expanding the role of the direct marketing database

MARY LOU ROBERTS

Expanding the Role of the Direct Marketing Database MI? LOU ZOBERTS is chair of the marketing depattmenr at the University of MassachuseXs/Boston. She holds a PhD in marketing from'the University of Michigan. !4er current research interests center around dirm marketing. data. based marketing. and the impact of information technofqy on marketing organizations and activities. She has pub- lished in a variety of marketing and management journals She is co-editor of Marketing to the Changing Rousehold and ceauthor of Direct Markering Management: Text and Cases. She is currenrly at work on a bcok on sales lead management systems

MARY LOU ROBERTS

ABSTRACT The direct marketing database of customers and prospects has from its inception been recognized as critical to the success of tactical activities such as promotional and customer service programs. This article argues that there are numerous other programmatic deusions that can be improved by analysis of the database. Further, it argues that the most effective use of a database extends beyond tactical exercises to strategic marketing decisions. A hierarchy is presented that can guide managers toward more powerful and more integrative uses of the database resource in planning and execur- ing databased marketing activities at both the tactical and strategic levels.

Q 1992 John Wiey & Sons. Inc. and Direct Marketing EducatiOml Foundation, h c . CCC os92~0591/92/02051~10~.00

JOURNAL OF DIRECT MARWING VOLUME 6 NUMBER 2 SPRING 1992 51

Direct marketers have long recognized the power of their databases of customers and prospects. Re- cently we have seen many general marketers using a multitude of techniques to capture customer and prospect names for databases of their own. Infor- mation from a database allows any marketer to communicate in a direct and meaningful fashion with precisely targeted customers. In business and high-ticket consumer goods markets it offers the prospect of making expensive personal sales calls more productive. There is little evidence, however, that databased marketers have fully realized the potential of their databases for supporting managerial decision making and strategy development.

The trade literature abounds with descriptions of specific targeted direct-response programs, and both trade and academic literature often describe sophisticated list segmentation models. Both types of activities have a common underlying purpose: to improve the profitability of individual direct-response programs. Neither, however, tends to look beyond the planning and execution of specific programs at the longer-term strategic implications of the information that can be derived from the database.

OBJECTIVES

This article argues that the customer/prospect database can be used productively to support a broader range of marketing programs and decision-making activities than are now in place in most organizations. I t presents a number of definitions and con- cepts that help organize current knowledge about databased marketing and suggests ways in which current applications can be extended.

Specifically, this article will:

1. Develop a formal definition of databased marketing that applies to both the direct and general marketing environments.

2 , Present a framework for thinking about the full range of uses of the customer/prospect database.

3. Propose a conceptual model of database use within the marketing organization that en- compasses the development of information

systems to support managerial decision making. The ultimate objective of this discussion is to encourage databased marketers to develop a broader and more strategic perspective on the use of a key resource-their database of customers and prospects.

A Definition of Databased Marketing There is currently no formal definition of databased marketing as it is currently practiced anywhere in the literature, although direct marketers appear to have a common understanding of the term. The definition proposed here is a distillation of both what can be understood from the literature and the per- spectives of many practitioners. Although broad, it specifically excludes much marketing research activity as well as many other marketing management and support activities.

The proposed definition is:

Databased marketing is the application of statistical analysis and modeling techniques to computerized, individual-level data sets. I t is used to support the development of cost-effective marketing programs that communicate directly with identified customers and prospects, and to track and evaluate the results of specific promotional efforts. Databased marketing implies planned communication with individually targeted customers and prospects over an extended period of time to promote repeat purchases of related goods and services.

There are a number of important aspects to this lengthy definition. First, it specifies statistical models which can be produced only by in-depth quan- titative analysis. A firm that has a computerized mailing list, no matter how large or how small, and simply mails (or possibly telephones) the entire list at regular intervals is not practicing databased marketing.

