Cathy Bond looks forward to the DMA’s conference on database marketing
taking place next week
‘Customer data is the DNA of the organisation. It’s the blueprint for
the customer’s relationship with the brand and it’s right at the heart
of strategy.’ So says Maboob Momen, a managing consultant with the
Merchants Group, which devised the Direct Marketing Association’s 11th
conference on database marketing, taking place in London next week.
The outlook is bright for early adopters of new technology - and new
thinking - initially to locate best profit prospects and then speak to
those customers individually. It’s not surprising, Momen adds, that
companies are keen to see the database written into the balance sheet as
a corporate asset.
This is, after all, flagged as the ultimate tool for making every pound
spent on marketing communications generate a return. ‘Direct marketing
can and must be used to build brands,’ says Garth Hallberg, worldwide
director of differential marketing at Ogilvy and Mather Direct in the
US, who will discuss the theme of his recent book, All consumers are not
created equal, at the conference.
‘For most brand marketers, it’s the case that only a very small group of
consumers really control their business,’ he explains. ‘Direct
marketing can target these, so its principles have to be applied to
general marketing. If we don’t stop talking about above- and below-the-
line we’ll reach the end of the line, in advertising terms.’
The opportunities to define and refine seem limitless. But the rise of
the database, ‘the new marketing paradigm’, is taking place against a
background of technological change which is so radical that balanced
thinking is under threat, according to conference speaker Melanie Howard
of The Future Foundation.
‘There is always the danger, with all this data coming in, of losing
sight of the customer’s heart; the risk of marketers seeing them as
mechanical creatures,’ she says.
It would be ironic, investing money, time and effort to create a complex
web of information designed to feed individuals what database
intelligence says they want, only to find out that the customer isn’t
happy with his part of the bargain at all.
‘I’d like to think that there will be some lessons for organisations
which might have become rather complacent in their drive to establish
loyalty schemes,’ adds Howard. She will be revealing initial results
from a three-year research project, the first stage of which deals with
how people see themselves as holders of information they realise is
critical to the profitability of the companies which sell to them.
‘They know that a growing number of companies are going to want detailed
information about them and that new media means there will be more ways
of getting hold of that,’ says Howard. This has the dual effect of
giving customers a taste of power and making trust the basis of all
But early research, she says, shows that database-savvy consumers might
already be growing cynical. ‘They are aware that companies want the
information, but they don’t think they are getting the right benefits in
It’s clear that the equation balancing rewards against customer
expectations is a complex one. What’s more, no solution is likely to
provide the final answer. The relationship between the seller and the
customer, like the database itself, is dynamic and needs constant
attention to protect the fundamental bond of trust.
One aspect of this is privacy. While it is unlikely that a company would
overstep the mark in extracting and using personal information, where it
isn’t actually illegal there’s still the risk of losing the goodwill of
the customer. Care and vigilance is essential as database marketing
begins to spread through new media.
‘Direct marketers should be broadly familiar with the rules of the
game,’ says Elizabeth France, the data protection registrar. ‘However,
changing technology means that we have to stay on the alert. We need to
cope with media such as the Internet. The law is not technology-
specific: there is the same requirement to disclose how information will
be used when it is obtained. But consumer awareness of this is
At the conference, she will underline the fact that while it is simply
not in the interests of marketers to act irresponsibly, the sheer pace
of change could force errors. ‘We are concerned about the amount of
data that retailers, for example, are picking up via customer clubs. If
people want to sell their privacy for Air Miles, that’s their privilege.
My job is to make them understand that’s what they’ve done, so they go
into it with their eyes open,’ she says.
Her concern about online marketing communication is shared by the Direct
Marketing Association, which is already looking at ways to regulate
unsolicited e-mail. Techno-gurus of direct marketing, however, would
dismiss electronic junk mail as unbelievably crude: in their world, even
the sophistication of super-refined lifestyle databases falls short of
Take Firefly Network, a Boston-based company set up last year to sell
over the Internet using intelligence agents: software which, in essence,
uses the data it has acquired on individuals to judge which messages
will be sent to those people.
‘It builds communities of like-minded consumers via the Internet,’
explains Saul Klein, Firefly vice-president, who will be revealing
Firefly’s various applications. ‘Consumers control the kind of data
they receive and businesses can prioritise the information they send.’
Meanwhile, Shikhar Ghosh, chairman of US Internet company Open Markets
predicts that online systems will overturn the traditional role of the
middleman in the marketing chain. In theory, retailers on the Net offer
only what is relevant, at prices reflecting their freedom from expensive
overheads, such as property and staff.
‘With the ability to customise services at every level, the marketer on
the Internet can for the first time target economically a segment of one
person - and that person can interact,’ says Ghosh. He will be
highlighting examples of this technique in practice at the conference.
The issues facing database marketers, says Momen, ‘have set the agenda
for the next decade. We’re beginning to see the impact of new media, and
an empowered consumer. Companies have new tools for managing the
dialogue with customers. How they do this will be the very essence of
The DMA’s 11th Database Marketing Conference will be held at the QEII
Centre, London on Tuesday November 26. Details from Johanna Higgleton on
0171 321 2525
This article was first published on Marketing