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The Impact of Data Mining on Marketing

Data mining is a huge buzz word in today’s digital world.  Love it or hate it, the ability to mine data has truly changed many industries for the better—but at what cost?  The question many experts and consumers are asking is—how far is too far when it comes to our privacy?  Is it ethical or legal to buy and sell the personal and private details of a consumer’s digital footprint, lifestyle, etc?  These are questions corporations and lawmakers face on a daily basis.  But data mining isn’t going anywhere, and artificial intelligence continues to refine itself.  So where did data mining begin, and where is it going?

Data mining is the process by which computers analyze large sets of data and use them to predict behaviors and future trends.  Companies use models, such as a set of examples or mathematical relationships applied to different situations, to make these predictions.  Through data mining, businesses can retain information about consumer behavior that could only otherwise be discovered and studied in focus groups, case studies, or other more time-consuming and expensive methods.  It is efficient and accurate, giving corporations and industries access to information they never had before.  Today’s data mining technology is highly advanced, but it wasn’t always as such. 

Data mining has evolved every decade since the 1960s, starting with its conception of data collection.  Data collection is self-explanatory, but it was initially enabled by computers, tapes, and disks, allowing businesses to retain information about simple concepts such as revenue totals or sales history.  The 1980s saw the birth of data access, which enabled industries to collect more minute details about their day-to-day business dealings.  This data could be stored and reviewed at another time through relational databases, which were also capable of establishing connections between data points.  This led to the invention of data warehousing which reports and analyzes data.  Data warehouses store current and historical data from multiple sources in one place and are used for creating analytical reports.  Data mining was developed from all of these technological advances. 

There are many specific uses of data mining for marketers.  One is market segmentation, which groups consumers into segments based on common characteristics, allowing companies to target them in advertising campaigns.  Similarly, direct marketing uses data mining to identify customers that will have the highest response rate probability to direct mail.  Another is “customer churn” which predicts and identifies customers who are most likely to leave the brand for a competitor.  For security purposes, data mining can be used as fraud protection to identify fraudulent transactions.  Interactive marketing and market basket analysis predict individuals’ interests, future purchases, and products they are likely to buy together.  Finally, trend analysis reveals the differences between typical customers from month-to-month.  In general, marketers use data mining to predict consumer trends and behaviors and discover unknown patterns between consumers and transactions. 

So how do companies access this data?  Is there some sort of data black market where corporations put consumers’ profiles into a basket and check out? A data Amazon?  Thankfully, for consumers like you and I, there is an entire professional (and not sketchy) industry focused on data mining.  The professionals who work in this industry, buying and selling data, are called data brokers.  Data brokers collect information from public records, online activity, and purchase history (to name a few) and then sell it to businesses who use it to influence marketing decisions.  Some of the largest data brokerage companies store data for more than 500 million consumers all across the world.  Data brokers also purchase data from specific companies who sell information, such as lists of consumers who belong to loyalty programs.  This purchased data is then sold to other companies who may use it to make decisions about their own loyalty programs.  The options, like the data, are endless.  Unless a consumer is living entirely off the grid it is safe to assume a company owns their data.  Luckily, some companies offer consumers opt-out options which prevent their personal data from being sold or rented. 

Although the opt-out option leaves consumers with some control over their data, legislators across the United States are fighting for more consumer privacy rights.  Recently in the news, Facebook made headlines after it was revealed that hackers sold the online identities of 267 million Facebook users for the price of $540.  The data was comprised of users’ email addresses, names, Facebook IDs, dates of birth, and phone numbers.  Although no passwords were stolen, users could easily fall victim to phishing and accidentally give away more serious private information.  Data breaches and insider trading like this happens every day, and law makers are using these examples to lobby for their constituents.

