CUSTOMER DATA: Clean up your digital data act
Firms that keep their databases up to date can boost customer profiling and offer them what they want, reports Holly Acland.
There's nothing like the story of a company mailing someone after they have died and causing distress to their grieving relatives to whip up the press into a frenzy of indignation. Take Scottish Widows, which found itself in the news a couple of years ago after inadvertently mailing around 100 deceased policyholders offering them health cover. But it's not just firms with big postal databases that run the risk of getting on the wrong side of customers. As email and SMS data are added to the melting pot, these channels are just as likely to attract unwanted attention.
Personal injury firm Accident Group attracted negative publicity after it told staff they were sacked by text. And Sainsbury's was forced to apologise after its SMS recruitment drive for a new store backfired. The text began with the provocative sentence "I want you, I need you, I can't get enough of you", but one recipient didn't see the funny side and the campaign was quickly axed. Both show how the mobile channel can be used inappropriately, but the much greater challenge, requiring constant vigilance, is maintaining the accuracy of a digital database.
In the offline world, there are a multitude of products to help companies keep their databases up to date. Suppression files enable them to knock people off their databases when they've moved house, died or registered with a preference service, such as the Mailing Preference Service. Database bureaux have much experience of hosting databases on behalf of firms and quality is a top priority. In short, there's no excuse for dirty data.
However, in the online world, where email and SMS data-bases are being amassed at a growing rate, there are a host of issues that make digital database management a lot trickier. For a start, while people have only one home address, they are increasingly likely to have multiple email addresses. "I've got at least three, which I use on a regular basis," says Peter Foster, data consultant at data services company GB Group.
"I have my work email, my paid-for ISP address for social purposes, and at least one Hotmail account that I use if I'm buying online from a company I've never dealt with before and am dubious about how they're going to use my address." Taking his own situation as fairly typical, Foster says this makes it "very hard to maintain a clean and accurate email address list".
This challenge is thrown into sharp relief when it comes to dealing with opt-outs. If a customer unsubscribes from receiving travel offers through their work email address, for example, the last thing they'll want to find when they turn on their home computer is the latest bargain flight to Budapest from the same company. Frustration will mount, as well as a sense of powerlessness, that their inbox is out of their control.
"The problem in the digital age is that the stakes are up all round in terms of response time. The consumer expects more," says digital consultant Steve Hanney, former European head of direct and digital marketing at music giant BMG. "If they opt out, they expect it to be done that very second, while they're likely to accept a lag time if they unsubscribe to direct mail."
Unfortunately, companies are increasingly presented with the problem of how to act on a customer's opt-out request across several email addresses, rather than simply the one they unsubscribed from. The latter is a straightforward, automated process, which can be done in real time. The former is more complex because the initial 'unsubscribe' email address has to be de-duped against any other addresses on the database relating to that person. The easiest way is to record a customer's postal address alongside their email addresses, so they can be found just by entering the user's home address.
"You need a postal address before you can do any de-duplications," points out Martin Kiersnowski, chief operating officer of IPT, which gathers email and postal data via different online mechanisms. "When we started we only had email addresses, but we quickly realised that we needed postal data, so we started to ask for it at the point of registration."
As a rule, any company collecting digital data should also ask for offline data, including postal and, if possible, telephone details. This is important, not just for de-duplication, but to profile the customer base. An email address or phone number on its own shows little about a customer base, but matched against postcode data there are plenty of postcode-profiling tools that will categorise customers into different types of varying value.
In today's multi-channel environment, just holding data on one communication channel is of limited value. Companies need a single repository of contact information that includes customers' postal, phone, email and mobile data, as well as their channel preferences. This way, companies can integrate their marketing activity across different channels rather than running an email or mobile campaign in isolation. According to IPT's Kiersnowski, email kickers that give customers advance warning of a direct-mail campaign can boost postal response rates. "This is also the case for email reminders, which reiterate an offer after the mailing has dropped," he adds.
Email or mobile databases should not be separate entities but be incorporated into the offline database, providing that much vaunted 'single customer view'. Companies can use their own in-house capability to bring disparate databases together or outsource it to a data specialist. "It's not rocket science," says Stephen Ducker, director of business intelligence at data consultancy Dataforce. "You just have to make sure your contact history information, inbound or outbound, is stored in one place. It's very easy to set up." He adds that Dataforce has done just that for Heinz and Greenpeace.