Second, the data is collected and maintained at the individual level. This may be the individual customer, household, or business entity. The impli- cation is that analysis is performed and marketing programs are planned and executed at the individual level.

Third, the existence of a database enables management to track and evaluate the effectiveness of each customer/prospect contact. This provides input to numerous managerial decisions including product selection, pricing, segmentation and tar- geting, and media and vehicle choice.

52 JOURNAL OF DIRECT MARKETING VOLUME 6 NUMBER 2 SPRING 1992

Finally, databased marketing should be viewed as an investment in relationship building. This is true whether the served market is business or consumer. A carefully planned program of marketing communications-with appropriate content and timing-can be used to acquire new customers; to gain repeat purchases from existing customers; and to cross-sell, upgrade, and otherwise promote the sale of substitute and complementary products.

This definition captures the essence of databased marketing as currently practiced by most direct marketers. The next section will suggest a broader perspective that extends the number of areas in which customer/prospect data can be of value.

Uses of the Customer/Prospect Database for Marketing Operations It is helpful to divide the discussion of database use into two categories: marketing operations and managerial decision making. The first is straightforward and well understood by established direct marketers, so i t will be briefly summarized in this discussion. The uses that can be made of the customer/ prospect database in supporting managerial decision making and strategy formulation have not previously been discussed in a systematic fashion. They will be covered in more detail.

There are four generic uses of a customer/prospect database that can be abstracted from descriptions of actual databased marketing programs. They are to: solicit sales, qualify and track sales leads, provide sales support and customer service, and manage customer relationships. These functions are detailed a s follows.

TO SOLICIT SALES. Databased marketing was born when firms recognized that the computerized data from sales transactions and other customer contacts could be used to make future marketing programs more profitable. They subjected their customer data to statistical analysis that eventually led to sophisticated segmentation models. These models al- lowed them to offer a given product or service only to those members of their customer and prospect base who had an acceptably high probability of pur- chasing that particular item.

TO QUALIFY AND TRACK SALES LEADS. Business marketers and some marketers of high-ticket consumer goods and services frequently embark on di-

rect-response programs to generate sales leads for their field sales forces and dealers. An effective sales lead system includes measurable lead generation activities in various promotional media, prompt and accurate fulfillment of inquiries, telephone qualification, allocation of leads by quality between various types of customer contact mechanisms including the field sales force, and tracking leads through to completion of the sale. The customer/prospect database is a central feature of all aspects of a closed- loop sales lead management system.

TO PROVIDE SALES SUPPORT AND CUSTOMER SER- VICE. As commonly used, the term sales support implies activities that assist the field sales force in making the sale. In the databased marketing environment these activities include development of support communications such as brochures and manuals, lead qualification and followup, seminars and trade shows, and implementation of interactive electronic technologies to support the inside or outside sales effort.

The term “customer service” implies helping customers solve problems. The database offers a powerful mechanism for activities such as more rapid fulfillment, order tracking, and provision of consumer information and technical assistance.

The dividing line between sales support, sales, and customer service is blurring as field salespeople a re provi.ded with direct access to marketing databases via their portable personal computers.

TO MANAGE CUSTOMER RELATIONSHIPS. Relation- ship management implies continuing contact with customers between (or perhaps in many consumer applications, independent of) sales cycles. In psy- chological terminology, these contacts could be described as reducing cognitive dissonance or providing reinforcement.

N o one has yet attempted to catalog all the activities that might be considered relationship management. Quite possibly this listing would include the activities just described as sales support and customer service. Certainly it would include all types of informational contacts that do not directly attempt to make a sale. Examples include product updates, descriptions of new applications of existing products, testimonials from satisfied customers, ed- ucational seminars, and so forth. Trafk-building

JOURNAL OF DIRECT MARKETING VOLUME 6 NUMBER 2 SPRING 1992 53

communications from retail stores also fit into this category.

Obviously, the customer database makes it possible to identify customers who should receive each type of communication. It also makes it possible to customize the communication to the particular individual. Skillful use of the customer database de- creases the quantity of irrelevant messages and increases the overall quality of customer communication.