With new technology, data mining has come a long way since the early days of data collection.  As artificial intelligence becomes more prominent across all industries, data mining will continue to grow as a powerful tool for marketers and businesses alike.  Although it comes at a price to consumer privacy, new legislation offers protection and a nice compromise between personal security and business efficiency.  It will be interesting to see how this balance plays out between public and private interests.  For more information on data mining and other direct marketing techniques, order Corporate Communications Group’s Direct Mail Marketers Guide

By Marley Niesz

5 HOLIDAY MARKETING CAMPAIGNS WE LOVE

Image Credit: https://time.com/5477091/santa-tracker-2018/

1.  Santa Tracker- Google Maps

A CLASSIC holiday campaign. Santa Tracker is so synonymous with Christmas you may have never even realized it’s a well-disguised advertising campaign for Google Maps. Every Christmas Eve for as long as I can remember my family looks at the Santa Tracker website to get into the holiday spirit.  Santa Tracker appeals to kids and adults of all ages, and with new features added every year, continues to successfully evolve.

Image Credit: https://www.fastcompany.com/90271139/how-rei-is-keeping-the-optoutside-magic-alive-on-black-friday

2.  #OptOutside- REI

I need to get something off my chest… for as much as I love Thanksgiving, I HATE Black Friday.  As a result, I love REI and its #OptOutside Black Friday campaign, for which they closed all their stores to encourage people to spend time outside and give back to Mother Earth. Customers used the hashtag #OptOutside to showcase their time in nature on social media, simultaneously providing UGC (user-generated content) for the REI brand. This campaign is unique and meaningful and continues to be a success year after year. 

Image Credit: https://twitter.com/nzsecretsanta?lang=en

3. #NZsecretsanta- New Zealand Post’s Secret Santa Gift Exchange

In 2013, the New Zealand Post decided to sponsor the online Secret Santa social media campaign started by twitter user @WebSam. #NZsecretsanta turned into a nation-wide celebration of generosity and togetherness where participants spend up to $10 sending a gift to a total stranger — connecting people all across the country. Even the Prime Minister participates! The success of this social media campaign continues to grow every year for the New Zealand Post, and everyone who participates receives a gift. It’s a win-win!

Image Credit: https://www.adsoftheworld.com/media/content/alaska_milk_corporation_first_christmas

4. First Christmas- Alaska Milk

In this commercial, which perfectly touches on togetherness, emotion and memories, a daughter experiences her first Christmas without her mom. To bring her family joy during this tough time, she makes her mother’s special Filipino Sapin-Sapin Christmas recipe using Alaska Milk. This holiday commercial was a huge success because of the significance and global familiarity of sitting down for a meal with family transcends all cultures.

Image Credit: https://www.dandad.org/awards/professional/2019/digital-marketing/230690/no-need-to-fly-around-the-world-in-germany/

5. No Need to Fly/Around the World in Germany- Deutsche Bahn

A whopping 72% of Germans travel abroad for the holidays. In this innovative marketing campaign, Deutsche Bahn, a German rail line, encouraged Germans to stay home for the holidays instead. Each commercial compared foreign tourist spots to ones within their own country, and showed the money saved by choosing to ride a train instead of fly. Utilizing beautiful, “Instagram-able” imagery, Deutsche Bahn impressively compared the landmarks and countryside of Germany to ones all across the world. After airing this campaign, they saw a 6.61%. conversion rate and  a 24% YOY increase in revenue. Now that’s inspiring!

By Marley Niesz

Guide to Nonprofit Marketing

By Marley Niesz

                In 2018, Americans donated $410 billion dollars to charities across the country, with the average household donating $5,508. Although $410 billion is a lot of money, the number of households making donations is on a decline and the donor pool is shrinking. This reveals the importance of maximizing the amount of money each individual is donating, as well as consistently re-engaging the organization donor base. In fact, it is more cost effective to retain donors than it is to acquire new ones.