Once set up, this multi-channel database enables a company to make contact through another route if an email address becomes invalid. Email data decays much faster than offline data, simply because people are likely to change their job or ISP, perhaps to take advantage of a different offer, more often than they will move house. At Egg, for example, any hard email bounce-backs are followed up by a postal communication reminding customers to update their contact details, comments UK sales and customer management director Richard Cole. "When people call us, we also check that we have their correct email address. That's just good customer service," he adds.
Companies should take advantage of every point of contact with consumers to check that data is correct and plug any gaps. Tactical campaigns can also be used specifically for data gathering, says Chris Duncan, managing director of data services provider Alchemetics. "If you're FHM magazine, you could run a competition to your SMS database, inviting people to text their email address to win a free subscription to the magazine. Over time you will want all contact details for all channels, with information on who is responsive to which channel."
But, if that's some way off, at the very least the email or mobile data captured at the point of collection needs to be as accurate as possible and companies are becoming increasingly adept at ensuring that this is the case. It is now standard for web sites to request that email addresses are submitted twice to reduce the chance of an input error, and the format of addresses can be checked using validation software. Others send an email as soon as a customer has submitted their data online, asking them to click on a link to confirm that it is correct. This double verification process may seem a bit laboured, but few customers are going to complain about the fact that accuracy is being taken so seriously.
Accuracy is also directly related to the value that customers attach to handing over their email address. "If they are giving their email address in order to receive something they genuinely want, you can be sure that the accuracy will be high. If it is viewed as incidental, accuracy drops right off," Duncan reveals.
It is therefore worth making it very clear at the point of data capture how the customer will benefit from submitting their email address. If there is no perceived benefit, this will be expressed through made-up addresses and a database that could be more trouble than it's worth.
One advantage of digital over offline is that the data owner will know within minutes of sending out a campaign if the data is accurate. "Dead email and dead SMS addresses are flagged up immediately because of the feedback you get from the ISPs or network provider. There's complete transparency," explains Nick McConnell, sales and marketing director at marketing communications firm Broadsystem. "The bounce message will tell you if there's a temporary hold-up because of a problem with the server, for example, or if the email address is dead."
The other benefit of digital is that no offence is caused to recipients because the message will never reach their inbox or mobile but ping straight back to the sender. In the offline world, an inaccurate mailing destined for a call centre's disgruntled Mrs Moody Cow, for example, will still reach the recipient and cause offence, not to mention any of those headline-grabbing news stories. Additionally, the suppression products so prevalent in the offline world are less applicable in the digital space. Someone's email address or mobile number is very personal to them, so, if they die, a company is unlikely to cause offence if they continue sending messages, unlike the more public space of the doormat. And, if someone moves house, their email address and mobile number will move with them, unchanged.
Mobile numbers, in particular, are likely to remain constant, particularly among the younger audience. As Abigail Taylor, interactive services manager at Chrysalis Radio, points out: "For a lot of people, the idea of changing their mobile number is quite life changing. They find it much easier to take their number with them if they change networks."
But it's not all good news. One problem that offline direct mailers don't have to contend with (short of the posties going on strike) is the fact that the distribution channel can be swiftly cut off. The increasing prevalence of spam, which is estimated to have made up 56 per cent of all internet email last year, means that ISPs are being extra vigilant about distinguishing between legitimate commercial email and junk email.
According to Justin Anderson, managing director of Frontwire and chairman of the DMA Email Marketing Best Practice Hub, this is an added incentive for keeping email address data clean. "High bounce-back levels indicate to an ISP that the organisation is not really keeping its data in order.
It is less likely to have good-quality opt-in lists, and they can now use the new legislation (which legalises opt-in for prospecting) to back up their argument," he points out.
If an ISP deems an email campaign to be spam, it can refuse to send it, causing legitimate emailers a serious problem. "Building relationships with ISPs is very, very important," points out IPT's Kiersnowski, whose company sends up to 50 email campaigns a week on behalf of clients. "It's something we strive to do and some are more difficult than others. The very least you can do is respond instantly to a complaint. If you don't, you can get black-holed (no email from that company is transmitted until it is lifted). I've known big brands to be black-holed for three or four days."
The fear or being black-holed, either by the ISP or by anti-spam software (which often uses deliverability rates as one of the criteria for identifying spam), has provided a shot in the arm for companies that may have been sloppy about their data quality. This temptation is much greater in the digital space, simply because the delivery costs are so much less.
"As emails cost so little to send, you don't have the same incentive to clean the data. If a mail-pack costs £1 a pack, you won't want any wastage. If it's 1p, it can be another matter," comments Anderson.
