Every database marketing program begins with a rhetorical question that the marketer already knows the answer to: How good is the data?

The answer is usually, “Not good,” because many companies overlook the essential first step of Knowledge Discovery in Databases (KDD):

Step 1 Data Cleansing  

Also known as data hygiene—this process perpetually cleans and updates the data as part of the sales and billing process. Companies that overlook data cleansing, give it a low priority or sweep it under the rug soon find themselves with dirty data on their hands. But organizations that keep their data squeaky clean have the best chance of mining their data successfully because they can check off Step 1, and head right to:

Step 2 Data Integration

Sometimes, it’s desirable to combine more than one set of data—such as customers and prospects or leads that are in various stages of the demand waterfall. You may also want to aggregate prospects from more than one source, including both purchased and rented lists. Although there are several steps involved in data integration, the most important is de-duplicating the records. This can eliminate a tremendous amount of waste. But you must establish rules that define which source is preferred when duplicates are found.

Step 3—Data Selection

The data selection team needs to determine thresholds, limitations and other selection criteria. For example, if firmographic attributes are the most important criteria, then only the data models that meet the minimum threshold for annual income or revenue would be selected. If psychographic data matter more, then records might be selected for specific interests such as camping, concerts or social causes.

Step 4 Data Transformation

Once the best data has been selected, it must be transformed into a uniform set and optimized for use in a marketing program or campaign. All the fields must be consolidated, merged and purged so that they will be easy to index and use for data mining. If you’re using personalization in your campaign—and you should—this step is essential to ensure accuracy.

Step 5 Data Mining

This process is exacting, but in a nutshell, it involves searching the various fields of the database for specific attributes. These are then used to identify trends that can be matched against the predictive models that represent the marketer’s ideal prospects. The process is complete when the mined data resembles the data models. The Predictive Model Mark-up Language (PMML) developed by the Data Mining Group enables uniform data mining processes and techniques across vendors.

Step 6 Pattern Evaluation

The patterns that emerge during the data mining process must be evaluated to determine which are relevant to the model and which aren’t. If one of the new patterns contradicts the original persona, revisiting the model is a good idea. If the two are consistent, the model is validated.  Pattern evaluation can lead to the discovery of trends that might not have been apparent to the team that created the original model. And using the knowledge that is revealed can have a very positive effect on the entire program.

Step 7 Knowledge Presentation

The proof is in the pudding. Once the final data are selected, a report that explains why the chosen data are the best for the program is delivered. Everything that was learned during the data mining process—including trends, patterns, and anomalies—is included in the knowledge presentation to the user. The key is to present the findings in a clear, easy-to-digest format.

While this has been a brief and simplified description of data mining, the entire process—which involves a number of different algorithms—is actually quite complex. Classification algorithms that predict one or more discrete variables, regression algorithms that predict one or more continuous variables, segmentation, association, and sequence algorithms are all used. When practiced correctly, database marketing, data mining, and predictive modeling can all yield maximum ROI.

via Part II: Data Mining For Hidden Treasures—7 Steps of Knowledge Discovery in Databases | The Kern Organization.