                In order to effectively recruit and re-engage donors, a nonprofit organization or foundation should visualize a donor persona. According to CCG’s Nonprofit Marketer’s Guide, a donor persona is a “way to describe and visualize the people you are trying to engage with, whether in a marketing effort or in a fundraising campaign.” Nonprofits create donor personas by collecting real data from their current and potential donors. This data includes demographics, behavior patterns, interests, concerns, communications preferences, and personal histories with your organization. One organization may have multiple donor personas, depending on their target market.


Figure 1 Donor Persona Template

                Once an organization establishes its donor personas, it should focus on evaluating its current pool of donors and dividing them based on characteristics and engagement. This is called segmentation. One donor segment is a lapsed donor, including donors who gave previously but not in the current year.  The two types of lapsed donors include LYBUNT (donors who donated “last year but unfortunately not this” year), and SYBUNT (donors who donated “some year but unfortunately not this” year.) On the other hand, there are recaptured donors who donated this year and in previous years, but not last year.  There are also downgraded donors who give less and upgraded donors who give more than they did the previous year. A highly valuable donor is a recurring donor who pledges to give monthly on an automatic basis. Finally, there are single gift donors who make a one-time donation to your organization. 

                After evaluating current and future donor bases, nonprofit organizations can plan their charitable giving campaigns accordingly. Direct mail campaigns are physical messages printed and mailed to current and prospective donors. Because of new digital print technology, nonprofit marketers can use collected data to send personalized messages and images to individual donors. CCG frequently uses their Ricoh inkjet for nonprofit and foundational direct mail marketing, designed to print high volumes of variable printed pieces in a single pass. There are also many ways to fundraise digitally, including crowdfunding, #GivingTuesday, text-to-give, and peer-to-peer fundraising. Crowdfunding involves soliciting many small donations from a large group of people, generally online. Text-to-give and peer-to-peer fundraising are two types of crowdfunding. Text-to-give is a campaign that engages donors through mobile giving, and peer-to-peer is a campaign where individuals create personal fundraising pages and receive donations from friends and family on behalf of an organization. Finally, a newer and proven-to-be quite successful fundraising celebration is the launch of #GivingTuesday, a nationally recognized day of online giving which occurs on the Tuesday following Thanksgiving. #GivingTuesday is important to leverage as it kicks off the charitable season when many donors are looking to give. 

                All marketing is persuasion, and one of the best ways to engage with your donor is by using the “rhetorical triangle.” The three parts of the rhetorical triangle are ethos, logos, and pathos. Ethos establishes credibility and trust, logos creates consistency and logic within an argument, and pathos uses emotions and the imagination to sway the audience. Although it may not be obvious, these three elements are used in virtually all nonprofit marketing, especially in direct mail. Let’s look at some examples—first starting with the envelope. A direct mail campaign for a humane society or animal shelter immediately establishes pathos by printing a picture of one of their animals on the envelope. This evokes emotion from the receiver who has now connected through the image of the animal to the humane society’s message. Often, these pictures include a CTA that also tugs on the heart strings, such as “These animals are suffering. Here’s how you can help.” By evoking emotion through pathos, the nonprofit draws a sense of urgency to their message and as a result acquires more donors. Now, for the direct mail letter. After hooking a donor with pathos, this is where nonprofits can establish credibility and use logic to support their argument and further solidify a donation. An organization can establish ethos by using credible sources to back up their message and make it more believable. For example, if a nonprofit is using statistics, they should be correct and from a reliable, fact-checked source. The author or organization sending the message should establish ethos by citing their experiences with a particular cause and explaining why it is important to them. Finally, logos is an argument’s appeal to reason. A donor cannot say no to an argument when presented with real, understandable facts about an organization’s cause and its need for donations. Just like with ethos, including statistics, data, and common sense strengthens the logos behind a message and helps with convincing a donor to support your cause. For example, an organization looking to end childhood hunger should include facts that demonstrate the existence of childhood hunger and how a donation can help end it. The rhetorical pyramid is a fool proof way to craft an argument, so why not use it to argue a nonprofit cause? 

