>Thinking about the sheer number of, well, numbers that retailers have in their possession can be a bit daunting in and of itself. Understanding what to do with all of that data is a different beast entirely. So I was particularly interested to pose some questions to Kevin Blayne, President and CMO of MSC, a database marketing solutions company with an impressive retail clientele. In his Q&A, Kevin discusses ways to cure the “civil war” he sees within retail companies, shares advice for businesses on how to get started managing all that information, and provides insights on how analyzing and consolidating data can save companies millions.

Retailers have come to understand the importance of keeping their best customers and maximizing their share of wallet, so we have seen a real shift from acquisition to retention. But many retailers treat all customers the same, sending all groups the same messaging and offers. The effective retailers are leveraging versioning through segmentation. We have been able to demonstrate through data analysis and campaign management a meaningful ROI for those retailers sending relevant offers to the appropriate people. This is a trend that is not going away any time soon.

I know your company specializes in managing extreme amounts of data for clients. Talk about one of your favorite examples of a recent retail project.
We had one client – a national specialty retailer – who when we started working with them, thought they had approximately 23 million customers, which they were marketing to on a monthly basis. We spent a tremendous amount of time and effort in the analysis, hygiene and consolidation of the data. When completed we found that in fact, the client had 17 million records of which less than half had activity within the last two years.

Many retailers have different pockets of data on credit card subscribers, online buyers, loyalty card holders, and the list goes on. What’s your advice on how a retailer with millions of pieces of information all around their company should get started with the tall task of making any of it make sense?
Start small and gradually scale-up the solution. It’s important to address the data collection/hygiene and direct marketing production needs first and then build the foundation that eventually will become a marketing database. Ignoring this approach lends itself to a solution that best suits the vendors’ capabilities, not a customized solution that exactly fits each client’s individual needs. Retailers often are enamored with all of the bells and whistles of a marketing database solution, when all they need to start are the fundamentals of blocking and tackling.

In what ways have you seen retailers take data and analysis to make changes to their own business?
With effective campaign tracking techniques (couponing/variable barcodes), data mining, and modeling, retailers are able to save budget without jeopardizing results. One of our clients was mailing upwards of 70 million pieces of mail a year. We worked with them to re-structure their entire mailing strategy, which helped them reduce their mailing quantity by 22% – saving hundreds of thousands of dollars and increasing sales results by 29%. The money saved was used not only to test new programs, but also create a new internal analytics team.

What do you see as the biggest mistake companies make when dealing with data management and marketing?
Many companies tend to over-scope their initial solution. Most retailers do not need to start with a Space Shuttle when a regular Jet will suffice. There is an explosion of customer data that can be collected and housed in a marketing database. Most retailers need direction in understanding what data elements to capture, measure, report on, and interpret within their universe of information. Drilling to the right/appropriate level is the key, the tendency is to analyze down to the minutiae.

Many retailers today reach the same customers in a number of ways, whether it be websites, store visits, or iPhone apps. What’s the best way to track one customer through all of these different channels?
A unified view of their customers and/or prospects provides higher quality information in the marketing database, marketing intelligence to better understand customer insights and behaviors (attitudinal information is becoming equally important as demographic information), improved targeting, segmenting and profiling, comprehensive access to the data, better deliverability, and superior tracking.

With social media becoming a huge focus in retail, are companies able to extract or leverage data from social media channels like Facebook and Twitter?
The marketing database is moving beyond a transactional tool and evolving into a multi-channel brand database. Tracking for digital touches is critical for planning as digital becomes a larger part of the marketing mix, which is trackable, hence providing full circle insight. There has been a lot of talk about social media channels, but we haven’t seen much traction yet in the ability to extract meaningful and actionable data from these channels, yet. Stay tuned, though. I do believe that it is coming.

Retail executives often contend that they don’t care how people shop (in store, online, etc.,) as long as they shop with them. However, in the mid-tier of an organization, there can be quite a bit of friction between the people responsible for each channel. What’s your take on this?
There is a civil war between the ecommerce and brick-and-mortar teams. There is a big fear of cannibalization within the respective groups if information is shared. What they don’t realize is by working together and sharing information, they can drive customers to use both channels. Through the implementation of an effective marketing database, we have been able to quantitatively demonstrate for clients that cross-channel shoppers spend significantly more and shop more frequently than those that transact in only one channel.

What retailers come to mind who are on the forefront of reaching customers at each touch point and turning that data into sales?
The first company that comes to mind is Jo-Ann Stores. To fulfill their vision of tracking the performance of each specific customer touch, we generate a variable barcode on as many outgoing communications as possible including both email and direct mail. This allows Jo-Ann Stores to not only evaluate the results of campaigns more effectively but also capture additional transaction information at the individual customer level, which can then be used to better target future campaigns. In working together, we have been able to identify segments that return high double digit response rates.

What do you see as the future of direct marketing?
Two thoughts come to mind. First, segmentation will be more widely used as retailers realize that customers are not all created equally. Retailers will leverage data to determine the most valuable customers and what their hot buttons are in terms of messaging, communications channels and offers. Contrary to those that preach one-to-one marketing is here today, I believe that within 10 years it will really arrive. Second, the ability to push and pull personalized data via set top boxes to specific households will enable the television to become one of the most sophisticated and desirable direct marketing channels. It could be a real game-changer.

Many industries – from health care to banking to hospitality – have huge database systems. What do you love most about retail that keeps you focusing on this field?
Retail combines art and science. Advertising tends to be about the creative, but there isn’t a lot of quantitative information to back up the results; it is a soft science. Retail databases bring the quantitative results to either justify rolling out, continuing or killing a particular strategy or creative. Working in retail, the registers don’t lie and you are able to measure the results of your efforts very quickly. We are able to quantify creative, making it the best of both worlds.

Early in your career, you worked as a programmer analyst for L.L. Bean, which recently took the highest honor in our ranking of the top retailers for customer service. Was there anything from that experience you take with you now as you work with retailers on a more high-level basis?
I was taught very early on at L.L. Bean to think like a customer. During my time there – regardless of your role – you spent some time every year in a customer-facing environment. I clearly remember taking customer calls in the call center, and those interactions certainly left a lasting impression on me in regards to the ultimate goal of our efforts, satisfying a customer. L.L. Bean taught me that customers are not an interruption of our work. They are the reason we have work.

The Retail Innovation & Marketing Conference will be your first NRF event. What are you hoping to take away from it?
I hope to gain some additional insight into what is currently on the minds of the leading retailers, in regards to both macro issues and direct marketing. For 25 years, MSC has grown strictly by referral and word-of-month. Frankly, I hope to meet one or two retailers that we may be able to partner with and share with many of the lessons that we have learned over those years to positively impact their business.

By Ellen Davis, VP and NRF spokesperson | Published: February 12, 2010