Are You Equipped?
What Some Companies Have Done
Many companies believe they have to build their marketing databases in-house on their own mainframes. And some have been successful. Kraft General Foods, for example, built its huge customer base on its internal mainframe. The majority of large corporations, however, have outsourced their customer databases, and even Kraft finally realized its mistake and turned to outsourcing. Why is that?
• Few company computer systems are built for marketing. They exist for payroll, inventory, billing or manufacturing. These operations pay the bills and control the data-processing priorities of the company. The marketing department must sit in the dugout when these heavy hitters step to the plate. Marketers soon find they cannot get from the MIS staff the priority attention to their functions that they need to do their jobs.
• In-house MIS staffs seldom have the specialized software and experience needed to do database marketing. Merge/purge, geocoding, statistical modeling, online access, ad-hoc counting and selecting are a few of the tools that are needed for database marketing-and they are seldom available on in-house company computers.
• Most computer operations, like payroll or inventory, are stable systems that run for years without change. Marketing is dynamic. The software requires constant testing, modification, retesting and shifts in approach. The MIS department will not understand having to devote hundreds of hours of program-development time on a monthly basis to your marketing database. "Why can't you guys make up your mind?" often is the MIS team's refrain.
• As a result, it will take you much longer to get your database up and running, and cost you much more to build and maintain your system in-house.
The solution, of course, is to find an experienced service bureau to build your marketing database. If you get the right one, it will have built databases for many others and can bring a wealth of experience to the table. Develop a tight contract that puts you, as the marketer, in control. You will be able to specify and hold your contractor to timetables and quality standards that you could never do with your in-house MIS staff.