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High Performance Marketing:
Marketing Database Design Considerations: An Overview

online columnist Steve Schultz     Column published in DMReview.com
April 7, 2005
 
  By Steve Schultz

Steve would like to thank Tangirala C. (TCS) Sarma, SVP, Western Operations of Quaero Corp. for contributing this month's column.

Design of the marketing database is critical for successful marketing implementations. The majority of the marketing implementations that fail do so because either the database design is not geared toward satisfying client requirements, or sufficient time and effort have not been invested during the design phase of the project. More often than not, due to IT department development backlogs, the overriding marketing database design parameter is ease of implementation rather than usability of the model and end-user requirements.

Marketing Database Design

Marketing database design is not very different from standard data warehouse design. The following characteristics differentiate marketing databases from standard data warehouse implementations.

Marketing database:

  • Is built with an eye for how it will be used, not how the data should be stored.
  • Needs to address the requirements of marketing users and understand the functionality required.
  • Should understand the marketing programs end users are going to run and what type of data is needed to support each program's execution.
  • Should understand how the programs are measured.
  • Ought to define responses for each program (inferred or direct), model ways to store the responses and tie that information back to the customer information.
  • Should provide ability to track a response through stages (awareness, consideration, inquiry, purchase and loyalty).

Design of marketing databases is impacted by data frequency, history requirements, security, archival strategies, reporting, analysis and campaign requirements. Marketing database design differs from the standard warehouse design in the following ways:

  • Data should be easily accessible to marketing users.
  • History tracking on dimensional attributes is usually not a requirement. Marketing users are mostly interested in the current state of the business dimensions and the latest information on customers and/or households.
  • Need for tracking campaign data, contact history and response history for marketing program ROI reporting and should also capture and store information on programs, contact lists and response history.

Customer Information - Life Blood of the Marketing Database

Marketing databases are centered on customer information with standard dimensions such as customer, prospect, household, account, date and product. In real-life marketing database implementations, multiple addresses and multiple e-mail addresses for a customer are typical in the system, and customer information may also come from multiple source systems. For example, in the financial services industry, multiple source systems could provide customer data depending on how many different products the customer has with the bank. To avoid targeting the same customer several times in a campaign, it is essential to establish business rules to identify best contact information (best address, best e-mail address, best phone, etc.) and identify data survivorship across these multiple systems in defining a 360-degree view of the customer.

In addition to the standard dimensions, marketing databases should also capture contact and solicitation rules to avoid contacting customers who do not want to be contacted or to avoid bombarding the customers with multiple offers during a limited time period. This information is obtained as part of the general interactions through various channels and recorded in the source systems and may include use of online interfaces where customers can go and update their profile along with contact preferences. A best practice is to obtain this information from third party sources such as the "do-not-call" list to avoid legal issues.

Marketing databases should capture campaign information, contact lists and response information. Even if businesses use multiple tools to generate and disseminate marketing campaigns, all this information should be captured in a single place, usually in marketing databases. A record of all the contacts should be loaded into contact history to help avoid customer fatigue. In addition, consideration should be given to load response history to help measure the effectiveness and ROI of campaign activities. Sometimes this response information is directly provided by the vendors (usually with e-mail campaigns). Where data is not available directly, processes should be built to calculate inferred responses based on results of the campaign.

Data Quality

Data quality is crucial for the marketing databases. Data cleansing - cleaning and standardizing customer contact attributes - is vital to reduce the overall marketing costs that result from undelivered contacts. Companies deploy sophisticated technology to clean, standardize and consolidate customer and household data as part of these database implementations.

Marketing Database Implementation Risks and Recommendations

Before embarking on the journey of building a marketing database, it is essential to understand the risks involved and identify risk mitigation procedures. This will pave the way for successful implementations. Marketing databases carry similar risks as data warehouse implementations. These risks mainly stem from inexperienced technical staff, poor design and technologically focused implementations. The following are the risks and the risk mitigation techniques associated with all marketing database implementations.

  • Under-experienced marketing integrator partner: Select integration partners that bring marketing knowledge and experience. Companies tend to employ integration partners with data warehousing experience.
  • Insufficient knowledge of marketing and integration requirements: It is essential that consultants involved in the implementation have a successful track record with these systems. Ask for references.
  • Stovepiping of campaign management "process" and "technology:" Ensure that the approach considers business and technical issues and integrates well with the overall CRM infrastructure.
  • Unrealistic project implementation scope "big bang:" Methodology should utilize logical steps and milestones to ensure ultimate success.
  • Lack of knowledge transfer and user buy-in: Ensure users are closely associated with the design and with overall implementation. This hands-on approach ensures user competence and buy-in.
  • Insufficient technical and marketing staff skills to optimize the use of the marketing database: It is not enough to build a sophisticated marketing database. To ensure successful use of this database, it is essential to evaluate the skills of the users and provide appropriate training.
  • Insufficient hardware platform to support the application: Most of the implementations tend to ignore the importance of hardware and database sizing. Make sure the integrator methodology allocates sufficient time for infrastructure assessment.
  • Absence of ongoing user support: It is critical that continuous support is provided at least till the system is adopted fully within the organization. Lack of timely support will result in user frustration and will eventually result in abandoning the system.

Marketing databases are different from standard data warehouses. To successfully leverage full potential of marketing databases, it is critical to build a database that works for the end users. Good data quality, capturing the right information and managing risk factors would go a long way in ensuring your marketing database becomes the cornerstone of successful, measurable marketing activities.

As head of Quaero's Western U.S. Operations, Tangirala Sarma (TCS) brings 12 years of experience as an application software and data warehousing specialist that spans across international markets and global delivery models in financial services, retail, hospitality, healthcare, e-commerce and telecommunications. Sarma has authored several white papers on churn management, rapid migration technology and database technology. Recently he received significant acclaim for his work on real-time data warehousing and multidimensional databases, which he presented to a packed auditorium at Oracle Open World. He can be reached at sarmat@quaero.com.

 

 

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For more information on related topics visit the following related portals...
Database Marketing.

Steve Schultz is a leading customer relationship management (CRM) practitioner who combines an understanding of information technology with extensive business process design experience and information-based decision-making methodologies. As executive VP of Client Services for Quaero (www.quaero.com), he helps clients identify, justify, implement and leverage leading edge analytical CRM environments to create or/and improve their database marketing capabilities. Schultz has worked with companies in the financial services, telecommunications, retail, publishing and hospitality industries. Contact him at schultzs@quaero.com.

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