Definition of database marketing DM News June 22, 1996

When a prominent national newspaper tells us something, we usually tend to pay attention, don’t we? And, when an authoritative columnist speaks, we are equally compelled to usually believe them. So, when, under these circumstances, we are told that packaged goods companies are turning away from database marketing as a strategy because it’s too expensive it must be so. And, further, when one of those companies named is a mighty brewer, surely we must hoist a glass in gratitude for the enlightenment shed upon us. Mustn’t we?

But, wait. What’s that wee small voice I hear? A murmur of dissent? A whisper of protest? “But, they weren’t using database marketing,” hisses the chorus. “Oh, but they were collecting thousands of names through this really cool and innovative CD-ROM give-away coupon transit contest survey billboard premium promotion they were doing,” rejoins the prominent columnist, “And, you could even enter the contest on the internet. But, then the company was sending out mailings to all those names and found that it was just too expensive and that’s really why they’ve stopped using database marketing.”

In his book, Voltaire’s Bastards–The Dictatorship of Reason in the West, John Ralston Saul in an enlightening chapter called “Life in a Box–Specialization and the Individual” talks about the problems of language in communication “One of the specialist’s most successful discoveries was that he could easily defend his territory by the simple development of a specialized language incomprehensible to non experts”. In other words, is it possible that non-traditional database marketers are not being well-served by the self-styled experts in the field?

If so, is it any wonder then that companies are announcing that they’re stopping using it because it’s too expensive and doesn’t work when they’ve never had help to understand what the terminology “database marketing” really means ? For most, it seems, including our prominent columnist, database marketing is “direct mail” by any other name or as newspapers invariably put it “junk mail”. I wonder if that’s because it has to compete for space in the blue box with the mounds of “junk news”? But, I digress. Back to the point. The point is definition.

What is direct marketing? An interactive system of marketing which uses one or more advertising media to effect a measurable response and/or transaction at any location.

What is database marketing? Database marketing is using the information you have about your individual customers’ and prospects’ actual behaviours and purchases to profitably match the products and services you offer with the ongoing needs and wants of your customers and prospects. If that sounds circular, it is. The success of true database marketing is all about closing the loop…and, further, being able to put profitability dollar signs on the value of doing so. Ideally, this information is all kept in a marketing database, an organized collection of selected data about individual customers and prospects that is accessible and actionable for marketing purposes. It is much, much, much, more than a mailing list even with the addition of a few answers to survey questions!

Recently a large multinational soft drink company announced an exciting new database marketing program where people can collect points every time they purchase the product which can then be redeemed for clothing bearing the mighty drink logo. In the course of this transaction, the customer’s name will be gathered and further exciting and wonderful things will no doubt be coming their way if they will only keep an eye on their mail.

Is this database marketing? The mighty soft drink company seems to think so. Your first reaction might be that it’s just one more creative way to turn an entire customer base into walking advertisements for the product and at the customer’s expense no less?  Or, is it just another slick sales promotion? Or is it just a very expensive way to build a mailing list to which very expensive direct mail packages will be churned out under the guise of building loyalty and customer relationship. Why, then, will I not be surprised when in 12 months or less another solemn announcement is made that database marketing is too expensive and doesn’t work.

All I can say to both the mighty brewer, the mighty soft drink company and their cohorts in consumer marketing is, be sure you know that what you’re announcing because if it doesn’t work as well as what you started doing in the first place your customers won’t let you go back!

 Charles de Gruchy remembers how it was

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