MGI Tipster Volume 1, Issue 9

Do you know…how database marketing, contact management, data warehousing, and CRM work and what they do?


They’re all proven methods and techniques to increase engagement between associations and the communities they serve. They are designed to improve the number and quality of contacts, increase customer loyalty, and give the greatest return on an association’s communications investment.

Tip: Transaction knowledge—RFM or Recency, Frequency, and Monetary value—is the most basic of contact models. Customer Relationship Management—CRM—is the most sophisticated, feeding knowledge to member management, retention, promotion, and marketing.

HOW WE CONNECTED THROUGH THE AGES

Only decades ago people connected one-on-one, in person, and face-to-face. With the introduction of mass media—newspapers and particularly radio and television—people were more often connected not as individuals but as one among the masses. Communications became less personal, more onesize- fits-all. That worked until something better came along. With the exponential growth of computing power and the development of electronic databases, communications came full circle. It was possible to personalize again. The “corner grocer” analogy is apropos. It used to be that the grocer knew you by name, what you liked and disliked, and even your birthday. In the age of supermarkets, the selection was much greater, but few grocers knew you…or cared about your preferences. Now we’re in the age of specialty stores where you can pick and choose according to your preferences and, if the shopkeeper is smart, where you’re likely to be known by name.

Tip: Times have changed and today one thing holds true: good marketing should be designed to be personal, from one person to another.

INFORMATION VS. KNOWLEDGE, “USEFUL” INFORMATION, AND THE DATA WAREHOUSE

Simply put, database marketing is the collection and organization of raw data into useful information to improve and increase engagement. To be considered “useful,” information must be measurable, testable, and applicable, as well as cost-effective. To make information useful, information must be organized so it supports decision-making. Since the amount of electronic data worldwide is said to be doubling every 18 months, it’s crucial to be selective. That’s where data warehouses are important: places to store data where it can feed decision support systems that convert data into useful information.

Tip: It takes research and planning to decide what data is truly useful for each particular application before systems are put in place to improve engagement.

INCREASING ENGAGEMENT AND INTERACTION WITH MEMBERS IS A KEY TO SUCCESS

Many associations use database marketing in some form or another to increase engagement with current members, prospective members, customers, and potential customers. It helps them communicate with members one-on-one and personalize their messaging in an efficient, manageable way. It also enables them to identify the “best”members and treat them accordingly and to profile prospects most likely to join and target them for membership. Whether it is called Database Management, Customer Retention Management, or Relationship Marketing, it’s more and more crucial that decision support systems be put in place to optimize the transfer of information to useful knowledge in the most efficient and effective ways.

Tip: Engagement is more than a database; it’s also organization-wide service excellence so everyone involved is aware that strong relationships and service excellence go hand-in-hand.

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