Uses of the Customer/Prospect Database for Management Declslon Maklng The operational perspective is the one typically taken in discussions of databased marketing. It is true that sales, support, and service activities alone would justify the existence of a database in many organizations. In addition, there are many ways in which the same database can support managerial decision making. This section will look at decision support in two ways; first from a functional perspective and then from a systems viewpoint. In this discussion it is important to keep in mind that the

term “decision support” is being used very broadly and does not necessarily imply a formal decision support system.

The Functlonal Perspectlve The direct marketing database can facilitate more types of marketing programs and a broader array of analyses than those implied by targeted sales and support activities alone. It is useful to look at the possibilities in terms of each of the four major marketing decision variables plus other functions car- ried out by databased marketers. It is also helpful to attempt to classify the relevant activities and programs as short-run tactical endeavors or longer-run strategic initiatives. Table 1 presents an overview of the results of this analysis.

PRODUCT. A database that is flexible enough to permit various ways of looking at the data can provide information for both product management and product strategy. Product managers can analyze sales by product or product line. Sales can be broken

TABLE 1 Uses of the Customer/Prospect Database

Marketing Mix/ Function Variable Tactical Strategic

Product

Price

Promotion

Channels

Customer Acquisition

Customer Service

Sales Force

Customer Relationship

Marketing Research

Maintenance

Analysis [sales, margins. by product line,

Price sensitivity by product, market segment Price incentive program planning

Program evaluation by medium, vehicle Promotional program planning

Targeted promotion to dealers Co-op manufacturer/dealer promotion to

prospective customers/customer base

Profile customer base/outside database overlay Oualification/sales programs from leads

On line access to data by service reps Faster. more accurate order processing and

Profitabili ty analysis by terntory/rep Lead generation and tracking programs Rep access for service and scheduling

Special promotions to customer base

region, etc J

fulfillment

Tightly controlled samples; higher response rates

Trend analysis for forecasting and product development

Pricing relationships across product lines

Promotional effectiveness by medium

Channel/dealer effectivenss

Increase profitability of customer base

Analysis of contacts, satisfaction levels

Productivity programs

Non-sales communications

Combine survey with internal and external databases for analysis and modelinq

5 4 JOURNAL OF DIRECT MARKETING VOLUME 6 NUMBER 2 SPRING 1992

down by region or by industry or in many other ways to support a variety of managerial analyses.

A more strategic use of product movement data is in trend analysis. When several years of product history have been accumulated in the database, analysis which had previously required considerable effort in gathering and computerizing data becomes relatively easy. Managers are then encouraged to look at the data in a variety of ways. It is especially valuable to analyze trends by market segment after having categorized the segments as growing, stable, or declining.

Managers should recognize two distinct issues in this analysis. The first issue is the size and growth pattern of a segment of their own database. Catalog houses, for example, have long built their portfolios in this manner. They have added a new specialty catalog when sales of an identifiable product line in an existing catalog established that a separate catalog could be supported.

The second issue is the size of the target segment in the general population. Some high-ticket consumer electronics catalogs which have suffered re- cently could be faulted for not recognizing that their customers were changing. Among other things, members of their customer base were starting late- in-life families and watching a recession decrease their buying power. It is doubtful that any level of customer acquisition activities could make up for such a sea change in an underlying consumer population that was heavily represented on a particular database.

PRICE. The ability to isolate markets for testing of price alternatives is an important feature of databased marketing. This greatly improves management’s ability to make correct pricing decisions. It also generates data that permits analysis of price sensitivity by product and by market. This in turn provides information for targeted price incentive programs.

In many instances price incentives can be offered only to customers who represent incremental business and withheld if the incentive would only result in decreased margins. Multi-line consumer product marketers have begun to use this approach to increase the effectiveness of couponing programs. They build a household-level database that contains product use by brand for a large set of their products. Coupons can then be directed to users of compet-

itive brands and withheld from loyal users of the marketer’s own brands. By involving multiple products, this approach also makes database development cost effective in an environment where no single product’s margin is sufficient to support it alone.

