response, third-party sales and aggressive custom applications tasked with increasing retail sales efficiencies and distribution. Rodale's original dilemma raises interesting questions about how a publisher's customer database should be accessed, who should access it, and how those individuals can best guide the strategies behind its use.
More than Just Subscriptions
"We're probably one of the few publishers that uses the database for more than subscription marketing," says Todd Leiser, Rodale's vice president, database marketing. "We use the database for that as well, but 70 to 80 percent of the time is used for direct response as opposed to circulation activities."
That emphasis, says Leiser, is a result of the targeted interests of the typical Rodale consumer. "The database and associated tools, such as regression modeling, have enabled us to promote to those consumers who are most interested (and therefore most responsive) to our specific offers," he says.
The active customer portion of the database contains about 25 million names, says Leiser, but he is quick to note that there's another 25 million inactive names going back more than ten years. "It's not only who we're going to promote to, it's when not to," says Leiser.
There are several types of promotions that come off the company's database. For example, over 100 million direct mail and 300 million e-mail promotions are sent yearly. And including other types of promotions, the marketing team conducts a total of close to 500 million customer contacts per year.
A recent example is their efforts with customer acquisition for Prevention. Leiser says that more than 500 segments, such as demographics and purchase experience, were parsed out of the database to target the mailings (a typical campaign has about 50 segments). In January, response rates were up about 20 percent, says Leiser.
Critical in Prevention's promotion strategy was 'creative versioning.' Leiser's data team matched customer prospects with creative from marketing that emerged from specific magazine editorial. "There are a lot of editorial categories in Prevention;weight loss, general health, exercise;that will resonate with different customer groups," says Leiser.
In addition to direct response and subscription marketing as in the example of Prevention, the database's other primary uses include list rental (straight and enhanced selections as well as regression model building for third-party mailers), and retail sales (using customer information to more effectively target draw).
The Data Teams
There are two groups that access the database, says Leiser. Both are organized within the overall corporate marketing group. The database selections group has six people who run the queries and execute the promotional campaigns. "These users understand the nuances of customer data and are very effective at writing and running complex queries in a relational database environment," says Leiser.
The database marketing group consists of four people who are the statisticians and analysts. "They're doing the trending, building out the statistical models and recommending to marketing what models to run," says Leiser, who adds that growth is focused on this group. "We need more analysts who can access the data and run new reports."
The teams grew out of an unsuccessful attempt eight years ago to include the marketers in the data analysis and modeling efforts. "We really had hoped to put the tools in the hands of the marketers. We went through the effort of training the folks to do it on their own, but it was too complex for the typical marketer who's more worried about creative," says Leiser.
Nevertheless the current organizational structure facilitates a great deal of interaction between the data group and the creative group. Indeed, Leiser is positioning the analysts to independently run models to uncover new opportunities to present to the marketers. "More and more we're pushing the analytics to drive more initiatives. They're very well positioned to recommend new ideas to the marketers. One of the challenges is finding people who can build the analysis and then prove to the marketer that there's something to pursue."
Rodale Customer Database Snapshot
- Number of customers: 50 million total. 25 million active, 25 million inactive.
- Number of customer contacts: 500 million per year.
- Primary Uses: Direct response, sub marketing, list rental, retail sales efficiencies.
- Average number of customer segments used in a mailing: 50
- Number of staff with access: Ten. Six in database selections group, four in database marketing group.