The speed and ease of accessing an email database can also make it easy to plunder. For this reason, Steve Hanney says that responsible database management should include appointing a data guardian. "If you have multiple users of a database in the same company, you need to have some business rules in place to ensure it isn't milked dry. Ideally, one person should oversee all this," he says.
This is exactly what happens at John Lewis, where a single customer database spans all the John Lewis and Waitrose stores, as well as their respective online businesses. "A central group is responsible for managing that database on behalf of the entire business," comments Simon Palethorpe, managing director of John Lewis Direct. "We have very strict rules about how many times a year a customer group can be contacted and, if anything, we err on the side of caution."
In an increasingly legislated and consumer-empowered society, when it comes to database management, taking a cautious approach is probably very good advice indeed.
CHRYSALIS RADIO attracts users to loyalty clubs via SMS
Chrysalis Radio has a well-established SMS strategy across its Heart and Galaxy-branded stations. It first started using SMS in 2001 and hasn't looked back.
There are now two loyalty clubs: Heart Texters, launched in November 2002, and Galaxy's Text Maniac Club. Between them, they have almost 100,000 registered users, who benefit from on- and off-air promotions.
Managing the database is relatively simple, says Pamir Gelenbe, director of corporate business development at mobile-marketing specialist Flytxt, which has worked with Chrysalis since June 2001. "The mobile networks send you automated delivery confirmation receipts, so you know if a phone is switched off or if the number no longer exists," he says. "This means you can keep the database clean in real time."
Chrysalis is careful not to blitz members with too many offers or repeatedly invite them to join. When listeners answer an on-air SMS promo, the software flags up if they belong to the loyalty club. If not, they're sent a text inviting them to join. "But we won't bombard them," says Abigail Taylor, interactive services manager at Chrysalis Radio. "If they say no, you don't want to keep pestering. You also have to make people aware of opting out and we do that on air, on our site, on the texts and on our marketing material too," adds Taylor.
DIRECT WINES adds personal touch to customer contact
Direct Wines is something of an expert when it comes to running clubs, operating the Sunday Times Wine Club and the Laithwaites brand, as well as clubs for the likes of HSBC and American Express.
In the last year it has taken an increasingly multi-channel marketing approach and now has a database of some 600,000 email addresses for the Sunday Times and Laithwaites brands. Digital marketing firm Frontwire hosts the database, analyses response data and carries out email campaigns.
A top priority, says Frontwire managing director Justin Anderson, is being very clear about why data is collected. "One of the things the Information Commissioner has made clear is the issue of transparency. You have to be very clear about what's happening with data."
When making an order online or by phone, users are asked for permission to email them. Importantly, this is a positive opt-in process. The opt-out procedure is included on every email and unsubscribers are stored in a separate suppression file.
"It isn't sufficient to simply delete the person from the database. You have to hold a record," explains Anderson. "If we deleted the record, there could be someone in the sales department, say, with an excel spreadsheet of customers they're hanging on to and planning to use. If we don't have a record of who has unsubscribed, we wouldn't know whether to take them off this database."
There are huge dividends to be had from managing an email database well in terms of profiling and targeting. For each message sent on behalf of Direct Wines, Frontwire receives back information on how the user has interacted with the communication - images they downloaded, whether they clicked through to the web site and if they bought anything.
Direct Wines uses the data to create personalised emails with images and offers based on previous buying patterns.
WORST CASE SCENARIO
Silo mentality - Lack of co-ordination in marketing departments could result in consumers receiving direct mail, email and a phone call from the same company simply because a) there are three databases, b) data is not reviewed and de-duplicated. Check the integrity of the data. As a bare minimum, de-duplicate by name and use other attributes that will tighten data quality.
Timing and relevance - Emailing users three days after they've made a purchase with a discount deal can provoke buyers' remorse and jeopardise any hope of developing loyalty and repeat business. Ensure your systems can work in real-time with regular synchronisation to update a prospect to a customer and then update them with the most recent order/enquiry.
Do they really know you? - Many consumers enquire online, but buy offline. Thereon, the online relationship treats you as a prospect while offline you're a valued customer. To stop this happening, make sure your online and offline databases are fully integrated.
Do you have permission? - Where in the past spam was considered unavoidable, firms that continue to send unsolicited email face prosecution and fines. Opt-in is now enshrined in law, so stick to this policy.
Is it legal? - Many under-16s have email addresses and easy access to the internet. But, as with emailing those who have not expressed an interest in your offering, it is illegal to deliberately target this specific group.
Provided by Broadsystem.
This article was first published on marketingmagazine.co.uk