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Marketing Trends: Data Marketing

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Posted September 10, 2001 By Staff     Feedback

Dig out hidden relationships in your customers' purchasing habits.

by Daniel Muggeo

To the consumer, technology represents another opportunity for aggressive marketers to invade their privacy. Those dinnertime phone calls from rude insurance people immediately come to mind.

But to the company marketing products and services, technology is providing new ways to reach sales objectives.

Data mining is a powerful intuitive technology that finds hidden predictive patterns in seemingly unrelated data. By finding hidden relationships in a customer's past purchasing habits, for example, data mining enables companies to better understand their customer's wants and needs, and to react to them in record time. This ability to anticipate a customer's needs enables companies to take Customer Relationship Management (CRM) to an entirely new level.

The key, however, is to gain the confidence of the consumer so that marketing messages are welcome, not scorned. This is where marketers must understand the concept of relevance and provide only pertinent messages that make sense to the individual user. By keeping messages targeted, customized and relevant, marketers will avoid bombarding consumers with unwanted, annoying solicitations.

Consider the following five marketing applications. Some are already being used and some are right around the corner, but they all utilize data mining technology that opens up possibilities to a closer relationship with the consumer than ever before imagined.

Interactive TV (ITV). Interactive TV enables companies to target specific commercials to entire households and the individuals within. Using detailed purchasing information provided by data mining technology, marketers can place advertisements within a show targeted to each viewer's tastes. A single woman in one household watching "Friends" could receive an ad for perfume, whereas a married couple with a baby watching the same program might see a diaper commercial instead. Interactive TV is a powerful tool for companies to showcase their products to a consumer who has already indicated an interest in similar, competitive products.

The Web. Technology utilizing Interstitials allows marketers to target consumers on a very personal level via their web browser. Interstitials are windows that pop up in between two web sites, delivering everything from a static advertisement to a full-fledged streaming media commercial up to 30 seconds in length. Superstitials are an even larger version of an Interstitial, taking up most of the screen and providing a very rich online experience. Utilizing this technology, marketers can create streaming media e-mercials that are targeted directly to a consumer's preferences. If purchasing habits have shown that the consumer enjoys skiing, the e-mercial might showcase the advertised product in a skiing-related environment. The thought process is, of course, that the closer the emotional identification with a product, the more likely we are to purchase it.

Point-of-Purchase. We've all been on the check-out line at the drug store or supermarket and noticed an item right by the register that we impulsively place in our shopping cart. That, in essence, is the beauty of Point-of-Purchase (POP) marketing. It is capable of delivering an immediate response at the most important point in the marketing cycle -- when the customer is ready to purchase. Now data mining technology is revving up the whole concept of POP marketing. One POP program already underway is at the check-out terminal in the supermarket. The bar code scanners at these terminals can extract and database a wealth of information about our past buying habits and predict what will interest us in the future. If you are a fan of Ivory soap, for instance, while you are checking out Dove might generate a coupon offering you a 50 cent discount if you purchase its product instead. POP marketing enables companies to offer promotions at the point in the purchasing cycle when we are most likely to take advantage of them.

Wireless and mobile marketing applications take CRM to the highest level, since they are contextual as well as content-related. Contextual marketing enables advertisers to not only reach potential customers with relevant promotions, but to do it when and where the customer is ready to buy.

Wireless. It's predicted that by the year 2007, sixty percent of the U.S. population will be using wireless devices, as compared to two percent today. According to the Cellular Telecommunications Industry Association, in 1999 alone the number of cell phone subscribers grew 25 percent. Smart companies will take advantage of this explosion, utilizing wireless marketing applications as a direct connection with the consumer and a powerful CRM tool. Reaching consumers on their wireless devices allows marketers to entice customers with promotions on products and services in which they have already expressed an interest. For example, a frequent flyer who has just finished checking flight schedules on Delta Airlines via their Palm Pilot will no doubt be interested in receiving a promotion from United or American.

Location-based. Back in the 1960s, when Captain Kirk pronounced "beam me up, Scotty" from his tiny hand-held device, the notion of being able to pinpoint someone's exact location seemed light years away. Now, thanks to GPS tracking technology, a person's location can be identified - via their wireless device - to within as little as a few meters. GPS and other wireless location services are fast creating opportunities for companies to deliver highly personalized, contextual marketing to a consumer who is not only ready, but also in an environment, to purchase at the moment the marketing pitch is offered. Location-based marketing enables hotels, restaurants and retail stores to point consumers toward their nearest location. For example, already supports Palm VII's auto-find feature, enabling customers to locate the three closest Barnes & Noble store locations. Other location-based applications range from retail promotions to pointing travelers toward the location of the nearest hotel or gas station to finding out seating availability at your favorite restaurant or movie theater.

Data mining and data-basing technologies are creating exciting opportunities for marketers to cultivate personal relationships with their target market, but these relationships can only thrive with a healthy dose of respect for the consumer's privacy. No one, after all, wants to develop a reputation as an irritant to their target market - much like the telemarketers who call when we're sitting down to dinner.

To establish what can be a mutually beneficial relationship, ask the consumer for permission to contact them. Once you get it make sure that you only give them information that is relevant to their needs. Don't abuse the relationship by bombarding consumers with irrelevant messages that will only annoy them.

Marketers who employ the new technologies while at the same time respecting the consumer's need for privacy and relevant information will find an exciting new opportunity that can benefit everyone involved.

Reprinted from NewMedia.

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