Transform Your Direct Marketing by Better Using Customer Data

Look around you. Chances are that you're surrounded by data that can be used to improve your daily life. Do you want to know how to dress in the morning? Simply look out the window to see whether it's raining before ruining that nice leather jacket. The same holds true when using direct marketing to connect with your customers. If you own a business, then you're swimming in valuable customer data. Why not use that customer data to your advantage by taking a bit of time to capture and organize it?

A universal truth of direct marketing is that each of your customers has slightly different tastes and needs. Even if you only sell one product, then chances are that you still offer different colors, styles and sizes. The ability to understand and document your customers' tastes presents a powerful opportunity when using direct marketing to grow customer loyalty and generate more purchases.

The Evidence

The below images are of a simple postcard that my wife received in the mail about ten days ago. The message is simple, yet effective: if you have small feet, then you don't want to miss the hard-to-find-shoe-size sale at Nordstrom Rack. Now, I'm not a big shoe guy, but I've been on enough shoe scavenger hunts to know that women with small feet struggle to consistently find the shoes they want. Understanding this target audience enables Nordstrom Rack to execute a simple, yet highly effective direct mail campaign.

Needless to say, this postcard immediately became a fixture on our refrigerator and on our shopping calendar. By using a very simple piece of customer data (a customer's shoe size), Nordstrom Rack was able to build a targeted and compelling direct marketing campaign.

The Takeaway

You may be thinking that Nordstrom is a retail giant with vast marketing and analytical resources. That’s true, but executing this sort of direct marketing campaign is a lot easier than you might think. There are a variety of affordable tools out there that offer businesses a way to document and organize useful customer data for use in direct marketing campaigns.

Here is a simple approach to getting started:

1) Set realistic and clear goals

Improvement won't happen overnight. It takes time and practice to methodically improve the quality of your direct marketing campaigns. That improvement will, however, eventually lead to transformational business value in the form of more loyal customers who purchase more from your business.

2) Find an online customer relationship management (CRM) tool

A CRM tool offers the ability to capture, store and access a wealth of information about individual customers. From shoe size in the Nordstrom Rack example above to the number (and value) of purchases a customer makes each year, this type of tool tracks it all. CRM tools also quickly regurgitate customer data and enable you to easily analyze the needs and preferences of different customer groups. Popular online CRM tools include Highrise by 37 Signals and Salesforce.com. Do your research and determine the right feature set for your business because you'll definitely pay more for advanced functionality.

3) Integrate your CRM tool with your direct marketing tools

CRM tools also integrate with common customer communications tools –such as email and direct mail platforms –to put this information to use in growing your business. In order to maximize your CRM tool's benefits, you need to tie it into your ongoing direct marketing campaign tools. A CRM tool will take your various inputs and filters, and spit out a very specific list of customers. You can then use that list of customers to send highly targeted communications campaigns, such as the Nordstrom Rack example I mentioned above.

4) Measure and analyze what happens

As you probably know, direct marketing is all about measurement and refinement over time. If you're going to invest in CRM and direct marketing tools, then you need to measure how they help your business. You should see considerable improvement in the response to your direct marketing campaigns as you track toward your goals. If you don't see an improvement within a few campaigns, then you should step back and try to determine the underlying reason. You might find that your messages to specific customer groups need to be fine tuned or that your product is better suited to another, yet unidentified target audience.

These four steps will put you on the path toward transforming your direct marketing by better using your customer data.

Tell us

How are you currently using customer data to improve your business through direct marketing?

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