Case Study: Database Builds Loyalty for Casino

Today's direct marketing case study comes to us from Equifax. Since we enjoy reading about how technology (in this case a marketing database) impacts overall performance, we thought we'd share. For those who are grappling with the decision as to whether to build your marketing database in-house, or use a service bureau, you should continue reading.

Client Profile
A leading gaming and entertainment company, operating riverboat and hotel casino complexes across the U.S.

Challenge
To increase customer loyalty and drive repeat visits to their casinos, the client targeted direct marketing programs to their existing customers. They were using their operational database and very basic tools to generate direct marketing programs. To enhance campaign effectiveness, they wanted to conduct more testing and better target their direct mail and e-mail campaigns, but did not have the infrastructure to address the challenge.

Solution
The client engaged Equifax to conduct a requirements and feasibility study. Their goal was to build an in-house database solution, versus a service provider solution. The feasibility study was a collaborative effort with the client's IT. Equifax built a comprehensive test database parallel to the client's current system--with the added challenge of a changing operations system.

Equifax delivered a database solution that exceeded the client's expectations. The project that began with a feasibility study evolved into a comprehensive service that provides a "single view" of the customer across several properties. The service includes daily updates of customer, transactional, demographic, hotel and promotion history data into an open relational database utilizing best-of-breed business intelligence and campaign management tools. The solution supports daily, trigger-based, multi-channel campaign executions, enabling more convenient, relevant offers to patrons. The client's solution has expanded to include data mining and analysis, using predictive analytics and modeling tools and techniques to enrich their direct and e-mail marketing strategies.

Results
Equifax delivered a powerful marketing database solution, on-time and on-budget. The solution provides direct marketing expertise and support comparable to a more costly, yet less effective in-house solution. In addition, the database features a Quality Control element that ensures the clients meets industry regulatory requirements. The flexible, robust infrastructure facilitates a more "enabling environment." As a result, the client is experiencing greater success in marketing across all segments of the business.

• Average spend per customer increased 20%. More timely and better matched offers to patrons--with emphasis on event-triggered opportunities--has increased patron's visits and play, resulting in a more satisfied customer base and better ROI for the client.
• Dramatically shortened timelines enable the client to deliver more frequent mailings to patrons. Direct mail campaigns that used to take two days per property to execute now take two to three days for all six properties.
• Through increased efficiency, the client can quickly, aggressively pursue multiple marketing tactics simultaneously. In addition, the marketing team can "put good direct marketing strategies to work."
• Improved, timely business reporting allows the client to apply key learning for the implementation of more effective marketing strategies.

Equifax has proven to be a valuable resource in this client's quest to optimize customer relationships. As a database provider, Equifax has helped the client learn more about their customers in order to increase their visits, build loyalty and, ultimately, boost revenue.

Spotlight On: Epsilon

Welcome to another edition of our "Spotlight On" series, where each month we focus on an industry-leading provider to the direct marketing industry. Additionally, we highlight those companies who not only bring us great DM solutions, but also perform exceptionally in the customer service arena. We hope that these monthly posts are helping you, our faithful readers, when you go about the business of choosing partners and vendors to work with.

Today, our spotlight is on Epsilon. We’re especially pleased with this month's Spotlight because it gave us the opportunity to chat with Ron Shevlin, Epsilon’s Vice President of Client Solutions. You may also recognize Ron as a fellow blogger, whose fascinating Marketing Whims blog we follow religiously.

In our conversation with him, Ron shared some great information about his company and, in addition, his vision for the future of the database industry.

First off, here’s a bit of background on Epsilon. We know Epsilon through our database consulting work (where we help clients choose the right technologies and database partners). Epsilon is always included on the short-list of database suppliers. But, they don’t only dabble in database. Here’s a list of other capabilities, from their website:

• Unique, original data sources
• Custom database solutions
• Leading loyalty solutions
• Data hygiene and integration
• Multi-channel campaign distribution & management
• Targeted email and direct marketing
• Award-winning creative & strategic consulting

We asked Ron what he believed was the primary differentiator between Epsilon and its competitors. Ron stated that Epsilon is an expert in driving efficiencies and reducing cycle time. He cited an example of this with the work that they’re doing for the a top five bank here in the US. They’ve built an analytic data warehouse that integrates customer data and analytics across all of the firm’s business units. This data warehouse allows them to execute campaigns in a timely fashion. More importantly, it enables response analysis which allows the bank to apply learnings to subsequent campaigns. And, what’s most important of all is that all of this happens quickly—the true differentiator.