Historically it has been very difficult for marketers to gauge price sensitivity on single products or within a single product line, much less across product lines. The rich data in detailed customer purchase histories makes it possible to analyze price relationships for multiple lines. Long-term pricing strategies, including strategic approaches to price incentives, can then be based on solid information.

PROMOTION. Evaluation of promotional programs has been a foundation of databased marketing from its beginning. Direct marketers are able to identify each promotion so they can attribute every response to the specific advertising placement or activity that generated it. In this way the results of each adver- tisement can be evaluated. Resources can then be directed to profitable programs, media, or vehicles, and unprofitable ones can be eliminated.

In recent years many general marketers have supplemented traditional mass media advertising with direct-response promotions. They have used the responses to build databases. The general marketer can then engage in targeted programs, just as direct marketers do, that generate measurable sales or sales leads and add more data to the database. They can also use media more efficiently and cre- atively. The Buick Division of General Motors re- cently purchased magazine advertising by zip code in a number of publications. According to a spokes- person for their agency, McCann-Erickson, “Buick has been the prime user of the agency’s proprietary McMapping database program developed last year to explore lifestyle, demographic and media usage information about specific target audiences” (3). Such combinations of a firm’s own customer profile data and powerful outside databases offer important opportunities to improve both the efficiency and effectiveness of promotional programs.

These tactical activities are leading to major changes in promotional strategies. General marketers are becoming more interested in trackable media and many marketers are attempting to inte- grate all promotional activities including field sales calls. The ever-increasing ability to target, track, and

JOURNAL OF DIRECT MARKRING VOLUME 6 NUMBER 2 SPRING 1992 55

customize is also leading to greater emphasis by both types of marketers on relationship management as opposed to one-shot promotional efforts.

CHANNELS. Although they are not traditional direct marketers, many firms that sell complex, high-ticket items through retailers, dealers, or distributors have adopted direct marketing techniques to support their channels. Some programs involve dealers using manufacturer-supplied programs to communicate directly with their customers. Manufacturers can also communicate directly with the end user to build retail store trafiic or to provide sales leads for the dealer or distributor’s sales force.

When the manufacturer can communicate directly with the customer/user of the product, the strategic balance of power in channels is dramati- cally affected. In consumer packaged goods, channel power tilted toward retailers when scanner data became available. The recent emphasis by consumer packaged goods manufacturers on developing their own ultimate consumer databases and im- plementing targeted promotions may be redressing that power imbalance.

Another kind of turbulence in channels-the wave of retail acquisitions and mergers in the 1980s-led Anne Klein I1 to establish a toll-free number for customer questions about product availability and general fashion advice. The resulting database allows Anne Klein I1 to provide better customer service, communicate directly with identified customers, and support their retail stores with traffic- building communications (1).

Less visible but equally important is the business marketer’s ability to communicate directly with end users to evaluate the effectiveness of dealer relationships with their customers. These abilities can be used to prune ineffective channels or interme- diaries and to develop programs based on experi- ences with the most successful ones. One manufacturer that has strong sales in OEM markets has used its database to keep track of all sales, even though many of the items have been sold through dealers and/or incorporated into another manufacturer’s equipment. They can not only analyze channel effectiveness but also can sell supplies directly to equipment owners.

These are powerful strategies that must be used with care. Anne Klein I1 is developing its programs

to support, not to compete with, its retailers. The business marketer must exercise great caution not to antagonize OEM customers and channel members.

CUSTOMER AcauisiTioN. When an existing customer base-whether business or consumer-is analyzed, the 80/20 rule invariably applies. The challenge in acquiring new customers is to find more who resemble the current 20 percent (or fewer) who provide 80 percent (or more) of the business. The existence of a detailed database makes this task much easier.

