Changing economic and demographic trends are forcing companies to re-examine the way they do business.
Today, marketers are contending with declining customer loyalty, miniscule rates of growth, higher marketing costs, and increased competition.
To survive and grow, companies will have to find new, cost-effective ways to market their products and services.
The market leaders of the 1990s will be those companies which know and understand their customers’ needs.
Recognize importance
They are the companies who recognize the importance of maintaining accurate and relevant customer data, understand the need for ongoing analysis, and are prepared to invest the time and money necessary to develop the tools required to manage their business.
These are the companies that readily embrace database marketing technology.
In the final analysis, these are the companies with the ingenuity and creativity to lead them to the forefront of their industries in terms of market share and profitability.
One of the benefits of database marketing is the ability to monitor, measure and analyze marketing programs.
With the right tools, marketers can assess the financial viability of new products, prices, offers and list segments with a minimal amount of risk.
Although the benefits of maintaining a marketing database are well documented, most Canadian marketers still do not have access to existing customer data and/or the necessary measurement tools.
Few retain data
In fact, our surveys indicate that fewer than 25% of Canadian companies retain customer data. The few that do capture customer data, retain name and address information only (a mailing list.)
There are probably only 10% to 15% of Canadian companies that actually have database capabilities and, unfortunately, only 5% of these companies maintain a relational customer database suitable for marketing purposes.
So much for the myth that most Canadian companies have a marketing database.
Equally suspect is the notion that most companies measure their marketing efforts.
Based on our experience, most companies never get beyond the basic response rate, cost per response, total volume scenario.
The bottom line is that many Canadian companies are unable to track even basic marketing programs.
In order for marketers to accurately track customer history, they must have unrestricted access to a relational marketing database.
The database, in addition to providing customer information, must also monitor, analyze and manage the individual marketing programs.
This is a tall order, considering the multiple sources of data and the usual backlog of activity in the mis department.
The usefulness of any marketing database is defined by the design. The basic design must be functional, relevant, accessible, easy to use, flexible, expandable and capable of measurement, reporting and analysis.
The solution of choice appears to be the transfer of customer data onto a pc/pc lan platform. This is one of the few options available that offers the flexibility, control and on-going cost that marketers require.
Although there is often limited database and/or database application experience available within most companies, there are external resources available that can provide the expertise at a fraction of the cost of developing the software in-house.
If there is a moral to this story, it is that Canadian marketers must find a way to convince senior management that a marketing database is an investment rather than a cost.
To compete in the 1990s, marketers will have to pull out all the stops to design, develop and implement a cost-effective marketing database.
Those companies that respond to the challenge will be the market leaders of tomorrow.
The companies that believe that the status quo is the safest bet will be relegated to the scrap heap of yesterday’s giants.
Wayne Morris is president of Toronto-based Marketing Database Solutions, a marketing services company which specializes in the design, development and implementation of marketing databases and database marketing applications.