Another example Ron cited was their technology product, called SONAR. SONAR enables multi-channel and cross-channel marketing, by providing middleware that ties customer touchpoints together. For example, websites and call centers are tied into the customer database so that, for example, in real-time, the most pertinent offer can be presented to that customer. This technology, which facilitates cross-channel integration is being used successfully today by high profile firms such as Schwab and Hilton.

Ron talked about how historically Epsilon has specialized in building customer databases. Now, the firm is focusing on operationalizing the database. Their focus is on allowing firms the ability to “use data at the point of customer interaction.”

They’re also serious about high-quality company acquisitions. They make it a point to only acquire “best-in-class” firms. This commitment to quality is demonstrated by their recent acquisitions of Big Foot (interactive marketing), CPC Associates (new movers and other data), Abacus (the leading catalog co-op database firm) and Alliance Data Systems (specializing in retail marketing services).

In regards to their client mix, Ron does not see Epsilon moving away from their focus on large organizations, where their mix of technology, analytics expertise and database marketing knowledge is especially important. Epsilon has a strong foot-hold in the financial services sector, but with recent acquisitions (namely Abacus and Alliance), they’re industry leaders in the retail and catalog spaces, too.

Competitive Threats

Our discussion then branched off to some of the looming trends in the database marketing industry. Ron told us that in regards to competitive threats, he’s not worried as much about traditional database competitors such as Acxiom and Experian. Instead, the trend that worries him more is that more firms that are taking their database “in-house, using consultants such as IBM and Accenture.” He qualified this by stating that these firms may be well-versed in technology, but that they don’t necessarily provide long-term operational support. As we all know, this can quickly spell disaster when a company is left with technology that they may not be able to use or fully operationalize.

Another trend Ron sees for our future is offshore work—outsourcing programming, analytics and other technical functions to lower cost alternatives in India and China. One way to combat this threat, Ron believes, is to focus on Epsilon’s strengths—and that is their top-notch customer service. Ron gave us an example of Epsilon’s commitment to the customer—for large database sales, the team that comes into a firm and makes the sale is the same team that executes. Therefore, the client can rest-assured that they’ll get the support and commitment that they deserve from the Epsilon people that best understand their business needs and challenges.

Our take on Epsilon—while they are an established database provider to the direct marketing industry, they are forward thinking with their emphasis on real-time integration of multi-channels. They remain technology leaders and are committed to the customer. What more can we ask in a vendor partner?

Do-It-Yourself Database

Just the other night I dreamed that I purchased a book called "HTML for Dummies" (not sure that this title even exists) in the hopes that I could take over our company's website updating. Even in my dreams I'm sick of relying on someone else to make minor updates, add newsletters, whitepapers, etc. I want to do it myself.

Then, today, I read this recap of a speech given by Donald Feinberg, a Gartner analyst who spoke at the Teradata Partner conference. The article from "IT Business" states: "The relationship between IT and business is changing says a Gartner analyst, and IT must follow business' lead." It goes on to relate how business is no longer willing to accept whatever database their IT group provides to them.

The point of the speech was to encourage IT people and others responsible for database design to think about rebuilding database systems to accommodate changing business needs. "Speaking at Partners, the annual user conference of data warehousing vendor Teradata, Donald Feinberg said companies need to start paying closer attention to their data warehouses. Feinberg, a vice-president and distinguished analyst with the research firm, said if your data warehouse is more than 10 years old it's going to need to be replaced to empower today's workforce."

He went on to warn his audience of DBAs and IT folk that if they weren't proactive in meeting business needs, the business users will simply build tools themselves. With ever-increasing tools that the average business-person can easily use and understand, it's easier than ever to take control, as opposed to waiting on IT. "There was a time IT could give any old program to the business side and they'd have to use it, but not anymore. Noting Excel 2007 allows one million rows, he said people can get by without a database, and can even run SAS analytics against Excel spreadsheets."

