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Database Management Issues

July 3, 2013

Sources of Data
External Data are obtained as a compiled list from outside the company.

Internal data are obtained from various data sources within the company.

Direct-contact businesses where the customer and the business have a direct interface, data gathering opportunity exists.

If a company has no direct contact with customers it could gather data in the following ways:

1. List purchase. This may include lifestyle

databases which holds lists of people according to specific products and brands bought in categories such as packaged goods, finance and leisure.

2.Data-building schemes. These may

include club membership, credit schemes, or promotions.

3.Introduce new contact channels.

New channels that offer direct contact could be opened to obtain data about customers. Airlines could offer tickets direct over the telephone rather than through travel agents.

Summary of Data Sources

For direct Companies For indirect contact companies

In the majority of companies, data about customers rarely goes directly from the customer onto the marketing database.

Sale is made recorded in sales ledger Marketing


Accounts section and billing section

Stock control

Manage the Database

Advantages In-house A customized approach is possible Day-to-day control Data can be moved easily Disadvantages High cost of development Lack of internal expertise Name and address handling is difficult Conflicting demands from other clients High operating costs


Easier to enforce service-level agreements Leverage on Experience

People Issues
IT people are cautious. Its their job to be cautious; they know the danger of chaos. Marketing is aggressive. Its their job to be aggressive; they know the danger of delay. -- A. Tapp

The Marketing perspective: As a marketer you are obsessed with the customer. You understand that one of the few differentiators we have is customer information. So why does not the rest of the company understand? Why is it so difficult to get them to accept that this is a priority? Marketers: Own the objectives of the database. They want it to be up and running quick to steal a march of their competitors; Dont fix on the cultural rules. They are there to be broken. Are often weak on technical details Know the danger of delay

The IT Perspective IT database managers have a very different view of the world. To them, marketers are only recent arrivals on the scene, coming behind the accounting system, billing system, the stockcontrol system and the sales-recording system.
What does marketing do anyway? They have never understood it, and no one has bothered to tell them, so whats the fuss all about? An IT managers job is to make sure the companys internal systems are working properly.

IT people: Own the technical knowledge of the database and the internal systems to make it happen; Focus on the details; Can feel weighed down by the problems; Need strong guidance on what data to hold and what software applications are required; Know the danger of chaos

Managing the Conflict

The solution to the conflict is understanding each others different points of view, and understanding what each others role are in managing the whole picture.

Data Management over time Issues involved: Keeping data up to date Auditing Archiving

Keeping Data up to Date

Problem: Data decays over time, and so money has to be spent keeping it up to date. In the US, Stone (1996) estimates that consumer data changes by as much as 20 percent every year. In the UK, a lifestyle database manager explained that his consumer data decays by 17 percent every year.

Gone-aways are customers whose records become out of date

Cause of great concern to direct marketers.

The last thing you would want is to waste money by mailing people who no longer live at that address, to get peoples names wrong, or cause distress to relatives by mailing someone who has recently died.

How to minimize these problems: Verify data against the electoral roll before selections of name and address are made. This will - help reduce the number of goneaways mailed; - reduce the data capture errors getting back to the customer

2. One rule of thumb is to use only recent data. -- For example: A supermarket would count three-monthold 3. Run off 1,000 records regularly. Review common mistakes. Analyze the source of data entry: coupon, phone, in-store. Look for patterns and track down source of the problem, then rectify it.

Audit counts should be carried out regularly for record verification. This should include checking database records against the sources of those records, right back to the original data capture. It may be that mistakes along the way can be spotted and rectified.

Exhibit 1.1

I had a mailer recently from my bank. It eventually reached me after being forwarded by a friend who now lives in a house I vacated over two years ago. The mailer offered me a product which I had already taken up from the bank a while back.

The overall impression was one of inefficiency and a lack of care being taken. It is likely that proper record verification would have prevented the bank from wasted mailers such as this.

Archiving Relates with decisions about how long to hold records. Ask the question: When does a customer become a former customer?

Manage the Applications

The key area to manage is the accuracy of any data that is going to get back to the customer. Areas of consideration: 1. Selection 2. Outputs 3. Managing campaign responses

Exhibit 1.2: Mistakes with Data

Happy Anniversary!

A company that sells flowers once mixed up two lists: one was a list of birthdays and the other was funeral anniversaries. Unfortunately, the funeral anniversary people got a letter starting Happy Anniversary!, while the birthday letters began On this sad day

Exhibit 1.2: Mistakes with Data

A telecommunications company launched a new product by writing to 1.7M of its customers. It needed to write to only those customers who were connected to updated equipment. By mistake, however, the list consisted of those customers not able to take up the service. When this had been discovered, the company has to write again to all these people explaining that they had been a bit hasty, and the service was not quite ready.

Outputs are those fields which are transferred from the database to the communication material going to the customer. For direct mail this would include address, name for salutation (Dear Mr/s), and also personal data such as account information for use in the letter.

Exhibit 1.3 More Mistakes on Data Outputs

A large company once made a mistake when outputting data. The mistake was in the setting of fixed data fields for a test mailing it was doing. Instead of allowing the usual 20 spaces for the name field, a wrongly pressed key meant only four spaces were allowed. So when customers received their mailers, their names were cut in half: instead of Dear Mr. Buttley the letter read

Dear Mr. Butt

Managing Campaign Responses

A code to be part of the communication for the campaign. In the event of a response, this code could tell the direct marketer which campaign generated the response; A response (yes/no) code placed on the database