Though the implementation differs slightly in consumer and business markets, the general prin- ciples are the same. The customer base is seg- mented, and the most profitable segments are pro- filed. With geodemographic information about the most valuable customers in hand, the marketer turns to suppliers of outside lists and databases. The profile data is used to specify the types of names one wishes to rent from a given list or the types of zip or SIC codes into which one wishes to promote. These prospects are then contacted to solicit sales or generate sales leads.

Segmentation of the customer base provides useful information for guiding the strategic rnar- keting direction of the firm. Profitable segments can be emphasized. Segments that are expected to grow rapidly can be targeted. If analysis reveals that important market segments are underrepresented in the firm’s customer base, the firm’s marketing strategy can be modified to incorporate them.

In some instances this type of analysis may dictate a change in strategy. Spiegel, for instance, was successful in a major shift in strategic direction. This involved repositioning its catalogs and attracting a more upscale customer base. Other old-line catalog operations went down still clinging to their existing customer bases and general merchandise catalogs.

In other instances the change will be more incremental. Financial services marketers, for example, have used data about consumer income and credit history in screening databases for prospects. One consultant points out that “a lot of credit-wor- thy people . . . fall through the cracks because of something relatively minor in the criteria set. Young people and young families, for instance may not have established a credit history. . . or empty-nes-

56 JOURNAL OF DIRECT MARKETING VOLUME b NUMBER 2 SPRING 1992

ters, who haven’t relied on credit in the past but are spending more money now, won’t pass a standard credit screen” ( 4 ) .

CUSTOMER SERVICE. The virtues of automated order entry, processing, and fulfillment systems include increased speed and accuracy in filling customers’ orders. When customer service representatives, working on toll-free telephone lines or with portable computers in the field, have access to this data, customer service can also be greatly improved.

Automating these activities provides data for evaluation of the customer service function. Data on number of contacts and time to resolve each can be produced by the system itself. Call report data can add nature and source of complaint or query. These data allow firms to pinpoint, and hopefully remedy, sources of customer dissatisfaction before they are reflected in marketplace results.

Providing knowledgeable and timely customer service is critical to maintenance of long-term customer relationships. Firms should recognize customer service as a key strategic decision variable, on a par with the traditional “4 Ps” of marketing, and allocate both the quality and quantity of resources necessary to support effectiveness. The database of customers and prospects plus a database of customer service contact detail are key resources needed to achieve excellence and productivity in customer service.

SALES FORCE. The database can also be a valuable tool for supporting and managing the field sales force. Having a customer’s complete purchase history allows the salesperson to promote appropriate products and not waste time presenting inappro- priate ones. It also permits better scheduling of sales calls. Customer contact entries in the database provide details about direct mail and telephone communication with the customer that foster integration of promotional activities and prevent the salesperson from appearing uninformed in the eyes of the customer.

Management can also use these data to analyze results by salesperson and by geographical area. Many companies have included electronic mail and call reporting in the system that provides access to the database. This speeds communication between management and the field and, properly used, can

increase both the quantity and quality of customer and competitor data collected from the field sales force.

An inside sales force depends on a smoothly functioning database for much of its effectiveness. Just as customer service personnel need online access to the database, so do inside salespersons. Their contacts, in terms of both timing and content of calls, are guided by information from the database. An inside sales operation of even moderate size re- quires a computerized telephone system. This system makes available data for monitoring and analysis of the effectiveness of salespersons and marketing programs.

The major strategic concern with regard to the sales force is to make this vital but expensive resource more effective. A customer/prospect database is a key element in an automated system that will increase overall salesforce productivity without decreasing customer service or satisfaction.

CUSTOMER RELATIONSHIP MAINTENANCE. Main- taining close ties with customers is important at any time but especially so between sales cycles. The ability to contact customers directly with product or servicing information or to offer a special promotion makes relationship maintenance easier. The database offers the option of making the contact by mail or telephone instead of through the field salesperson.

