Marketing Competence :: Basics

The issue of a customer-centered Marketing operation is anything but new. Nevertheless, there still confusion about both terminology and scope. That's why I think it's time to bring clarity to the matter, and once and for all dispel the myths surrounding it. This will enable us to understand not only the historical background, but also provide us with a guideline for future action.

Imagine yourself in a helicopter over Milwaukee, USA, on the shiny morning of June 13, 1998. You look down casually on the crisscrossing tangle of roads on Interstate 94, and then do a double take. You can't believe your eyes. It seems like there are thousands of moving objects on the highway below. You watch in horror as a veritable sea of black advances like warrior ants into downtown Milwaukee.

Do we have a membership program in place for our business? If not, we are not only missing a huge revenue stream from advance sales and membership fees, our spending on traditional advertising is much higher than it should be. Research from Bain and Co. shows nearly 90% of responses from traditional advertising is generated from existing customers. Have we considered offering a low cost yearly membership into our business with special savings and benefits for members only? There are very inexpensive solutions for custom membership cards which not only simplify the entire process; they brand our logo and name inside the wallets of our customers.

Companies have recognised that they must develop and maintain a relationship with their customers and prospects, so that they fully understand their needs before making the sale. The strength of this relationship will depend on how much information is held on customers and prospects, and how that information is used in the marketing cycle. Many companies have discovered that a lot of this data already exists in internal computer systems. Knowledge about customers' buying habits, interests, wealth, needs and wants. This information is spread around a company, sometimes on computer but more often on paper (response coupons, order forms, questionnaires). This information is usually collected for a specific purpose. These are all pieces of a jigsaw puzzle that are unconnected. It is only when it brought together in one place, that the jigsaw is assembled. The Marketing Database is the home for all this information bringing together names and addresses and marketing data.

Most people have heard about the concept of customer lifetime value, but few have actually computed it for their own customers. They feel that they lack the data needed to do the computation. Even if they were able to create produce a number, most people don't know what to do with it once they have it. In this short article, I hope to clear all of this up. When you finish reading it, you should be able both to compute your customer lifetime value, and to use it in your marketing strategy.

Database marketing is expanding all over. There is a mad rush to find candidates to fill the positions. Since I lecture on the subject, I am often asked, "What are the qualities that we should look for in seeking the ideal person to do database marketing?" This article is an attempt to answer that question. It seems to me that there are six primary capabilities that a person must possess to be successful.