Database Marketing Strategy: No “Black Boxes” Allowed

This article is the first in a series on database marketing strategy by Scott Cone, vice president of professional solutions for Lanham, MD-based database solution provider Merkle. The series will outline an approach to understanding the details of building a world-class database marketing system, regardless of whether you are an expert in analytics or technology.

As marketing and technology have become more complex, many marketers continue to view database marketing as a “black box”–something whose function is understood but whose inner workings are unknown. The majority of marketers who are receiving substandard results from their database marketing efforts make the assumption that database marketing is too difficult to understand or change. In fact, most marketers know when their database marketing efforts are not producing optimal results–they just don’t know what to change.

The options available for executing database marketing today vary, from 30-year-old basic technology to real-time systems connecting multiple channels. Using those systems, marketers can select a target audience based on basic RFM (recency, frequency, monetary value) or a multitude of modeling techniques. Because of the plethora of options, many marketers simply ask their vendor to do what is best.

But instead of leaving the details for others, marketers should work toward obtaining a detailed understanding of their current database marketing capabilities and develop a strategic plan for developing processes and systems that provide optimal marketing leverage.

The first step toward developing a world-class database marketing capability is to create an inventory of current capabilities and a roadmap of the potential impact of database marketing on one’s business. By understanding the effect of current capabilities and the potential impact of these changes, a marketer can then prioritize and invest in the changes that will provide the best return. (Next month we’ll look at this in greater detail.)

Once you gain an understanding of your strategic options and priorities, you need to have a thorough understanding of basic database marketing management processes. Then you can work with internal and external resources to develop a more effective capability.

Future articles will review these processes, which include analytical management, content management, data management, campaign management, and performance management.

Based on a strategic approach to database marketing and a strong understanding of the underlying database marketing systems, you can weigh how to evolve your internal and external resources into an effective organization.

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