When customer contact programs are carefully planned, timed, and managed, they are seen as beneficial by the customer. Newsletters with useful content, seminars, and training programs are value- added elements that build customer loyalty and erect barriers to competitive entry.

MARKETING RESEARCH. Some aspects of traditional research are being supplanted by databased marketing activities. The ability to collect, purchase, and use data as part of the sales or consumption process, for example, removes the necessity of col- lecting these data after the fact with all the attendant problems of reliability and validity. While the be- havioral data that is the stock in trade of databased marketing is extremely valuable, it does not pre- clude a need for attitudinal data which must still be collected by more traditional means.

The existence of a customer/prospect database


makes it possible to develop a tightly controlled sample for such studies. An existing relationship between marketer and customer also tends to make response rates higher. This data from a sample of customers can be integrated into the existing database. It greatly increases the richness of the data available for analysis, but it has the disadvantage of covering only a portion of the customer base. This disadvantage can be overcome by using information from outside databases to permit the attribution of data to non-sampled customers.

The combination of purchase history with survey research data in a single database results in easier data access. This encourages in-depth analysis and modeling efforts that can provide more worthwhile strategic guidance than either type of data used alone. It can also provide, for companies that previously relied solely on mass media, the opportunity to develop targeted marketing programs. For a number of years tobacco companies have been using a multitude of promotional methods to capture the names and addresses of smokers. RJR Nabisco added information to its fledgling database by send- ing out as many as 80 million surveys per year to obtain tobacco purchase behavior data as well as data on use of various household products ( 2 ) . The databases of the tobacco companies are now potent competitive weapons, and they could become even more crucial in the future if mass media advertising is further restricted.

The database of customers and prospects does provide a rich source of data for many aspects of marketing management. The very existence of the data, combined with easy access and manager- friendly interfaces, encourages analyses and eval- uations that are simply too difficult and time-con- suming otherwise. Ease of access to customers also tends to encourage small-scale experimental marketing programs that could not otherwise be executed. All this activity stems from a single database, but it does so in a variety of different ways. This also makes it beneficial to look at databased marketing from a systems perspective.

The Systems Perspectlve Looking at databased marketing from a systems perspective is worthwhile for two reasons. First, it broadens our view of the ways in which a customer/ prospect database can be used by direct marketing managers. Second, it begins to bridge the gap be-

tween existing discussions of databased marketing and marketing information systems. A database is necessary for model validation and for implementation of information systems, but these issues are usually treated separately in the literature. Figure 1 presents a systems hierarchy adapted from a commonly used Management Information Systems concept.

OPERATIONS. The use of the customer/prospect database to drive targeted marketing communications programs and to provide customer service has already been discussed in some detail. As an additional asset, data-driven operations provide, virtually as a byproduct, detailed information for purposes of reporting and control.

SUMMARY REPORTS. These standard reports are the backbone of middle management evaluation and control of marketing operations. They include sales reports by product, region, sales territory, and sales representative; promotional activity by time period and by medium; customer service contact reports; and many others.

Linking report generation to the operations database has three major advantages over off-line reporting. The first advantage is immediacy. Data is available as soon as it is produced-allowing managers, for example, to review the previous day’s sales

Decision Support

Stand- Alone Models

Summary Reporting

/ \ Operations


reports the following morning. The second advantage is data quality. Since it does not have to go through numerous data preparation and entry stages-and since there are fewer databases con- taining the same data-there are fewer chances for errors to creep into the data. The third advantage is jlexibility. Reports can be produced either period- ically or on demand. Hard copy can be routinely generated or reports can be stored on the system for retrieval as desired. Managers increasingly prefer on-demand retrieval from the system with hard copy available upon request. This overcomes the potential disadvantage of huge quantities of rarely used reports being generated simply because the data exists.