Marguerite Gardiner, the Countess of Blessington, wrote Conversations with Lord Byron in 1834.” In describing the poet, she said “Genius is the gold in the mine; talent is the miner who works and brings it out.” Today, if we substitute the word “data” for the word “gold,” the statement still rings true.Like a gold mine, a data mine contains valuable nuggets that need to be extracted from the dross that surrounds it. And techniques for excavating these treasures are  constantly evolving. What we now call data collection and database creation was made possible in the 1960s by computers the size of small buildings. During the 1970s and 1980s, database management systems led to hierarchical database systems, and later, to relational database systems.  With the ability to index databases, database technology increased geometrically, and new theories and practices quickly spread around the world. Query languages, user interfaces, pre-fabricated forms and reports, transaction management, data recovery, and online transactional processing (OLTP) all came into play.  And by the time the Internet emerged in the early 1990s, database technology was a booming industry. Web-based systems thrived, and data and web mining became sophisticated disciplines. Relational technology made efficient storage, retrieval and management of large amounts of data possible. And advanced data models—including  extended-relational, object-oriented, object-relational, and deductive—enabled spatial, temporal, multi-media, active, scientific, knowledge, and office information databases to flourish. In some ways, technology outpaced practical application, and in many cases “data rich, information poor” companies had no idea what to do with the reams of data they had collected. These massive repositories of dormant data became known as “data tombs.” Data mining—also known as Knowledge Discovery in Databases (KDD) —is how smart marketers extract meaningful data from these tombs. In order to convert facts into knowledge, analysts look for patterns within the data, then identify and categorize them. Using this information, they create a predictive model that flags people who resemble current customers  in key ways.  This is a simplified explanation of what is actually a very complex process, but you get the gist. Several scientific organizations, most notably the Data Mining Group (DMG), have pooled resources in an effort to create a uniform method for data mining using the Predictive Model Markup Language, PMML.  IBM, Microsoft, SAP, Oracle, NCR, and most major computer and software companies are members of this group. Advanced data mining can reveal insights about customers, former customers, prospects, and leads.  When combined with purchasing patterns and behavior, the data can be used to drive sales, reduce churn, and support cross-sell and up-sell initiatives. There truly is gold in them there hills, if you know where and how to look.  In part two of this article, we’ll explore the seven steps in KDD:

1) Data Cleaning 2) Data Integration 3) Data Selection 4) Data Transformation 5) Data Mining 6) Pattern Evaluation 7) Knowledge Presentation

via Data Mining for Hidden Treasures | The Kern Organization.

The following is an excerpt from DirectMarketingIQ’s new report “Cracking the QR Code: The ultimate guide for using QR Codes, including current trends, Best Practices for implementation, marketing strategy, creative and measurement, and QR Code campaign samples.”)

“While some people see QR codes as a gimmick, we’ve seen it become a lasting technology in Asia over the last fifteen years,” says Keegan St. Onge-May, marketing manager for Indros Group and Easypurl.com. In the past six months alone, he’s seen marketers embracing the versatility of QR Codes, whether the codes are used to view personalized mobile landing pages, watch videos, view social media profiles or download coupons.

“A year ago, most people were just trying to figure out how to scan QR Codes, let alone implement them in marketing campaigns. And until every single person in the U.S. owns a smartphone, QR Codes still have a lot of room for growth,” asserts Onge-May.

Some marketers see the fact that smartphones have migrated from the business to the home as the key reason for more QR Code usage and success. “Although smartphones first became popular among business people, today many new buyers select them for personal use. Many people don’t leave home without them and view their smartphones as very personal devices,” says David Henkel , president of Johnson and Quin, a leader in targeted full-service direct mail printing. “Additionally, faster mobile web connectivity is growing, and mobile web search is becoming one of the most common uses for these devices.”

Indeed, perhaps QR Codes are that new bridge for consumers for offers, as they can be more personalized and relevant through mobile devices. “Right now, these devices are smarter than we are,” says Susan Kelly , vice president of communciation management services for Xerox. “How do I use a QR Code to really connect [for prospects] when they really want to know something? How can I connect it with my product, my service, and be able to leverage that? It’s very compelling.”

She says that QR Codes offer the opportunity to engage and connect with the brand-aware consumer. And by providing additional content in a new way, the marketer is making progress toward their principal goals: providing awareness and driving a specific conversion or call to action.

Kelly refers to the “digital media invasion” that completely altered the marketing landscape. The first sector includes certain media channels (direct mail, radio, newspaper, magazines) that had used analog technology but now have gone interactive. She says you can see that many of these are natural channels for QR code, as they can transform a one-dimensional direct mail piece into multimedia, online content with only the scan of a barcode.

“The second sector was born interactive, including mobile services, online media, online games, social media, new sectors and distribution channels,” she continues. “But you talk to customers and they don’t want just one or the other. They want both!”

Therefore, you must have strategies in place to make them more interactive, and QR Codes can play a vital role in this evolving integration.

