1995 Dec 01

Group 1 Software DataDesigns System II
David M. Raab
DM News
December, 1995

Mention database marketing in the hospitality industry, and the mind sees frequency programs like American’s Frequent Flyer. Once a brilliant innovation, these are now a standard operating procedure–which means somebody should have written a standard software package to run one. But while marketing agencies offer frequency programs as a service, there is no standard software to run them in-house. It may be that frequency systems are so closely integrated with transaction processing and customer service that a generic implementation isn’t possible.

Still, hospitality marketers need the same analysis, segmentation and promotion management as other database marketers. Some have purchased the classic tools of the trade–proprietary database engines and user interfaces from vendors such as Customer Insight, OKRA Marketing, Harte-Hanks and MegaPlex/David Shepard Associates. Others have built their own systems with standard relational database, query and analysis products.

System II (Group 1 Software DataDesigns Division, 702-897-0080) is an alternative: a database marketing system designed especially for the hotels, resorts and casinos. The system combines standard technology–a client-server architecture, PC hardware and relational database–with data loading, selection, promotion and analysis features tailored to hospitality marketers with minimumal technical expertise at their disposal.

Each System II installation uses custom programs to import operational data such as hotel reservations or casino gaming records. The load programs run on the user’s computer, although they are written and maintained by Data Designs staff. Updates are most often processed weekly, although frequency varies from daily to monthly depending on the installation. A typical update takes a few hours or less.

The system uses a two-level data structure, typically representing customer and transaction records. Records belonging to the same individual are identified through a combination of proprietary matching algorithms and Group 1’s Accumail address standardization. The system does not provide a separate household level, but can group records by address during queries or selections to do household marketing.

The actual file contents are custom-designed for each client. A typical system uses relatively small records, about 150 bytes at each level. It is fairly easy for the vendor to add new fields, since the system’s screens automatically adjust to display the additional data. Adding a new table would be much more difficult.

The strength of System II is its ability to provide non-technical users with powerful queries, selections and analysis. The point-and-shoot query definition screens are easy to use, but still handle complex conditions–such as query clauses linked with ‘or’, ‘not’ and parentheses–that simple interfaces sometimes preclude. Even tricky subqueries, such as selects based on the number of visits within a user-specified date range, can be made possible by building special parameter-driven variables into the database. Queries can be saved for reuse and access to a query can be limited to specific users.

Once a query is executed, the user can browse the result to ensure the right records were selected. These records can then be saved for further analysis or sent to the list generation module for use in a promotion.

System II does not allow the multi-cell, hierarchical campaign selections built into some database marketing software. But it can rank a list on a combination of variables and limit the selection to a specific quantity, capabilities which allow selecting one record per household or finding the top 1,000 records per site. It can split a list in half by sending alternate records to separate files, but cannot extract a true random or Nth sample.

The list of records selected for each promotion is saved in a file for later analysis or reuse. A return on investment module can store the expenses and revenue forecast for each promotion, and will accumulate actual revenues by looking at either all transactions in a date range or records that match a user-defined query. The ROI report shows promotion profitability but cannot link multiple promotions within a campaign or compare respondents vs. non-respondents.

The system provides about a dozen predefined reports in addition to ROI. These include time-series, mapping and Recency-Frequency-Monetary Value segmentation. There is no end-user report writer or form letter generator, although users can use third party tools to read system-created extracts or the underlying relational database files. There is no integrated modeling capability beyond RFM, although Data Designs plans to add a third-party modeling solution in the near future. The system also lacks batch processing and job scheduling.

System II is written in Gupta SQL Windows, a client-server software development tool that creates software to run on Windows PCs. It runs on Gupta’s SQLBase relational database engine. Performance is typical of a relational database on a PC: it can take up to fifteen minutes to return a complex query against a several million record file. SQLBase is adequate for existing installations, which have as many as six million customer and transaction records. DataDesigns is exploring other relational databases and server hardware to support larger installtions.

Pricing of System II depends on the number of data sources that will feed the system and the amount of customization required. A system with one data source could be as little as $25,000, while a very complicated installation might cost more than ten times that amount.

System II was introduced in 1994, and followed DataDesigns original DOS-based product in 1990. It is currently run by about twelve clients at 75 sites. DataDesigns was purchased by Group 1 software in August 1995 and Group 1 expects to enhance the product’s capabilities and expand its market penetration.

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David M. Raab is a Principal at Raab Associates Inc., a consultancy specializing in marketing technology and analytics. He can be reached at draab@raabassociates.com.

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