The rise of enterprise database marketing

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David Williams, Merkle.JPG
David Williams, Merkle.JPG

Database marketing (DBM) is quickly evolving in relevance from a direct marketing tactic to an enterprise-level business process and strategy that delivers improved marketing ROI. Only a few years ago, most organizations did not have a global leader of DBM and most database marketers did not even have direct access to the CMO. Now, CMOs and key executives are recognizing the true value of DBM across the organization.

In 2008, this trend will accelerate as the DBM function demonstrates real value in improving AOI. Most CMOs are now looking toward the quantitative discipline to not only provide insight and answers to important marketing questions, but also to find concrete business solutions to grow revenue and improve profitability.

The successful enterprise database marketer of the future must have a broad perspective and wide-ranging abilities that include areas such as promotion, pricing, product development, promotion channels, sales, measurement, media, and technology. The key to organizing these disciplines into a unified whole will revolve around a complete understanding of the customer life cycle.

This customer-focused approach should be the new playground of the DBM organization. In today's information-based world, both companies and consumers are gaining access and control at an accelerated pace. Managing behaviors to maximize both revenue and profitability is the new challenge of marketing — not media fragmentation, message clutter, social media or blogs.

For this transition to happen, the DBM organization needs to step up and take immediate ownership of two critical enablers of effective customer management: enterprise segmentation and marketing measurement. Without an effective segmentation strategy to drive investment, product and service development, media and channel mix and pricing strategy, true customer-centric marketing cannot occur. Once a segmentation strategy is in place, an effective enterprise measurement process must also be deployed across the customer lifecycle — from acquisition to retention and cross sell — in addition to the more traditional measurement of customer value, media effectiveness, customer experience, brand relevance and program and campaign performance.

Too many database marketers view segmentation and measurement too narrowly to be relevant to the C-suite. With direct response roots, many database marketers don't believe that mass media measurement or even attitudinal segmentation can even be performed effectively. This mind set will need to change to meet the needs of the CMO as pressure continues to build concerning marketing accountability.

Database marketing has a clear opportunity to seize the day by being the go-to partners of the CEO, CMO, CFO and business unit leaders. We have the chance to optimize the critical intersection of both brand and customer marketing to maximize invested capital across the sales and marketing enterprise. Building a models to do direct mail targeting and campaign optimization is no longer enough to create competitive advantage; driving relevance, optimizing investments and exploiting market conditions using facts and behavioral insights will be the new competitive playground.

 (This article appears in the 2008 edition of the Essential Guide to Lists, Database Marketing and Data Services.)

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