Speaking of that evolution, the tablet is likely to only further QR Code usage for marketers. The front-facing cameras in the second generation of tablets such as iPad 2, Xoom and Tab allow some users, who may be reluctant to browse with the smartphone, to interact with mobile barcodes for the first time. Like the smartphone, tablets, will be able to interact with printed campaigns via QR Codes but with a much larger screen.

In other words, for web-enabled tablets, this represents a huge opportunity for the integration of print and web. Some marketers believe that the larger screen in essence allows QR Codes to reach their full potential by connecting people to products and brands through an improved user experience.

Ethan Boldt  is the Chief Content Officer of DirectMarketingIQ, research division of Target Marketing Group, and co-authored the new special report, “Cracking the QR Code.”

via QR code best practices for direct mailers, plus smartphone trends : DirectMarketingIQ.

In this article, you’ll learn…

• Seven timeless direct marketing principles to use
• How classic direct marketing can boost sales today

The following article is based on an excerpt from the e-book titled “Getting Response in a Down Economy: 4 Key Principles to Boost Your Direct Mail Profits in Today’s Difficult Market.”

If you create or manage direct mail programs, the current economy probably has you pulling your hair out. Over the last couple of years, it’s been crazy out there.

Budgets have shrunk. Response has been unpredictable. Costs have risen. And yet you need to make sales. What can you do?

First, take a deep breath, because the economy is beginning to improve. Second, don’t do anything rash. Though closing down your direct mail programs would be an overreaction, taking huge risks wouldn’t be the answer either.

Now is the perfect time to get back to basics and remind yourself of the following seven core principles of direct marketing.

1. Sell things people want

In general, direct marketing is not about creating markets, but about locating existing markets. It is a business-to-buyer avenue of selling that is streamlined, efficient, and profitable—but only when a market wants what you are offering.

For example, a few decades ago, only hardcore geeks would buy a computer via mail. Computers were neither understood nor wanted by the general public, but such purchases are now common because a wide market exists.

2. Don’t sell mere products, sell solutions to problems

No one cares about your widgets. What people care about are their own needs and wants.

Bob doesn’t want a drill; he wants a hole. Mary doesn’t want a dress; she wants to look thin at Friday’s party. Alice doesn’t want an investment newsletter; she wants to find a great investment that will let her retire at 45. Ted doesn’t want a recipe book; he wants new ways to impress friends at dinner parties and generate the compliments he thrives on.

3. Appeal to emotion first, reason second

Most direct marketers are number-crunching, logical people. It’s easy for us to fall into a cold, left-brain, bullet-pointed, 714-reasons-why type of sales pitch. However, people make decisions using right-brain thinking, based on emotion. Then they justify that decision with logic (i.e., rationalization).

To set up a sale, appeal to emotion first. To close and confirm a sale, use logic.

4. Use proven techniques

Although there is no set of universal techniques that applies to all circumstances, a few are nearly universal. According to Bob Stone, the guru of gurus in direct marketing…

A “yes/no” offer usually outpulls offers without a “no” option

A negative-option offer usually outpulls a positive-option offer

An offer with a time limit usually outpulls an offer with no time limit

An offer with a free gift usually outpulls discount offers (especially when the gift closely matches your prospect’s self-interest)

Sweepstakes usually increase order volume, especially for impulse items (though sweepstakes customers will not be loyal)

Benefits outpull features

The more involved you can get people, and the more they read, the greater your chance for success

Envelope packages usually outpull self-mailers

5. Value content over form

One of the primary reasons advertising fails is that ad creators too often get caught up in a creative vision but have nothing to say.

One agency has repeatedly sent me mockups of mailers and brochures with tiny blank spaces they want me to fill in with copy. When I ask about the purpose of the piece or point out that the design should be based on what needs to be communicated, I am gently told to just write something of the right length and everything will work out fine.

That is nonsense. Don’t start with a “look.” Start with content. Allow your design to develop naturally from your copy.

6. Make sure you’re doing direct marketing

Every direct marketing message includes three basic elements: an offer, enough information for immediate acceptance of the offer, and a mechanism for responding to the offer.

