Strategy: Maintaining a Relational vs. Flat File Marketing Database
A housefile, or customer list, is a valuable marketing tool if you maintain it properly. It enables more targeted marketing; facilitates various analyses; and generates incremental income from renting and/or exchanging names with other reputable mailers.
When talking about building and maintaining a customer housefile, there are two issues you need to address: 1) collecting data into your order entry system, and 2) extracting relevant subsets of this data to build a marketing database. If you circulate multiple catalog titles or have a large file of records for which you’d like to see transactional history and do complex queries, maintaining a relational database (vs. a flat file) might be the way to go. There are advantages to both.
A relational database enables you to look across all catalog titles to determine who’s purchasing from your other catalog titles or sales channels. Relational databases are different data tables, i.e., multiple titles that relate to each other. A flat file is one-dimensional; a collection of data in columns and rows, often presented as a spreadsheet. If you circulate more than one title and cross mail to your housefile via a relational database, you can determine buying patterns in addition to standard recency, frequency and monetary value (RFM) analysis. It will enable you to mail “smarter” to your housefile. (For instance, you’ll better know how often to mail, which groups to mail and what title to mail.)
Cost is an important consideration with regard to setting up and maintaining a relational database vs. flat file database. One is more expensive than the other. Carefully consider the advantages of a flat file database vs. those of a relational database before you decide which way to go. Here are some points to consider.
Flat File Database
l Initial set-up and development costs are less than a relational file.