CRM, Database Vendors on Track Despite Slowing Economy

Companies that sell database marketing services and CRM solutions say it's business as usual despite ever-gloomier economic reports. Still, many are preparing for a downturn in business.

Dale Ingram, a spokesman for Acxiom, Little Rock, AR, likened tracking the economic picture to watching The Weather Channel.

“You see the storm coming, you prepare and brace for the worst, hope for the best and hope it slides around you,” he said. As a result, the company is “watching expenses, focusing on our customers and trying to ride it out.”

Though Acxiom has experienced no problems or major layoffs, Ingram said “we are taking measures to make sure our payroll and head count are in line.”

Richard Hochhauser, president/chief operating officer at Harte-Hanks, San Antonio, agreed.

“In an economy like this one, you are just more careful about how you spend money, and you focus your attention on the things that make us money,” he said. “So, you spend your money in areas of revenue generation. You make more phone calls rather than fly around, for example.”

But, Hochhauser said, “we are very fortunate to be in an industry where the primary mission is to create a return on investment to our clients.”

Like Hochhauser, Deborah Zuccarini, executive vice president and chief marketing officer at Experian, Orange, CA, thinks businesses rely more on database and CRM products when the economy is struggling.

“The products, services and solutions we offer tend to be even more important in a slowing economy,” she said, “because they are focused on helping our clients' communications become more effective, more targeted and work harder.”

Mike Hail, CEO at KnowledgeBase Marketing, Richardson, TX, said that though “we've got dot-com clients that have gone away and filed for bankruptcy, most of our traditional clients are just holding steady. We are not getting gigantic increases, but normal, upward movement. We're moving forward.”

H. Robert Wientzen, president/CEO of the Direct Marketing Association, New York, said the economic picture was mixed.

“There are quite a bit of businesses that are doing just fine, thank you,” he said. “But there are, without a doubt, some businesses that have already felt the effect of the slowing economy and are expressing concern. It's just not a very clear picture.”

Some business-to-business companies selling higher-cost solutions are seeing a drop in business, Wientzen said, and printers and other service companies expect softer second and third quarters.

Wientzen said he does not think there has been an increase in DMers buying customer relationship management systems because marketers have learned that “CRM is not something you do on a whim. It's a major undertaking, and I don't think people are driven to it by the short-term problems we face at this point.”

Cheryl Zatz, director of marketing at The Popcorn Factory, Lake Forest, IL, a popcorn and gift catalog company, said the company's investments in database marketing systems and technology have not changed this year. She also said that despite the slowing economy, “our sales are very close to plan, and our circulation has not been reduced this year in comparison to last year.”

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