Without each of those elements, you are not doing direct marketing. You are merely using media associated with direct marketing.

7. Consider two-step sales

You have two basic ways to make a sale in direct marketing:

The single shot: You get an immediate order.

The two-step: You generate an inquiry, then attempt to convert that inquiry into sales.

If your product is expensive, complex, new, or hard to understand, or if it requires a major commitment of some kind, two-step sales may net you more profit in the long run.

* * *

I don’t know whether we’ll ever again see the glory of direct mail days gone by. But maybe that’s a good thing.

Maybe the market forces at work right now will encourage all of us to get back to direct mail basics, reminding us about how to be more effective and efficient.

Dean Rieck is a direct-mail copywriter and consultant, and publishes the popular Direct Creative Blog and ProCopyTips blog.

via Strategy – Seven Tips for More-Profitable Direct Mail in Today’s Economy : MarketingProfs Article.

The following is an excerpt from “The Art & Science of Multichannel Fundraising,” the new 131-page report from DirectMarketingIQ. It includes 9 chapters, from leading fundraisers, on channel selection, messaging, direct mail, email, mobile, social media, multichannel renewal, multichannel testing and more. It also features 8 multichannel case studies on successful campaigns.

There’s no “one size fits all” set of best practices when it comes to direct mail programs. So much depends on the size of your budget and what type of program you’re managing. Programs with heavy use of free gifts and premiums are wired very differently from those with few or no premium offers, for example.

That said, whether you have a really small direct mail program or a multimillion-dollar behemoth to manage, there are some things you should do regardless. Innovations in the tools and technology we use may give us new and better ways of fundraising, but human behavior is more of a constant and fairly predictable. Good marketing can always be counted on to move people to give and take action, and good donor care helps keep them with you.

So, How Are Your Manners?

It’s appalling how few organizations quickly acknowledge gifts or do it well. How long does it take you to cash a check? How long after that until you send a thank-you? Commit to getting your gift acknowledgment process down to days, not weeks. You have a limited window in which to tap in to your donors’ good feelings about making a gift, and the longer it takes you to thank them, the more you jeopardize getting another donation.

If you have a back-end premium offer, how long does it take you to get those items into your donors’ mailboxes? What can you do to speed up that process? If it takes you three months to fulfill your promise, by then the donors’ glittery good feelings about giving you their money are long gone.

Periodically, make sure your timeline remains realistic. Have people make donations and report in on their experience. You might be surprised at what you find. Retailers use “mystery shoppers” to monitor the quality of their customers’ experiences and you should do the equivalent. It’s a good way to discover where problems are in your program and gives you actionable information.

Acknowledge gifts sent by mail with mail. An email or text thank-you for online and mobile gifts is a no-brainer, but test the impact of following it up with a second appreciative expression of your thanks in the mail.

Go the distance for your high-dollar donors. Pick up the phone and call people who make large gifts to thank them, in addition to sending acknowledgments in the mail. One organization found that thank-you calls doubled subsequent giving for certain donor segments. If your direct mail program is so big you can’t manage thank-you calls in-house, contract a telemarketing firm.

You need to determine what dollar amount triggers a call, but it’s worth testing and should certainly be de rigueur for high-dollar donors.

Kimberly Seville  provides comprehensive freelance creative services from concept to execution for a range of fundraising agencies and nonprofit organizations. She can be reached at kimberlyseville@yahoo.com. She authored chapter three in the new report, “The Art & Science of Multichannel Fundraising,” published by DirectMarketingIQ.

A new report by Blackbaud’s Target Analytics, a global provider of software and services for nonprofit organizations, shows that direct mail remains the source of most charitable donations.

The 2011 donorCentrics Internet and Multichannel Giving Benchmarking Report features research on nonprofit online giving in the context of an integrated direct marketing program.  This year’s analysis covers 15.6 million donors and more than $1.16 billion dollars in revenue. Select findings:

Although multichannel giving has become a popular objective of not-for-profits as a way to build constituent support, it is not widely practiced, the study finds. The majority of gifts are received through direct mail.

