It's no secret that marketing-database implementations have increased dramatically at hi-tech companies. In fact, more than three-quarters of the 287 hi-tech companies polled recently by Harte-Hanks Direct Marketing and the University of Texas are using some form of database marketing to support marketing processes.
The reason is simple: Customer-focused relationship marketing programs have delivered compelling business and marketing benefits. Best-practice adopters of database marketing in the hi-tech industry are using database-driven analysis and promotion to increase revenue per customer, enhance cross-selling efficiency, optimize products and services to unique customer segments and devise successful customer retention programs.
While these benefits are the stuff of customer-focused marketing success, they don't come without careful attention to all aspects of implementation. Case in point: the marketplace for database solutions has responded en masse with campaign management software, data-mining software, report writers and OLAP/ROLAP tools. Such tools are designed to enhance data access and put the data to good use for analytical, planning and campaign-execution purposes. Yet, few database implementers have adeptly managed the central challenges of data re-engineering and continuity management.
Data re-engineering: It's not uncommon for an organization's numerous, operational systems to contain inaccurate and inconsistent data, and processing these disparate data sources for marketing purposes presents some specific technical challenges. In particular, tools and technologies must be applied to:
* Elementize, standardize and verify customer data for enhanced accuracy.
* Match multiple business organizations that are part of a larger organization. The business matching process gives the direct marketer the ability to analyze a consolidated view of the customer, which is critical because of the complexity of business organizations and associated buying behavior within them.
* Improve address data by validating known address elements to directories; verifying or adding nine-digit ZIP codes and postal carrier routes; and matching addresses to census tracts, block groups, metropolitan statistical areas and latitude and longitude.
Tools exist that can re-engineer important operational source systems (call-center databases) at the point of capture. Yet, few hi-tech companies employ them well. Companies such as IBM are using third-party tools to advantage with their internal marketing database, but it's time for the mainstream to apply sound data re-engineering principles to the enterprise-wide database implementation process.
Continuity management: For marketers, the ability to track real-life changes in the customer database is of crucial concern. Without a built-in continuity processing methodology, analysis of direct marketing programs becomes virtually impossible. Constant key identifiers can be created to leverage historical customer and promotional information and tools and processes can be created to detect byte-for-byte changes in any given record to streamline the processing.
Retaining the originally assigned key identifier allows database marketers to retain continuity from update to update and can be maintained for former customers who are no longer active — providing the ability to reactivate these relationships and to measure the success of customer reactivation programs.
An IT and marketing partnership: Successfully implementing a marketing database program inside a large organization requires both marketing and technical expertise and, thus, poses some special challenges. The technical nuances of data re-engineering and continuity management are not typically familiar to marketers. Conversely, IT personnel rarely become experts on the fine points of promotional creation and execution. In other words, there's often a knowledge gap and a language barrier to overcome when implementing a marketing database.
Successful marketing organizations can combat this obstacle by creating a multifunctional role within the organization, sometimes called marketing information systems management. Members are formally trained in both the marketing and IT disciplines. They serve as an important bridge, ensuring that program goals are realistic and that technology solutions to marketing challenges are well implemented.
Yet even marketing information systems oftentimes focus their time and attention on database access and campaign management requirements. Data re-engineering and continuity management are relegated to secondary status and are poorly addressed. To guard against this, we typically recommend performing an in-depth need assessment early in the program process that includes:
* A statement of understanding between IT and marketing outlining goals and objectives.
* A business, operational and technical requirements analysis.
* A high-level solution synthesis for review by both marketing and IT.
* A technical statement of work that addresses data re-engineering and continuity management, as well as database design, access and campaign management.
Leading-edge marketing-database implementations have been managed successfully by many companies in the financial and retail industries, as well as by a handful of hi-tech leaders. The best database solutions — ones that address access, design, continuity and data re-engineering — are enabling hi-tech marketers to manage their customers with intelligence and are driving direct marketing programs with precision. Nothing else is as fundamental and as critical to marketing success.
Thomas Woods is director of business development of hi-tech industry practice at Harte-Hanks Data Technologies, Billerica, MA.
