Tuesday, June 2, 2009

Multichannel Marketing Class June 1: Database Marketing and the Multichannel Challenge

Joe DeCosmo, EVP from The Allant Group in Naperville, addressed us on the difficulties of developing and maintaining customer databases to support multichannel marketing. Companies want to address the customer individually with an offer that is relevant and timely, but often don't have the data structure to support that effort. Ryan underlined these problems in his presentation, where he said that his own company has a customer database but does not really use the information to market across channels or just to mine the exisitng data in stand-alone marketing campaigns. Joe outlined a mapping process that we have talked about in class whereby customers are increasingly using a multiple channel approach to purchasing and how companies can get started developing databases that integrates across all customer interactions. Joe suggested that we use the term interactions instead of classical CRM. This terminology would be consistent with our approach in this class, where we have emphasized the importance of interactive marketing from the first day. Joe also stated that the ROI on multichannel marketing is anywhere from $4-8 for every dollar spent.

We talked in my portion of the class about The Loyalty Effect and the Net Promoter score as developed by Frederick Reichheld and the eighty/twenty rule and moving customers up a value pyramid as outlined by Arthur Hughes. We then had a discussion on data privacy and security. Privacy law has been evolving in this country and the internet has made everyone more concerned about data privacy in particular. The European Union has a stricter policy and an explicit right to data privacy. In the U.S., we focus on self-regulation and guidelines, such as the FTC Guidelines, but we still have legislation in the area, such as CAN-SPAM and the Do-Not-Call legislation. Privacy is an emotional issue. Consumers are concerned about privacy but don't really want to go through the effort to select the exact offers they would receive from all their vendors. We talked about a privacy policy as a way to help consumers feel more comfortable about doing business with a company, as well as using privacy seals from a trusted organization on the web site. We also looked into what the future might hold as technology allows marketers to target ads during our private conversations and as we are entering stores and shopping malls.
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