Chapter 4

Collecting
customer
information
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And here you can add your subtitle.

 INTRODUCTION
As discussed in Chapter 1, direct marketing relies for its success on the collection and
application of information. Without detailed information, we are not able to focus on the
right customer groups or segments, and without this focus we cannot take advantage of the
power of direct communications. This chapter will discuss: • the types of information you
should gather about your customers and prospects • the sources and methods of obtaining
such data. You may be wondering how, with costs already so high and margins under
threat, you can afford to develop a more sophisticated marketing system. Can you afford to
increase the frequency of customer communications? First, you cannot afford not to. If you
do not do all you can to lock in your customers, a competitor may lure them away. Second,
you do not need to communicate with all customers in the same way or with the same
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frequency. Third, by focusing on specific segments, with highly relevant offers, you will
increase your return on investment, despite perhaps spending more on the overall program.
 INTRODUCTION
One of the main benefits of gathering customer information is that it enables you to
segment customers into groups of a similar kind. Database analysis will help you
select those segments that are more likely to buy or buy additional products. It will
also highlight those less likely to buy, and enable you to quantify the potential from
each segment. You can then focus your main additional marketing efforts on those
who will provide the greatest return on the investment.
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 What information do you need?
First, we will consider what customer information might be useful to you and then
discuss how you can get hold of it.

Consumers

• Name and address – the obvious starting place. It is vital to have accurate
complete details here.
• Transactional information – this is what products they have bought from you,
what they enquired about and what you offered them in the past.
• How long have they been a customer? The longer you have had them, the more
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chance you have of retaining their business.

 What information do you need?
• Property type – there are a number of these systems (such as ACORN and
MOSAIC). Property type can be a very useful indicator for lots of products. Its main
limitation is that it deals with properties rather than people and it relies on the
premise that people who live in the same types of house will have the same needs,
wants and buying characteristics. Whilst this may be broadly true, you only have to
compare yourself with your next-door neighbor to see that it is a huge
generalization. Property type indicators would be quite accurate in identifying high
and low value areas – they are less good at identifying the characteristics of
individual occupants. There are other property descriptors that may also be helpful,
for example do they have a garage, is the property detached, semi-detached or
terraced and is there a garden?
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• Household composition – this is the number of adults, the number of children and
their relationships to each other. It is often important to know the ages of the
various occupants.
 What information do you need?
Lifestyle data

Although geo-demographic systems such as ACORN and MOSAIC can be very

useful in broad targeting and evaluation of customer types, they are limited by the
fact that they do not deal with individuals. Psychographic or ‘lifestyle’ data, on the
other hand, is about individuals. Its limitation is that not all UK households are
represented on the various lifestyle databases. Collectively, the various lifestyle
companies now have detailed volunteered questionnaire information on up to 40%
of UK adults. There are many duplicates across the various lifestyle databases, but
Claritas (the largest UK practitioner) now claims to have detailed information on
more than 75% of UK households.
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 What information do you need?
This information covers details of products preferred across a wide range of
consumer areas from holidays to toothpaste and cars to insurance. These
databases also contain information on age, income, occupation and so on. The
lifestyle companies have worked in partnership with other organizations such as
the Henley Centre to produce some very sophisticated profiling techniques
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 What information do you need?
Business-to-business information

The above classifications relate to consumers, but similar information is available

for business-to-business marketing using classifications such as the following.
• Business type (perhaps by industry code) – it is often productive to segment
businesses into industry types.
• Company size, including the number of employees and/or the size of the
turnover. Clearly, this could be a highly relevant factor for certain products and
services. A car fleet supplier would obviously want to segment a prospect file
based on the number of employees, or ideally on the number of employees with
company cars.
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• Age – in this case, the age of the business. Although it may not seem relevant, it
is in fact very important, as the following example demonstrates
 How to obtain the information
Information can be sourced:

1 internally, that is by asking your existing customers and prospects via the sales
force or by telephone or postal questionnaire if you do not yet have a database (if
you have a database, your information gathering will start here)

2 externally, that is from sources such as the register of electors, lifestyle

databases, credit reference houses and business information brokers (such as
Dun & Bradstreet and Experian), rented databases (mailing lists), advertisements
and leaflet drops; data is also available from industry studies and omnibus surveys
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3 through original marketing research – using a range of techniques that will be

discussed later in this chapter
 Collecting information from existing
customers
Train employees to gather information at every opportunity

Every employee must understand the power of up-to-date information and be

encouraged (preferably), coerced, or if necessary forced to gather data at every
opportunity. When a customer telephones (almost regardless of the reason for the
call), you should try to complete the missing fields in your database. Most
customers, when approached politely, are prepared to give basic information about
their circumstances, their properties, the number of cars they own and similar
details. This is so important that many successful companies incentivize their
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employees to ensure that this happens.

