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High Performance Marketing:
How to Deal with Direct Marketing's Evolving Challenges and not Burn Out Your IT Department

online columnist Steve Schultz     Column published in DMReview.com
May 11, 2006
 
  By Steve Schultz

The increasing demands that companies are placing on their direct marketing departments seem to parallel those that we as consumers place on car companies. Every five years the number of features that we consider to be "standard" has multiplied; however, the price we are willing to pay for the vehicle is roughly the same.

In the good old days, direct marketing had a well-defined role: maximize the value it created from its marketing campaigns. This required the direct marketer to understand a finite set of media (direct mail, outbound calls, inserts, catalogs, etc.) and customer responsiveness to varying media and product combinations. Further, the timeline for most "learning loops" was relatively long-lived - often lasting three to six months from ideation to final campaign insight development.

Today, the direct marketing discipline must deal with new challenges including email and Web channels, real-time marketing, decentralized organization structures and customer dialogue demands. Addressing these challenges causes an explosion of IT demands as new data needs and the complexity of data structure and integration required are addressed. The following are some areas that you and your IT department should plan for as you tackle these new challenges:

Email and Web Channels

Data Needs: These new channels cause an explosion in the volume of data because these channels, especially the Web channel, often generate more raw data than all previous database sources combined. When faced with the data volumes from most Web sites, the days of being able to store the lowest grain of data for 13+ months are gone. The challenge is to define the period of data relevancy and leverage data mining techniques to separate the wheat from the chaff.

Data Structures and Integration: The volume of Web channel data and the nature of its structure cause organizations to put complex processes in place to ensure the quality of the data. Additionally, most organizations need to develop standalone repositories on which custom tools are deployed to access the information. Further, the proliferation of emails and the immediate nature of response to it have shortened the data acquisition, cleansing and loading window — the often obsolete previous approaches to data management.

Tools: From reporting and measurement tools to data mining tools, these channels require organizations to augment existing toolsets.

Real-Time Marketing

Data Needs: To meet the demands of real-time marketing, direct marketers continue to expand the types of information they require. Specifically, real-time marketing significantly increased the amount of customer preference and channel interaction data that has typically been desired by direct marketers.

Data Structures and Integration: The data architect faces challenges of blending traditional database integration approaches with the challenges of data design to support OLTP-like data access requirements. This means addressing data integration with the often cumbersome proprietary data structures that exist in channels and developing common data structures to minimize point-to-point data integration. Additionally, there is an impact on data latency. While not all data needs to be truly real-time, there is a need for most data to be as current as possible. This may mean that you need to re-architect your approach to data cleansing and standardization.

Tools: For some organizations, real-time marketing can be supported by the existing tool operating systems. Other organizations require integration of a third-party device to support an effective cross-channel, real-time marketing message deployment strategy.

Decentralized Marketing

Data Needs: Most decentralized organizations require much of the same data that their centralized marketing counterparts did.

Data Structures and Integration: While the new data issues are minimal, the data integration and data access challenges can be significant. Often decentralized marketing groups desire to add local data from nonstandard sources. This places significant challenges on IT to preserve data quality.

Tools: The tools deployed in the typical centralized marketing environment often need to be augmented to address diverse skill levels and a distributed campaign management paradigm.

Customer Dialogs

Data Needs: Supporting customer dialogs expands the types of data required about diverse channels in ways that are similar to those previously described in the email and Web channels and real-time marketing sections. It also adds an additional burden to the various channels to have the nature of each interaction result in codified data that can be used to analyze and plan customer contacts.

Data Structures and Integration: As previously noted, the new data demands often require rework to existing data feeds and data models to accommodate the new, enhanced information. Additionally, the business must realize that the sequencing of events has furthered the need to understand the timing of data below the level of the data feed and at a data grain that is finer than previously required.

Tools: The direct marketing tools remain similar; however, tools or/and training are almost always required for the customer interaction points to provide and leverage a two-way flow of information between direct marketing and the channels.

Overall, it is exciting to see that direct marketing as a discipline continues to expand its influence and is enabling companies to be more prepared for doing business in the 21st century. At the same time, the pace of change can be daunting and the demands that direct marketing places on its enablers, especially IT support, need to be carefully managed.

...............................................................................

For more information on related topics visit the following related portals...
Campaign Management and CRM.

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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