Why Marketing Databases Fail
The die is cast before the first query runs. "A marketing database is only a tool. As such, it's not a panacea," points out Bernice Grossman, president of DMRS Group, a New York-based database marketing consulting firm. No matter how much money is invested or how many hours it takes to build, a database is only good if it is used.
A database needs to be efficient for what you need it to do. Because different users have different needs and requirements, "you have to build it with an eye for how it will be used," explains Cyndi Greenglass, president of World Marketing Integrated Solutions Inc., an integrated marketing and database consulting firm based in Burr Ridge, IL.
This requires the involvement of a user group to detail the data it wants and the functionality it needs. "Functionality is critical," says Grossman, "Data can be filled in, but if the database can't do what the user wants and can't display the 'answer' in a way the user finds 'friendly,' the task gets relegated to IT, and marketing loses power … and goes back to being just another user in the queue. User-friendly functionality puts access to data on the desktop of the marketer."
Success starts at the beginning
Begin by creating a list of objective and quantitative business questions. By doing so you will learn about the data elements you have and the functionality required of your database, says Grossman.
Then, determine what action you are going to take once you have that information. "Get users to say what they are going to do with the database and show how they will derive value from the tool," suggests Greenglass. For example, what promotions would they do and what would they stop promoting if results were proven marginal?
"ROI is realized based on the delta of what you would do differently based on the new intelligence compared with what you did before," adds Greenglass. "You have to look at potential lost revenue opportunities you will miss through previously under penetrated or under promoted pockets. How much opportunity have you missed? What programs can you implement to reactivate customers or how can you increase your share of wallet by getting underperforming customers to increase their dollars spent?"
Including the marketing personnel who will ultimately use the database is critical. One of the biggest reasons why databases fail, says Grossman, is that most users don't test the user access tool before they decide who is going to develop and design the database.
"Speed isn't an issue. Most users find [the database] isn't as easy to use as the designer says it is," she continues, noting that if users can't figure out what they need to do to obtain answers to their marketing questions, the database won't be used.
Success is an attitude
Another part of the problem, adds Greenglass, is that "marketers are too tech-focused and have not addressed the cultural change needed for a successful database marketing program. Having a database won't do anything if you are going about your marketing the same way."
"A database is a tool, but if it was a tool you never used before, you wouldn't just wake up one morning and automatically use it," explains Greenglass. "You have to get users to use it. Figure out what motivators will get them to use it. For example, what was driving the need for it in the first place?"
Looking at something from a customer perspective may be something new and different for a company, elaborates David Schneider, executive vice president of consulting and education at NuEdge Systems, a customer relationship management solutions provider based in Milwaukee, WI.
For a database marketing program to succeed, a company needs to understand the value of a customer and to view its database as an asset. "The shift in mentality required is like moving from a horse and buggy to a motor car," explains Schneider.
Marketers always want more customers, but often do not realize the opportunity in their database, says Schneider. "It costs less to increase their [dollar] spend than to acquire new customers. Too many [marketers] don't drill into what is already there."
Remember, a database is only a tool. It's how you build and ultimately use it that determines the success or failure of your marketing efforts. More often than not, it's the users who fail, not the database.