The typical organization receives more than three-quarters of its total gifts through direct mail and only 10% of its gifts online.

Direct mail acquisition is also responsible for three-quarters of all new donors. Over the past several years, the number of donors acquired online has increased though, the study notes.  In 2010, 16% of new donors in the benchmark groups studied donated online. The authors note that the non-profits in this study have larger online programs than similar nonprofits. Percentages of gifts and donors coming in online are smaller for the industry as a whole.

The report found that large numbers of new donors acquired online switch to direct mail giving in subsequent years (eventually, just under half of all online-acquired donors convert entirely to offline, primarily direct mail giving).  The reverse is not true, however; only a tiny percentage of mail-acquired donors give online in later years.

In aggregate, online-acquired donors have much higher cumulative value over the long term than traditional mail-acquired donors. However, long-term value varies depending on the donor’s origin gift level, and the substantially higher gift amounts given by online-acquired donors can mask issues with retention.

“The Internet is becoming an increasingly important acquisition channel but has not proven to be as effective for retention,” said Rob Harris, Target Analytics’ director of analytic products and a co-author of the study. “It is the ability of online-acquired donors to use another channel – that is, to start giving through direct mail – that significantly boosts the long-term value of this group of donors.”

About:  The report data comes from the most recent transactional data available for the 28 organizations includes transactions for over 15 million donors and more than $1 billion in revenue.   The organizations participating are prominent national nonprofits covering a range of sectors, including animal welfare, the environment, health, human services, international relief, and societal benefit.

Source:  Blackbaud, 2011 donorCentrics Internet and Multichannel Giving Benchmarking Report, accessed June 2, 2011 and AdvisorOne, Web Is Good at Acquiring Donors, Not Retaining Them, June 1, 2011.

via Print in the Mix: Fast Fact – Direct Mail Drives Charitable Donations and Retention.

Direct mail, 2010—myths and trends.

In these times of new channels and changing communication preferences, it’s important to point out a few misperceptions of direct mail that persist among many.

Myth 1:  Forests are being destroyed to produce catalogs and mailers. Readers of Ed #13 know that in the United States and increasingly worldwide, trees are a truly renewable resource. In fact, thanks to sustainable forestry practices, the amount of U.S. forestland has actually increased over the years. There are more forests in the United States today than 50 years ago and roughly the same acreage as 100 years ago7.

Myth 2: Catalogs and direct mail are difficult to recycle. In 2007, direct marketers received approval to include “recycle please” graphics on catalogs and mail pieces. Discarded catalogs, classified as “old magazines,” are valued for their long, strong fiber content and are used widely for recycled content in office paper and newsprint. NewPage uses old magazines to make deinked pulp for groundwood paper used in new magazines and catalogs.

81% of American households open direct mail. 

Myth 3: Americans throw away most of the direct mail they receive, unopened. A 2006 USPS Household Diary Study8 found that only 16 percent of American households choose not to open direct mail. The vast majority, 81 percent, open and read or at least glance through the direct mail they receive.

Okay, that gets the myths out of the way. Here are some interesting trends:

A USADATA Special Report9 reflects increased sophistication and technological advances in data mining. Data enhancement is growing, with the addition of deeper demographic information, including age, gender, marital status and lifestyle interests, as well as ethnic background. The result is more detailed data that supports more precise targeting.

Even saturation lists—also known as “occupant” lists—are becoming more targeted. Traditionally used by companies to cover entire cities, counties or zip codes at a reduced rate, this approach now has new selection options that include median home value and household income, or can be focused on specific carrier routes.

The USADATA report also found that companies are increasingly integrating direct mail into other forms of marketing, particularly Web-based—such as a printed marketing piece that provides a personalized Web address (PURL) designed to deliver targeted information.

DMNews points to improved print and production technology as another force in the direct mail environment. The shift to digital printing represents a major change in the production of direct mail campaigns, providing greater flexibility and customization, faster turnaround, less waste and reduced inventory, which reduces both cost and environmental impact.

via Direct mail, 2010—myths and trends. – Ed #14 Getting Personal – Ed Lives Here.