For more interesting examples, powerful insight, and 10 compelling tips for successful nonprofit marketing, check out our guide titled: “Nonprofit Marketers Guide to Donor Re-engagement”. Order your copy today at: https://ccgcreates.com/guides/

10 Tips:

Tip 1 Have an ongoing strategy to re-engage donors in a timely manner.

Tip 2 Ask more of recurring donors.

Tip 3 Focus on fundraiser retention.

Tip 4 Mobile-first design pays off.

Tip 5 Social is essential.

Tip 6 Social success depends on content and timing.

Tip 7 Donors stay where you find them.

Tip 8 #GivingTuesday is great.

Tip 9 Email and direct mail are powerhouses for nonprofits.

Tip 10 Direct mail and digital marketing work together.

4 Powerhouse Practices EVERY Direct Mail Marketer Should Know

By Marley Niesz

In my last blog post, I discussed the differences between digital and traditional print and the ways data is transforming the printing industry. This week, I would like to explore a marketing medium that continues to evolve as rapidly as print does—direct mail. One of the only things I remember from my college marketing classes is this: direct mail consistently outperforms other marketing touchpoints. Year after year, direct mail receives the highest response rates of any form of integrated marketing communications.  On average, consumers keep mail for 17 days before discarding it.  That’s over two weeks of brand exposure to anyone who happens to pass by or pick up your mailpiece. Can digital marketing do that? Linger for two weeks, giving you a tangible piece you can lay your hands on and leaf through at your convenience? To digital marketers, direct mail marketing may seem archaic — like a thing of the past. Actually, it is a more relevant and powerful marketing platform today than ever before. How can you harness it’s potential? Here are four direct mail practices that every marketer should know and use.

1. Personalization and Customization

According to Corporate Communications Group’s Direct Mail Infographic, the average American household receives 454 pieces of marketing mail per year. And 41% of American’s actually look forward to checking their mail every day. So how can you send distinguishable direct mail that speaks specifically to each recipient? Send them mail created just for them—personalized and customized to each person. As I mentioned in my previous blog, data is the key to variable and personalized direct mail. Simply putting a customer’s name on a piece of mail is no longer an impressive marketing feat. Research shows that 54% of consumers want to receive mail from brands that interest them with promotions that are relevant. Because of this, brands should be tracking their consumers digital footprint to better understand and anticipate their purchase intent. They can then use that data to customize and send direct mail campaigns to the same audience with exactly the product(s) or promotion(s) they were looking at online. (This is known as “retargeting” with direct mail.) Of all industries, travel and hospitality currently print the highest volume of direct mail. Using cruise lines as an example, they could easily distinguish themselves from their competition by sending a brochure detailing the exact trip the traveler was previously researching online. But, as we see on a regular basis here at CCG, personalization can be applied to all types of direct mail in all industries. Interested in how your company can refine its direct mail strategy to include personalization? Contact Corporate Communications Group today and let us help you personalize your next direct mail campaign. 

2. Prospecting

Let me ask you a question.  Which would you rather receive from your best friend? A generic email or a meaningful, handwritten letter? Unless you’re a robot, or perhaps a psychopath, I would assume the latter. Like a good friendship, prospecting is all about relationship building and putting in effort. High-value prospects deserve to receive a package in the mail with their name on it and a personalized message. This package could also include print samples specifically for your prospect or branded merchandise relevant to their industry. Just like general consumers, your prospects receive hundreds of mailpieces every year. It is up to you to print something memorable for them. Direct mail can cut through the noise of the digital world and allow for further engagement with prospects, in addition to whatever online channels you may be using. 