And, with the fact that young adults entering the workforce are technology-proficient and used to figuring out how to make a computer do what they need it to do, this 'do-it-yourself', can-do attitude is a trend that will only continue to grow.

As a self-proclaimed control-freak, I'm all for this movement! I've worked on so many projects that were derailed simply because we had to rely on IT to pull data. When we finally did get the data, it was out-of-date or suspect. It would be nirvana to be able to grab control, and get easy access to customer data. Think of the quick and dirty analysis that could be performed. Ah, the customer insight that could be gained! And, all without any IT request or intervention. Wow!

Of course, this scenario may not be realistic for super large organizations that maintain highly sensitive data, and lots of it (like a large financial institution). But, I'm liking this trend. Anything that gets data closer to the business user is a good thing.

Customer Experience Management for the Romantically-Inclined

It's fun to see how we, as direct marketers, can impact all kinds of customer experiences. Often-times, we think of our direct marketing efforts as impacting the customer experience of car buyers, loan appliers, catalog shoppers, and the like. However, in a recent article by Earth Times, managing the customer experience for those in search of ultimate romance can be impacted by database marketing tools. Who would have thunk it?

eHarmony has recently entered into a relationship with Tealeaf (who touts itself as the leader in online customer experience management). You have probably seen the eHarmony commercials on TV that show lots of smiling, kissing, and overall happy couples who have met their true soul-mate at the relationship service website. In fact, "on an average day, more than 90 eHarmony members marry as a result of being matched on the site (Harris Interactive, 2005)."

The article goes on to state that "as eHarmony has grown, the company has sought out the most advanced technologies in order to provide an optimum user experience for its members." Hence, their speedy growth.

In fact, Tealeaf VP of Marketing, Geoff Galat, puts it all into perspective. Galat states that through their Tealeaf CX Solution, they enable eHarmony to "optimize its members' experiences, ensuring an exciting journey toward finding true love, and creating a more profitable venture for company stakeholders." So, there you have it . . . romance and profitability.

So, as a group, we direct marketers should be proud -- not only can we help our clients build more profitable customer relationships, but our techniques and theories can actually make love blossom!

Direct Marketing Industry Continues to Grow Globally

In an interesting article today from Business Wire, it is reported that the Direct Marketing industry continues to grow, year-over-year, at an accelerated pace (over 15% in 2005 -- still calculating actual numbers for 2006).

This news bodes well for all of us Direct Marketers -- and the even better news is that with the expanding customer acceptance of receiving direct marketing messages from different sources/channels, this upward trend will most definitely continue.

While telemarketing and direct mail still are the bread-and-butter for most direct marketing campaigns, this article reports that "there is increasing spend in the channels that are able to deliver much more detailed customer data, which allows for more highly targeted, highly responsive campaigns. Many organizations have also invested in customer relationship management (CRM) software applications, which allow them to collect more detailed customer information."

Finally, the article points out the focus on database and data-management solutions. Utilizing smart database marketing and customer data integration practices will allow companies to build very detailed customer databases -- and more effectively track their customer relationships. It is in these areas that direct marketing will continue to deliver the kind of return on investment that is needed in today's highly competitive economic environment.

To review our white paper and some ideas on how to implement effective database and customer data integration tools into your business, please visit our website.

How to Mitigate Postal -- and other DM Costs

There has been a lot of talk recently about the new postal increase, and those increases planned for the future. Many direct marketers are talking about how they may have to decrease their direct mailing campaigns -- particularly to their prospect universes -- so that they do not blow their DM budgets. We reply to that logic with a heart-felt, "No Way, People!"

The key to dealing with these types of increases is by marketing smarter. Utilizing intelligent direct marketing tools such as analytics and database tools, you can market to those prospects most likely to respond to your offers, and weed out those who likely will not. As Direct Marketers, we have a plethora of tools available at our fingertips. While most do require some upfront costs, they will definitely save you money upon implementation. Mailing costs are just one of the costs that will be postively impacted. When you start to factor in costs of printing, piece-development, etc., you can quickly see how the utilization of these tools can help you meet -- and exceed-- your budgetary objectives.

Just a little food for thought as you are planning your direct marketing strategy.