CCG - When Data Warehousing Isn’ In the Budget

excerpted from
StrateScapes – Volume 3, Number 1

When Data Warehousing Isn’t In the Budget
Integrating customer information from totally separate, disjointed computer systems is still an unrealistic ideal for many companies. That’s why many companies are turning to data marts and data appending as alternatives.

This article is a supplement to Data Gets Personal in StrateScapes, Vol. 3, No. 1, the journal on the art and science of relationship marketing.

Data marts typically require smaller amounts of data, simpler data models and less time to implement than data warehouses. This means you can tackle the project in manageable chunks based on your highest-priority marketing objectives. Data marts offer a flexible, scalable and relatively low-cost solution that can later be integrated into a full-scale data warehouse system.

Data appending is the process of matching your customer database records to data developed by an outside company to expand on what you already know. This gives you a clearer picture of who your customers are while avoiding the costly and time-consuming process of gathering that additional data on your own.

The most common types of appendable data are:

Geodemographic information – Categorizing individuals or households based on ZIP code and other geographic and demographic criteria.

Lifestyle information – Coding customer records based on their unique interests and preferences as well as their demographic profiles. Depending on the source, lifestyle data can is either inferred or based on "self-reported" information gathered from customer surveys.

While either type of data can help you to target your marketing campaigns more accurately (depending on what types of information you already have on your customers), self-reported lifestyle information offers two unique advantages: 1) it’s based on actual responses from real consumers; and 2) it avoids the generalizations that can skew geodemographic data.

“Geodemographic data is based on the idea that birds of a feather flock together,” says Bill Schneider, CCG Senior Data Analyst and principal of the data analysis and consulting company IntelliStats. “But when it comes to values, interests and preferences, each man is an island. With lifestyle data, you get a more accurate reflection of that fact.”

Keep in mind that typically you rent appended data for a specified period of time. You’ll sign an agreement requiring you to either relicense that data or purge it from your database when the time is up. “Companies that recognize the value of their appended data actively use it to strengthen customer relationships – and opt to relicense that data,” says Lane Ware, CCG Senior Vice President of Strategic Consulting. “After the time limit is up, the data generally begins to grow outdated anyway.”

STRATESCAPES and STRATESCAPES SUPPLEMENTS are published by Customer Communications Group, Inc., a full-service agency specializing in relationship marketing and customer communications. Our comprehensive, turnkey services include data analysis, customer segmentation, strategic consulting, account management, creative execution, print production and multimedia solutions.