MODELS. Models of specific marketing phenomena such as brand switching, market segmentation, or sales territory allocation have long provided useful guidance for general marketing managers. Many direct marketers have sophisticated list segmentation models in place, but few appear to have developed other types of models, such as pricing models, that could improve the quality of decision making. The direct marketing database is a rich source of data for model development, validation, and use. It is another area in which readily available, easy-to-ma- nipulate data encourages experimentation and in- sights that would have been unlikely to occur otherwise. Even simple spreadsheet-based models can provide powerful and timely input for management decision making.

DECISION SUPPORT. When a set of stand-alone models or at least a knowledge of response functions has been developed from the database, a firm has two of the critical elements needed to build a decision support system. The virtues of marketing decision support systems are also well known, but there is evidence that few marketers have developed integrated decision support systems.

STRATEGY SUPPORT. Strategy support systems are not yet a reality, but the general outline of such a system can be envisioned. Building true strategy support systems will require integration of several types of data and modeling of their complex inter- relationships. The customer/prospect database will play an important role in formulating strategy support systems, but other types, such as financial and

competitor data, will also be necessary. Strategy support systems represent the apex of a hierarchy of information systems that support ever more complex marketing management and strategy decisions.

The hierarchy suggests that firms that recognize the full potential of their databases will move through an identifiable progression, developing increasingly complex information systems with broader organizational impact in each stage. The steps may or may not be this clear cut, but the next few years will certainly see databased marketers developing even more sophisticated models and in- corporating some of them into decision support, and later strategy support, systems. They will enjoy many competitive advantages as a result.

Advantages of Expandlng the Concept of Databased Marketlng to Include Information Systems Direct marketers who expand their use of customer/ prospect databases and develop powerful models and decision support systems will reap benefits that can make significant contributions to competitive advantage. Some of the benefits are already being realized in most established databased marketing operations. They include:

Ability to identify the most profitable customers by carrying out individual-level analysis and modeling kfforts.

* Capacity to track and evaluate the effectiveness of specific marketing programs. - Facility to identify the most promising prospective customers.

More integrative, and therefore more strategic, uses of the database are less common. Benefits of these uses include:

- Ability to develop information systems that support an array of operational activities and management decisions.

* Ready availability to all managers of complete, reliable, and up-to-date customer information. Capacity to achieve the highest return on investment from an existing customer base.

* Potential to redirect the growth of the customer base into more profitable segments. - Ability to develop on-line/on-demand query, reporting, and decision support systems that


are perceived as genuinely useful by marketing managers. Prospect of developing genuine strategy support systems.

CONCLUSION

This article has proposed a two-part conceptual framework for databased marketers to use in achieving maximum benefits from their databases of customers and prospects. One aspect of this approach is to look at each functional or programmatic area of marketing and sales from both a tactical and a strategic perspective. This can reveal additional operational uses of the database that would be valuable to the organization.

The second aspect of the framework is a hierar- chical, systems-oriented perspective. This portion of the framework encourages databased marketers to extend the uses of their databases beyond operations and specific promotional programs. They can do this by developing analytic models and in-

tegrated information and decision support systems that exploit the full potential of their databases. It is reasonable to expect that the direction of these systems will be determined by the marketing functions or activities that represent key success factors in the developer’s industry.

The marketing environment is increasingly crowded and competitive. In this unsparing environment the databased marketers most likely to be successful will be those who earn the greatest return on their investment in marketing information. Learning to think strategically about the database resource is one important step in that process.

REFERENCES

1. Mclnerney, Lori (19911, “Marketing with Style,” Inbound/ Outbound, March, 12-15. 2. Saratin, Raymond, and CIeveland Hoaon, (19911, “Euick Ads Target ZIP Codes,” AdvertisingAge, April 1, 1, 36. 3. Rapp, Stan, (19891, “RJR vs. Philip Morris: The Battle of the Databases,” Direct Marketing, September, 96. 4 . “Smart Money,“ (19901, Target Marketing, May, 12-14.


expanding the role of the direct marketing database

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