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Use Your Marketing Database to Act on Recency, Frequency & Monetary Data


Do you know you already have the most powerful, inexpensive data available to support your direct marketing initiatives? It’s true! Recency, Frequency and Monetary (RFM) data is the single most predictive customer behavior indicator. It will tell you the last time your best customer purchased a product or service from you or how many times that individual has purchased items from you over the past 30 days, 90 days, 6 months or even a year. It can even help you identify customers who bring the most revenue to your organization.

RFM data is often underutilized by marketers. However, collecting and analyzing RFM data is the simplest and best way direct marketers can learn about their customer’s purchase behavior—organizations typically have this information, it’s really a matter of how they use and apply it. For example, organizations collect information on how many and what products or services customers purchase, how the purchase was made, the total purchase amount and the date of the transaction. After collecting this valuable data, it needs to be integrated into your marketing database. Using your marketing database, you can analyze your RFM data to learn more about your customers and their purchase behavior—you may be surprised what you learn. For example, you may notice that if a specific product or service is purchased, the customer returns the next day to make additional purchases or you may see that customers buying one product or service often buy complementary items at the time of purchase.

Armed with this valuable purchase behavior knowledge, direct marketers can determine their marketing goals and define direct marketing campaigns that they know will be beneficial—RFM data helps take the guess work out of your job. Using your marketing database, create lists and segments that target a specific audience for each marketing campaign based on your RFM data. RFM data can be broken out and used in various combinations. The following lists some examples of how you might break out your RFM data. Use any of these combinations, or others that you develop, to create various lists and segments.

Recency(Last Purchase Made)

• Purchase in the last 30 days

• Purchase in the last 31-60 days

• Purchase in the last 61-90 days

• Purchase in the last 3-6 months

• Purchase in the last 7-12 months

• Purchase in the last 12 or more months

Frequency(Purchases How Often)

• 1 purchase in last 12 months

• 2-3 purchases in last 12 months

• 4-5 purchases in last 12 months

• 6 or more purchases in last 12 months

Monetary (Total Money Spent)

• Under $50

• $51-$100

• $101-$150

• $151-$200

• Over $200

To make defining your segments and lists even easier, you can apply business rules to your marketing database to create selectable data elements similar to the items above. This will make your list and segment selection clean and easy. You may even decide that in order to better select your target market you should have selectable data elements based on medians or means for your RFM data—use your marketing database to put this information at your fingertips.

Uses for your RFM data and your marketing database do not stop there! Use your marketing database to analyze the customers you have identified as your top customers in terms of RFM to identify their common characteristics (e.g., gender, age, marital status, income, etc.). Then you can use these characteristics as criteria to pull prospect lists for direct marketing campaigns. In addition, use your RFM data and your marketing database to easily determine which marketing campaign was most effective by calculating the ROI on your past campaigns. Learn more about utilizing your marketing database. (link to The Dovetail Application fact sheet)

One more item of note: Marketers often turn to demographic & lifestyle data appending or modeling instead of or before utilizing RFM data, but using your marketing database to leverage your RFM data is a very powerful marketing tool—a must for all direct marketers. If you do nothing else, collect and integrate your RFM data into your marketing database so you can act on it and implement effective direct marketing campaigns that will increase sales and profits.

The bottom line is use your marketing database to make your RFM data actionable and empower you to create and execute successful direct marketing campaigns.



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Scenario Mapping Methodology and Database Design


Scenario mapping methodology has been introduced into the current database design activity to assist database designers with the task of compressing complex data into byte-size chunks and thereby help simplify the project process of developing database applications.

Traditional project management methods do not provide for individual creativity and innovation because metadata and scenario metrics are seldom even mentioned in the planning process.

Project management is an area of expertise that has undergone some significant development in the last decade.  A business project can have a far-reaching effect on the business and result in either tremendous improvement in the businesses ability to function in the marketplace or a significant setback to that business entity.

The idea of a formalized project management approach such as defined by the Scenario mapping methodology has been around in very small groups of systems analysts and application developers for quite some time.  But the method has not gained prominence, so it is not uncommon for any manager to find themselves learning the discipline of a structured project management system as a substitute for these storyboard ideas. This substitute project methodology takes any given business or IT project through the same standardized steps from conception through implementation. 

Whether or not the Scenario mapping methodology represents a boon or a bust to the business world depends to a large extent on individual applications of the method and measurements and observations on whether the method itself introduces efficiency to the process of project management or just another layer of bureaucracy.