3. Cross-Channel Promotion

As I was researching for this blog, I scoured a number of websites for data and information. Afterwards, I went onto Facebook to check the notifications on the Corporate Communications Group page and the first thing I saw was an advertisement for one of the websites I had just visited. I immediately recognized the brand, and now it has been in the back of my mind all afternoon. This is an example of cross-channel promotion and digital retargeting. Reaching customers across multiple platforms in a short period of time is crucial to brand recognition, sales, and customer retention. Wise marketers will incorporate direct mail into their omnichannel marketing strategy as well.  Let’s analyze a scenario. I’m on the Target® website comparing makeup concealers from Brand A and Brand B. Later, I see an advertisement on google from Brand A for the exact concealer I was looking at, and I receive an email from Brand B. Two days later, I receive a post card advertising the concealer from Brand B. Statistics show that most consumers would move forward and purchase Brand B. These statistics can be found in the CCG Direct Mail Infographic. Our infographic research also taught us that 73% of American consumers prefer being contacted by brands via direct mail and 60% of catalog recipients visit the website of the company that mailed them the catalog. More touchpoints within your marketing strategy often leads to more sales. At CCG we work with our clients every day to optimize their cross-channel promotional strategy—let us do it for you too!

4. USPS Promotions

Every year, the United States Postal Service releases new promotions to help businesses save money and encourage direct mail marketing. The remaining active 2020 USPS promotions include incentives to combine direct mail with mobile shopping, a personalized color trans-promo promotion, and Informed Delivery®. The mobile shopping promotion can be used when mailing marketing mail. Through this promotion, USPS is encouraging the integration of mobile technology and mail. Any direct mail campaign that uses QR codes, other barcode formats, and app-enabled QR code payment options is eligible to receive a discount as long as the company has registered and dropped the mailpiece into the mail stream before the New Year.  Another promotion is personalized color trans-promo which is for first class, presort mail only. The USPS would like companies to modernize their customer bills and statements while also promoting other products and services. Companies qualify for this promotion if they use variable color print in their transactional statements, including personalized marketing messages. This promotion also runs through the end of 2020.  (Every year when the USPS announces their promotions schedule, CCG includes it in our marketing publication ENGAGE and posts it on our website.)

Finally, USPS is offering an Informed Delivery promotion through November 30, 2020 for marketing and first-class mail. Informed delivery is a program that is gaining users faster than any other USPS program, sending registrants a daily email digest showing them all letter-mail that will be arriving that day. The email consists of the scanned images of their incoming mail. But the great thing about informed delivery is the role it plays in the omnichannel strategic approach I mentioned earlier. Customers who enroll in this program receive a free, secure account with a digital mailbox that they can log into to view their mail before it is delivered to their house or they can view it in the email sent directly to their inbox. A mail campaign is eligible to receive a discount from the USPS if the mailer has registered their direct mail campaign with the USPS and provided a coordinating digital image and URL which the USPS will replace their scanned image with. When the recipient receives their email or checks their digital mailbox, they can click on the four-color image of the direct mail piece to be taken directly to a coordinating page online, providing a second touchpoint to the original piece of mail. There are already many case studies which show the value of Informed Delivery for marketers.  In a case study for the Pittsburg Pirates, the organization was able to perform a split test of three complementary calls-to-action on the digital version of one mail piece. Using the Informed Delivery technology, the Pirates saw which call-to-action received the highest response rates of the three, and helped them to understand what promotions were more likely to prompt people to take action.  Informed Delivery is an easy, free way for marketers to increase impressions and response rates.  On the consumer side, marketers should encourage their customers to enroll in Informed Delivery as it allows customers to immediately respond to their offer digitally before receiving the mailpiece. Are you signed up for Informed Delivery? You can create your free account and sign up HERE.

In summary, direct mail is far from antiquated and still considered to be the best way to engage your customer base.  Direct mail can be used in conjunction with digital trends in an effective multi-touch strategy when trying to reach prospects or current clients. Just don’t forget to get personal with personalization and take advantage of the promotions that the USPS has to offer—there’s no reason your next direct mail campaign cannot outshine the rest.  Check out our Direct Mail Marketers Guide here and order your copy today