An Imperfect Look at a Perfect Marketing Future
The virtues and benefits of Database Marketing have been explained in numerous textbooks, but have rarely found proper application in the business world. This can partly be attributed to the confusion revolving around the definition of both database and marketing, the latter in this country often used to describe Advertising and Sales Promotion.
Database Marketing requires a rather deep understanding not only of Information Technology and Marketing principles (nowadays both fairly fast-moving entities), but also through-the-line staff development, adjustments to the organisational structure, overall strategic business planning and on top of this a vision for both yourself and the business. This in itself is demanding enough for an individual, even a combined understanding of “Computers and Marketing” exceeds the knowledge of most marketers.
Database Marketing is not just “the use of a database as the central tool and resource for marketing decision-making, and the basis for establishing personal 1:1 relationships with your customers”. It embraces all business functions and requires a new approach in terms of what the business is all about.
Get It Right First Time
Properly planned and implemented, Database Marketing can be of significant help to your business. But, and there is nothing you can do about it, a lot of things will inevitably change. The extent depends on the progress you have already made in steering your business towards total customer management, the complexity of your business operation, the willingness of all involved to adapt to a changing environment, your goals and vision, your competition, just to name a few.
An understanding of Database Marketing, its objectives, features and benefits, has to be created at all levels of the organisation. Total commitment and motivation is necessary, all features and benefits have to be communicated effectively.
Top management support is absolutely crucial. If this is impossible, you might even forget about it, because somewhere someone will try to sabotage or hinder you in your efforts towards preparing the organisation for the future. Human resistance to change and its implications are well known and a sensitive approach has to be chosen.
Information -> Knowledge -> Satisfaction -> Profit
Once you have gained total support at all levels, with a new vision and commitment, the next step is to upgrade, enhance or redesign your marketing information system to cater for the needs of Database Marketing. Otherwise you run the risk of “using your Beetle for 2m ton drought support”. You will not succeed if you try to gather more detailed market information and process it on a system that is not designed with the customer as the focal point of your operation in mind.
Part of Database Marketing is the collection of market information, initially only address and purchase details, further down also more detailed psychographic, demographic, competitor, other market and environmental information. You will need a marketing database system that not only caters for detailed data input, but which also makes provision for indepth data analysis – the basis for improved Marketing decision-making.
You will have to look at both hard- and software requirements. It may be necessary – now that you embark on a new approach towards business – to rethink current procedures and processes. You may come up with major improvements and simplifications, making your operation more efficient and profitable.
All this sounds easy in theory, but what is required is that the person (or team) responsible for planning and implementation has a thorough understanding of both Information Technology and Marketing. Unfortunately, few programmers understand the Marketing world and vice versa; what make it worse is the current preoccupation with getting new customers (by means of Advertising and Sales Promotion) instead of looking after and nurturing existing ones.
It is always easy to say “develop an effective and profitable information system” with all the rapid changes particular in the Information Technology industry. The answer to this problem is a thorough analysis of the current business environment and a look into the future. Realise where you are, how you would like to conduct your business in future and try to anticipate the most obvious of changes in both demographics and psychographics related to your products. Implement these findings into your system.
Human Resources: Energy, Empowerment, Enjoyment
The most advanced “state-of-the-art” computer system is of little use if it is being operated by the wrong people. The need for standard training is obvious. What will make a difference is the achievement of complete data validity and integrity. There is absolutely no room for error. Bigger corporations will have their own data-capturing departments for formal procedures and this job should carry high responsibility. Support those involved; questions and criticism should be encouraged. You should listen to them very carefully, as you should do to your front-end, because your most significant improvements to the system may come from them.
Having a database system with loads of information and, again, you will need someone highly computer literate with a thorough understanding of your business environment to generate the required “marketing” output. If you are fortunate, major analysis and reporting tools have already been integrated into the system, enabling you to scan your market from your desktop.
The real advantages can be gained from informal customer contacts. Front-end staff, being an integral part of a Database Marketing strategy, have to be trained to treat prospective and existing customers with trust and respect, which they (should) do anyway, but should be encouraged (with provisions made) to capture this information on the system as soon as possible. This will make sure you always have your ear on the pulse. Furthermore, if approached correctly, front-end staff will find greater job satisfaction and fulfillment, with a wide range of benefits emerging from this change in their working environment.
In short: every single person involved in either direct customer contact or customer information processing has to be trained to understand the importance of detailed and “clean” customer information. Simultaneously, the system must cater for informal information gathering and a new culture has to be developed to encourage and reward regular use of the system.
Tell Me How You Feel
One thing has to be clarified straight away when it comes to communication issues: the way organisations are currently communicating with their customers is no longer adequate and does not take long-term relationship-building into account. A new, far more open, honest and personal approach has to be devised.
Correct internal communication is indispensable for the success of Database Marketing. Besides an effective vertical flow of information, one has to look at two other business functions in particular – Marketing and Data Processing. A close co-operation between these departments (or individuals) is required.
Good co-ordination and co-operation between Marketing and Data Processing ensures that Marketing can communicate with the customer on an individual basis and react quickly to or anticipate change in market trends. In short: Marketing’s knowledge should come from the organisation’s internal database. It should also be Marketing’s task to increase the value of the database through innovative, relevant and personal communication. A challenging and ongoing process of crucial importance to the organisation’s survival.
It becomes clear very quickly that even the effective and often pushy Direct Marketing jargon will make way for a style which stresses relationship-building as opposed to a “YES, YES (EVEN IF YOU DON’T NEED IT), ORDER NOW!” quick sale. Basically, it will be more like writing a letter to a friend than to an anonymous person. This of course will also affect traditional functions like Advertising and Sales Promotion, which still play an important role in the overall communication mix.
Organisational Changes: Wrapping It Up
The final step – with an effective and efficient information system, operated by qualified and motivated staff and an open and honest communication plan – would be to look at changes to the organisational structure.
If you ask why this step comes last, please realise it should be clear that all other aspects are operational on a short-term basis. It is much easier to implement a plan and see results in Information Technology, Human Resources and Communication than it is in the organisational structure. Once this problem is being tackled, changes will be more far-reaching and often highly visible, with great impact on the organisation in general.
If you think of embarking on 5 before point 1 – 4, I recommend it only in emergency situations where it is better to amputate rather than apply a temporary fix. By following the steps as described above, you create a sound foundation for organisational adjustments which is far easier to implement and control.
Conclusion
Make absolutely sure that nothing stands in your way towards total customer management. Make sure there are no communication and role responsibility problems. Flatten the structure as much as possible and get your managers back on the floor to actively serve your customers. Gather information on a marketing database and be equipped with powerful analytical tools. Train your staff in the new philosophy and on the new information system. Encourage them to use it as often as possible. Review your promotion policies and reward systems. Make your organisation strong inside so that it can use surplus energy for external marketing activities. Train, learn and be flexible.
Real relationship-building may pay off only after two to three years – it is definitely no “quick fix”. Nevertheless, a general orientation towards direct marketing principles will result in quick and measurable results; but sending out a few mailings does not necessarily build a lifetime relationship – which should be the ultimate aim of any organisation.
Finally, you will have noticed that Database Marketing is not just a piece of software with campaigns to generate information. It is not an isolated part, but will rather form the core of your business operation. It affects and is being affected by other areas; that’s why you’d rather make provisions for them, too. It will save you money, increase profits, reduce stress, interdepartmental conflict and much more. Database Marketing in itself is a very simple and straight-forward concept. The successful implementation depends on the ability of the organisation to learn and adapt quickly – flexibility and creative organisational thinking being essential parts of the process. Ultimately, it rarely depends on anything but people.
