In less than two years, Replacements Ltd.’s database of customer e-mail addresses grew fourfold--from 300,000 in July 2000 to 1.2 million last month. But as the base grew, Replacements realized that it knew less about its customers. The marketing medium that was widely touted as the most personal way to communicate with customers had allowed Replacements to communicate a lot of information about itself to customers, yet had yielded little information coming back about the customers.
At the same time, Replacements was still remembering its last effort at researching its customer base. Ten years ago, a survey of customers generated 2,400 responses and cost $26,000. At a company that prides itself on doing everything in-house as efficiently as possible, it’s no surprise that management didn’t want to spend money doing such research again.
But in 10 years, the gathering of customer data had changed. This time, Replacements gave a 100,000-customer slice from its base of 4.5 million to Acxiom Corp. Its goal was to learn such information, on an aggregated basis, as income and lifestyle characteristics, which magazines customers subscribe to, what kind of cultural events they attend, how they entertain and so on. "The whole point was to understand what our customers want, then go out and do better ad buys," says Jack Whitley, director of sales and marketing.
Acxiom ran the list against its database of consumers and the resulting data gave Replacements many new ways to think about approaching its customers, Whitley says. For instance, the results identified that many customers’ home value was in the top 10% of local markets values, that many were interested in foreign travel, stocks and bonds and wines. “It showed us a vein of customers we hadn’t thought of before,” Whitley says. The analysis cost $2,400, Whitley says.
Replacements used to the data to target new online markets for advertising. The analysis has brought in new customers. “Across the board, we’ve had better results with ad selection using these criteria,” Whitley says. “People think you can win online by doing brute force advertising. It’s just as important to be targeted online as it is anywhere else.”