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The ultimate in sophisticated database prospecting is to construct and maintain your own permanent in-house prospect database. As you add names and bits of information to each name, you learn more and more about who, what, and where your prime prospects are. Out of this database you can build a subgroup of prospects for any specific marketing objective.

In considering this option, keep in mind that direct mail is no longer a costly medium with relatively low response rates best suited for highmargin direct-marketing offers. Rather, the new targeting capabilities of public and private databases make possible response rates that make direct mail a cost-effective medium even for low-cost, low-margin products. (Next time you are considering your media options, call in a database marketing specialist for advice on what the suddenly glamorous new world of direct-mail targeting might be able to accomplish for you.)

Tourism Canada, a branch of the Canadian government’s Department of Regional Industrial Expansion, offers an outstanding example of inhouse database marketing. To attract U.S. tourists, the department had been sending mailings to prospects in the United States, principally to prospects who hunt, fish, or engage in other outdoor activities. Around 1982, they decided they weren’t realizing the full potential of the program, and they brought an experienced professional on board, Aimee Britten.

One of Britten’s first moves was to confer with their agency, Business Services Inc., asking how to expand the program and get better results. Might there be a sizable market of people who were not active outdoors% What about tourists who wanted to visit Canada for its cities, history, and culture? Were trips self-planned or arranged through a travel agent? How were tourists traveling?

To begin answering these questions, Tourism Canada restructured one mailing to prequalified prospects to include a detailed reply coupon and questionnaire. It asked respondents for their age, occupation, travel frequency, travel interests, and so on.

The information provided by the replies was entered in the database, along with the keyed source of the advertising that generated the response. This database is updated constantly, and allows Tourism Canada to tailor mailings and ads to appropriate market segments.

No longer do families that plan their own trips receive mailings that tell them to contact their travel agent. Nor does a 60-year-old librarian who is interested in visiting Montreal receive brochures about fishing and resorts. And the source code identifies exactly which mailing piece, list, publication, or ad produces the best results from specific target groups.

Results aren’t results until a prospect becomes a customer. An ingenious feature of the campaign tracks actual visits to Canada by respondents in the database. A prepaid business reply card is enclosed with each fulfillment package. Returning the card makes the respondent eligible for a premium or a prize, but to qualify, the card must be mailed in Canada. This tells the department not only which and how many of the inquirers actually visited Canada, but also exactly where they went.

Most U.S. state tourist bureau programs are not as sophisticated. State legislatures are glad to spend money on advertising to tout their state’s attractions, but they don’t understand enough about MaxiMarketing to spend an additional amount for the prospect database system needed to get full value for their advertising dollars.

Chrysler Corporation used a semipermanent prospect database that was compiled annually to promote its new Laser in 1983, a sports car designed to compete with such models as the Camaro, Firebird, and Mazda RX-7. From their annually compiled prospect database, they selected households which (1) owned competitive make cars, (2) bought new cars frequently, (3) switched makes when they bought, and (4) lived in areas with dealer coverage. These names then received not just a mailing but a mailing campaign, including the local dealer’s name and address and a reply card which could be used to order the Laser catalog.

Kimberly-Clark’s Huggies disposable diapers division offers perhaps the most dramatic example of the shift toward selective database marketing by a packaged-goods marketer. In Kimberly-Clark’s consumer products group, operating profit rose 40 percent in the first quarter of 1985 compared to the previous year. The increase was attributed almost entirely to Huggies, which was reported to have captured 25 percent of the $2.7 billion disposable diapers market. They gained 10 share points in a single year against the formidable opposition of Procter & Gamble’s Luvs and Pampers diapers, which together had dominated the market.

How did they do it? By a number of innovative moves, including a revolutionary departure from traditional marketing strategy. Out of a total advertising budget of around $35 million, the company reportedly spent $25 million on awareness advertising in broadcast and publication media and $10 million on database direct-mail marketing to new mothers.

They have constructed a database program which can identify by name 75 percent of the 3.5 million new mothers each year. They start by getting the name of the expectant mother from the hospital or doctor. The mother receives very personal letters which include beautifully prepared educational pamphlets about caring for a new baby-communication which builds a relationship with the mother. When she has returned home with her new baby and needs diapers, Huggies cents-off coupons arrive to cash in on the good will created by the mailings.

Furthermore, Kimberly-Clark now had a priceless by-product, a huge and annually growing database of information about parents and children by name and address. This database is as much a company asset as factories and forests. It can be used, if they choose, as a market for many products other than disposable diapers. For instance, they could, a few years later, offer the mother a series of beginning readers for the kindergarten child . . . printed, of course, on Kimberly-Clark paper!

But isn’t such a program prohibitively costly? Kimberly-Clark, by thinking in the MaxiMarketing mode, changed the rules of the game. They based their arithmetic on the fact that a family that uses premium quality disposable diapers spends $1300 on them in the first 2 years of the child’s life. By focusing on the lifetime value of a customer (total sales) rather than the value of a unit sale, the company found that if the entire loyalty-building program increased the number of regular Huggies diaper users by just 1 percent, it would pay for itself. Reportedly the program is doing much better than that.

Murphy Realty/Better Homes & Gardens of Bergen County, New Jersey, has developed what is surely the last word in a prospect database. It is a database of future home-buying prospects.

In 1975, Murphy sent out a mailing to 75,000 Bergen County households offering information on Murphy’s services. It included a questionnaire with such questions as, “What type home are you presently living in? How long do you intend to stay in your present home? What factors make a move unlikely within 5 years? What factors would influence you to move? If you do plan to move in the future, what type of home will you be looking for?” Signing the questionnaire was optional. Within 3 weeks of the mailing, Murphy had received a 4 percent reponse, and half of these were signed with the names and addresses of respondents.

Murphy was now in a position to accelerate the buying decision (and to get to the prospect long before the competition!). If an appropriate property came on the market, Murphy could approach a likely future prospect and say, in effect, “Look, I know you said you weren’t planning to buy a new house until a year or two from now. But since market conditions and interest rates are favorable right now, and I have something that is right up your alley, I thought you might like to consider it.” (Plus, undoubtedly: “And don’t worry about selling your present house. We can take care of that for you too.”)

It was reported that Better Homes & Gardens was so impressed with the system that they planned to introduce it nationally. Doing so could effect a major change in the way residential real estate is bought and sold.

Chevrolet has tested a similar strategy in magazine advertising aimed at career women. The ad sought to involve and reassure the reader before she “comes on the market” as an active car shopper.

To accomplish this, they developed an innovative ad consisting of four pages in color plus a full-page card insert. One page promoted a jazzy model that a young career woman might fancy-the Celebrity Eurosport. One page was devoted to fashion- and career-oriented “you” copy. And two whole pages were devoted to supporting the card insert, which happens to be a credit application that folds up to form a postage-paid reply mailer.

If the application is approved, the prospect can take her letter of approval to her Chevy dealer with the reassuring knowledge that “you’re a preferred customer before you walk through the door.” If the car she wants is in stock, she “may be able to drive it home the same day,” a mighty exciting and appealing notion.

Like Murphy, like Chevrolet, try to develop a relationship with your target prospects before your competitors even know they are prospects (and maybe even before the prospects realize it themselves!).