Strategy: Maintaining a Relational vs. Flat File Marketing Database
l Marketing reports are fairly simple and typically meet most of the marketing needs. If other reports or variations are needed, programming costs could result.
l Often there are no online capabilities.
l RFM information is rolled up with only the first, last and to-date order information visible. No transactional information is available.
l Customers who are multidivisional purchasers can’t have their information viewed across divisions.
l Set-up costs are higher than a flat file.
l Purchase activity is viewable down to the item level.
l Customers can be viewed and selected across multiple titles as well as multiple channels.
l Online access makes it possible to view information and perform selections.
l It allows for full analytical capabilities.
l Promotional activity in e-mail, retail and catalog can be viewed.
l Because of the information it maintains, lifetime value as well as other analysis can be developed.
l All of the history for each order is viewable.
The more catalog titles you circulate, the more a relational database makes sense. If you maintain a flat file, the data relates only to a specific catalog title or brand. Develop a circulation plan for each title independently. If you maintain a relational database, look at customer purchase history and behavior across all titles.
There should be no duplication. This protects the integrity of the data and reporting, and actually can help you reduce the number of catalogs you send to any given customer. It also can help you target which title a customer should receive, etc. You actually can improve the effectiveness of your mailings while reducing your selling expenses.
Some other benefits of a relational database include the following:
Applications for roll-ups and aggregates to various levels using detailed information on the database. With a relational database, catalogers can use the product category level information (even down to SKU), purchase channel and repeat purchase rates for any given period and from any given segment — and back validate RFM selections. With a relational database, you can view full transaction history so you can see, for instance, if a customer has only purchased on the Web or through the catalog.