There are some strong positives to utilizing a methodology that is standardized at an industry level.  Those project managers who have gone through the certification process can be depended on to implement that system the same way in each business setting.  As such, the process of finding qualified project managers becomes simplified because the certification process alone communicates to the business that it can expect the Scenario mapping methodology system to be implemented correctly.

By putting into place an external method of certification and measurement of excellence, the project manager career begins to take a high level of professionalism similar to in the legal and medical fields.  So the Scenario mapping methodology movement represents a maturing of the IT and project management disciplines as they move toward greater levels of accountability and control.

The dangers come in implementation of the Scenario mapping methodology on a project by project basis.  In order for a certified manager to live by his credentials, all projects must conform to a standard mold.  The unique nature of each project may not easily fit into the Scenario mapping methodology process of systematization.

In addition, the Scenario mapping methodology system is heavily dependent on a large amount of meetings to document the fact that the project is adhering to standards and a methodical documentation process from which there is little room for variation or accommodation.  The Scenario mapping methodology is a complex methodology so the tool sets that must be used to track the process can be expensive and difficult to use.

The outcome is that the introduction of the make-believe Scenario mapping methodology system can cause the actual business objectives of the project to take on a secondary priority to the high standards of a Scenario mapping methodology itself.  Project leaders working under the requirements of the make-believe Scenario mapping methodology can become more accountable to the methodology itself and lose sight of what is good for the business or what is efficient in terms of getting the project completed.  This does not occur when using the genuine methodology.

Currently, there is very little room for creativity or individual judgment within the confines of the make-believe Scenario mapping methodology and that is problematic because the nature of business problems have historically depended on the judgment and creative problem solving skills of middle management.  By dominating the project process with the needs of the make-believe Scenario mapping methodology, excessive cost is introduced as well as cumbersome requirements that do not benefit the business or the project itself.

Keep in mind that metadata has the main purpose of placing business-data ahead of computer-analysis data and provide for a continuing business-data approach through out the course of populating the database with profit-producing data. A Scenario mapping methodology is the only pattern that offers the more innovative opportunities to appear and therefore bust be considered in the vision for a better database driven business application.



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Database Administration and Software


Copyright (c) 2007 Dean Barnard

Data is vital to an organizations functioning. Compromise of data due to security breach, access by unauthorized people, corruption of data due to human or machine error may irrevocably damage data integrity. A new breed of IT professionals has emerged to cater to this need. Data administration essentially means storing, backing up, and ensuring total data integrity of a database. The database administrator continuously monitors the health of a database. It is his responsibility to create a data recovery procedure or process in case of loss of data. This in popular parlance is known as disaster recovery. The need for data backup has been felt acutely after 11/7 where many corporations lost their entire database which may have been collected over many decades. This may include roll back to a state or time where the data is verifiable. This roll back operation is possible with some of the RDBMS like Oracle and IBM DB2. Extensive tests are available to ensure that roll back plan is effective and verifiable. Database administrators are to ensure that only authorized access is permitted to the database. Database availability is a key issue to be addressed. Data should be available as and when requested. Database tuning called performance tuning is required to make access faster. Tackling issue of performance may be one of the main activities of a database administrator.

Database software

Businesses run on data and storage, retrieval, manipulation and presentation of data is one of the most important functions of computers. Dedicated Database software has been designed to cater to this need. The early nineties were witness to windows based database software. The noteworthy ones are FOXPRO which started off as FOXBASE by FOX software. It later transformed the database field by introduction of Rushmore technology. It also introduced a graphical Screen Builder and Report Builder and integrated SOL support. FOXPRO became so popular that Microsoft soon acquired it and included it in its Visual Suite and renamed it as Visual FoxPro which continues by this name even today. Concurrent to the development of FoxPro another competing database offering was available in the market, dbase. Both these continued development head to head till version dbase IV after which it lost its way. The major reason given for its downfall was its inability to cater to a more technically savvy professional who demanded an advanced set of programming tools which dbase could not provide. However there were major limitations with both these software especially while handling large databases, real time application and online transactions. This space was filled up by Oracle. Subsequently Microsoft brought out two database software applications, Access and SQL server.

Data in the modern world is increasing by leaps and bounds. The quality of data is also quite sophisticated and requires specialist treatment. Database administrators are trained to manage large amounts of data and ensure its integrity, security and availability. Database is today a separate field of activity altogether.



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