As apart of our talk on database marketing today we are going to discuss on analytical and modeling which is also important factor of the database marketing. We have already discussed on many important factors like consumer data, business data, and source of data for database marketing.
Analytics and modeling
Companies with large databases of customer information risk being "data rich and information poor." As a result, a considerable amount of attention is paid to the analysis of data. For instance, companies often segment their customers based on the analysis of differences in behavior, needs, or attitudes of their customers. A common method of behavioral segmentation is RFM, in which customers are placed into subsegments based on the recency, frequency, and monetary value of past purchases. Van den Poel (2003) gives an overview of the predictive performance of a large class of variables typically used in database-marketing modeling.
They may also develop predictive models, which forecast the propensity of customers to behave in certain ways. For instance, marketers may build a model that rank orders customers on their likelihood to respond to a promotion. Commonly employed statistical techniques for such models include logistic regression and neural networks.
Tuesday, December 30, 2008
Database Marketing – 3
Business data
For many business-to-business (B2B) company marketers, the number of customers and prospects will be smaller than that of comparable business-to-consumer (B2C) companies. Also, their relationships with customers will often rely on intermediaries, such as salespeople, agents, and dealers and the number of transactions per customer may be small. In B2c, business is having direct relation with customer. For example, an online blinds store who are selling roller shades and woven wood shades products.
They don’t have any intermediaries. Business is selling directly to customer. As a result, business-to-business marketers may not have as much data at their disposal. One other complication is that they may have many contacts for a single organization, and determining which contact to communicate with through direct marketing may be difficult. On the other hand the database of business-to-business marketers often include data on the business activity of the respective client that can be used to segment markets, e.g. special software packages for transport companies, for lawyers etc. Customers in Business-to-business environments often tend to be loyal since they need after-sales-service for their products and appreciate information on product upgrades and service offerings.
Sources of customer data often come from the sales force employed by the company and from the service engineers. Increasingly, online interactions with customers are providing b-to-b marketers with a lower cost source of customer information.
For prospect data, businesses can purchase data from compilers of business data, as well as gather information from their direct sales efforts, on-line sites, and specialty publications.
For many business-to-business (B2B) company marketers, the number of customers and prospects will be smaller than that of comparable business-to-consumer (B2C) companies. Also, their relationships with customers will often rely on intermediaries, such as salespeople, agents, and dealers and the number of transactions per customer may be small. In B2c, business is having direct relation with customer. For example, an online blinds store who are selling roller shades and woven wood shades products.
They don’t have any intermediaries. Business is selling directly to customer. As a result, business-to-business marketers may not have as much data at their disposal. One other complication is that they may have many contacts for a single organization, and determining which contact to communicate with through direct marketing may be difficult. On the other hand the database of business-to-business marketers often include data on the business activity of the respective client that can be used to segment markets, e.g. special software packages for transport companies, for lawyers etc. Customers in Business-to-business environments often tend to be loyal since they need after-sales-service for their products and appreciate information on product upgrades and service offerings.
Sources of customer data often come from the sales force employed by the company and from the service engineers. Increasingly, online interactions with customers are providing b-to-b marketers with a lower cost source of customer information.
For prospect data, businesses can purchase data from compilers of business data, as well as gather information from their direct sales efforts, on-line sites, and specialty publications.
Monday, December 29, 2008
Database Marketing - 2
Database marketing has flourished in sectors, such as financial services, telecommunications, and retail, all of which have the ability to generate significant amounts transaction data for millions of customers. Database marketing applications can be divided logically between those marketing programs that reach existing customers and those that are aimed at prospective customers.
Consumer data
In general, database marketers seek to have as much data available about customers and prospects as possible. For marketing to existing customers, more sophisticated marketers often build elaborate databases of customer information. These may include a variety of data, including name and address, history of shopping and purchases, demographics, and the history of past communications to and from customers. For larger companies with millions of customers, such data warehouses can often be multiple terabytes in size.
Marketing to prospects relies extensively on third-party sources of data. In most developed countries, there are a number of providers of such data. Such data is usually restricted to name, address, and telephone, along with demographics, some supplied by consumers, and others inferred by the data compiler. Companies may also acquire prospect data directly through the use of sweepstakes, contests, on-line registrations, and other lead generation activities.
Consumer data
In general, database marketers seek to have as much data available about customers and prospects as possible. For marketing to existing customers, more sophisticated marketers often build elaborate databases of customer information. These may include a variety of data, including name and address, history of shopping and purchases, demographics, and the history of past communications to and from customers. For larger companies with millions of customers, such data warehouses can often be multiple terabytes in size.
Marketing to prospects relies extensively on third-party sources of data. In most developed countries, there are a number of providers of such data. Such data is usually restricted to name, address, and telephone, along with demographics, some supplied by consumers, and others inferred by the data compiler. Companies may also acquire prospect data directly through the use of sweepstakes, contests, on-line registrations, and other lead generation activities.
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