 Collecting information from existing
customers
Specific questionnaires

Have you ever asked your customers, formally, what they think about your
service? How many do you think would respond to a printed questionnaire – 5%,
10%, 25% or more? It may be surprising to learn that many companies receive
more than 50% response to a customer questionnaire. Of course, to achieve such
high levels of response your survey must be ‘customer focused’ – that is, asking
questions which are seen to be relevant and giving good reasons why you would
like to have the information.
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 Collecting information from existing
customers
Specific questionnaires

Have you ever asked your customers, formally, what they think about your
service? How many do you think would respond to a printed questionnaire – 5%,
10%, 25% or more? It may be surprising to learn that many companies receive
more than 50% response to a customer questionnaire. Of course, to achieve such
high levels of response your survey must be ‘customer focused’ – that is, asking
questions which are seen to be relevant and giving good reasons why you would
like to have the information.
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 Collecting information from existing
customers
In face-to-face and telephone research the interviewer relies on skill and charm to
persuade the respondent to participate. The intended respondent does not know
what questions are in store and a mini relationship is developed during the
interview. In this way a skilled questioner can elicit a remarkable amount of
sensitive information, even information about personal hygiene and sexual
matters.
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 Collecting information from existing
customers
However, it is not possible to develop the relationship so cautiously in print. With
printed questionnaires, recipients tend to read the whole thing before deciding
whether to fill it in. So how can you persuade more people to fill in your
questionnaire?

One of the most effective techniques is to find a way of making the questionnaire
more interesting and relevant to the recipient. If you can identify some specific
interest of an individual, you may be able to use this
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 When designing a questionnaire, consider the following points.

1 Make it easy. Do not ask people to spend a long time writing out answers. You should give as
many pre-printed options as you can, asking respondents to simply tick the box that is closest to
their view, like the example above. It is also a good idea to leave a line or two at the end of each
question for that small percentage who feel so strongly about something that they wish to write
some additional comments. Such comments cannot easily be quantified for analysis, but can be
noted and reported for further action where necessary. This is also an excellent source of
testimonials.

2 Make it relevant by using special interest questions (like the example above).

3 Promise a benefit. For businesses, it might be a copy of the outline findings. Often you can
promise a general benefit, such as: ‘Your answers will enable us to provide you with a better
service, more closely aligned with your needs.’
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4 Do not make it too glossy. It should look like a research document, not a promotional leaflet
 5 Give clear instructions where necessary. Do not leave anything to chance. Give
worked examples for more complex questions.

6 Break it up, with prominent section headings where necessary.

7 Do not cram it the questions. Large type and plenty of white space will make it
look easier to fill in – this means more people will do so.

8 Leave room for discretion. If you are asking for personal information such as a
person’s age, some may be reticent to complete the questionnaire. Rather than
deterring them from returning the questionnaire, reassure them that you would
still like to hear from them, even if there are certain questions they cannot or do
not wish to answer.
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 Gathering information through external
research
Traditionally, direct marketers have ignored marketing research, believing that their testing
program provided all the information necessary. This view has slowly changed but there are
still many diehards who cling to the view that research is money wasted. The following are just
some of the ways a direct marketer could use research.

1 To learn about customers – their needs, wants and buying patterns, and who else they buy
from and why.

2 To group customer by typology, for example organized/disorganized; sophisticated

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tastes/simple tastes; and older and affluent/younger aspiring.

 Gathering information through external
research
3 To measure attitudes towards the company and its products – research can help
us measure those things beyond raw response data, for example did our mailing
make people think differently about us?
4 To find out what positioning we have achieved in the market place – a company
may want to be thought of as the ‘Rolls Royce of services’, but if its customers and
prospects think of it as a Fiesta, it needs to know.
5 To identify prospects – that is people or companies having the same needs or
inclinations as our best customers.
6 To understand buying processes and decision-making – especially in business-
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to-business marketing.
7 In planning campaigns, business development, new products, pricing and so on.
 Gathering information through external
research
8 To identify trends in the market place – good planners need to stay ahead or at
least abreast of what is happening out there.
9 To monitor competitors and their marketing activities.
10 To refine communications – ensuring that people understand and relate to what
we say.
11 To measure the effectiveness of non-response activities. Although it is easy to
count responses and even to measure the quality of those responses, some
communications are designed to change attitudes rather than attract replies. The
only way of measuring their effectiveness is research.
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 Gathering information through external
research
There are broadly two kinds of marketing research – desk research and original
research.

Desk research Desk research or secondary research is that which is already

available – you simply have to locate it and read it. Some is available free of
charge, other studies can be subscribed to.

Original research Original (or primary) research is that which you can do yourself.
Original research has two broad classifications – quantitative and qualitative.
Quantitative research asks and hopes to answer the questions ‘How much?’ or
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‘How many’. Qualitative research asks the question ‘Why?’ and explores, for
example, the deeper reasons behind the customer’s purchase of a particular
brand.
 Using the Internet for information
gathering
Many of the techniques described above can be managed or at least started online through the use
of the Internet.

Online businesses have a real advantage in collecting customer information as the use of cookies
(a device which allows a site provider to recognize the browser’s machine), allows them to track
buyer progress through a Web site. They can also use online surveys to measure many things,
including customer satisfaction with the site. For example, Dell has a pop-up rating scale,
allowing customers to rate the page.

The use of e-mail surveys to gain information, rather like the fax a generation ago, is currently
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achieving very high response rates, although this might fall as consumers become more concerned
with the effects of unsolicited e-mail communication (sometimes called ‘spam’).