Client-related data arrives on its own, costs nothing to source or maintain, and has little or no value. No? Well that's what your company’s balance sheet says. It’s time to treat data with the respect it deserves and value it as a corporate asset.

Having trouble convincing your CEO and Executive Committee that your marketing database is a tangible asset and should be valued as though it were on the Balance Sheet? Struggling to persuade the CFO that it needs its own budget and resources?

Then try telling them you’re going to scrap the database seeing as they obviously think it’s worth nothing. Just junk the whole lot in the digital trash-can. That should get their attention. After all, if the unthinkable happened and your company closed, one of the assets a savvy liquidator would be looking to sell is the marketing database. No one would give it away for nothing.

Data is value. It converts into hard cash. Profit. And if anyone ever doubted that, figures prepared by a leading Asian airline we work with have quantified just how valuable a well-maintained and intelligently applied database can be.

The result is remarkable. Calculated based on a mailing list of 1 million customers, with weekly mailing frequency and 2.2% conversion rate equating to just under 200,000 transaction per year, that airline’s database is generating US$6m per annum, which under a standard corporate asset valuation model equates to one brand new Boeing 737.

That’s the good news. The bad news, of course, is that this company is the exception and not the rule. Most companies still neglect their databases pitifully, leaving poor ‘jack-of-all-trades’ marketing middle managers to look after it along with the premiums, corporate golf day and annual calendar. Data, like so many assets of high value, can be fragile and needs loving care. It also has to be enriched continuously and used intelligently, following a clear and measurable strategic plan. Without that, the marketing database is an untended asset that can generate little or no current value.

It gets worse. The most common mistake of database marketing is not the failure to use the data at all, but the dogged conviction that extra revenue can be generated simply by sending more of the same to the same list, which has its most negative and damaging impact when it’s done as a desperate reaction to falling conversion rates. It really doesn’t take an Einstein to figure out that the more identical communications you send to the same people, combined with just how unsuccessful the blast was in the first place, the lower the conversion rate is going to fall and the more customers are going to junk it or unsubscribe.

The real cost to a business of using this fundamentally flawed email strategy can be far higher than for conventional DM, even allowing for the much-vaunted material economies of print and postage.

Send a scattershot printed DM that fails and you write off the materials. However, there’s absolutely nothing to stop you from regrouping your forces and trying again another time.

Yet send an unsuccessful email to your database and then compound the error by sending it over again, and the risk is that your emails will be consigned definitively to the ‘Junk’ and ‘Spam’ folders. You could even find yourself blacklisted by ISPs, from where the road to recovery is long and hard as you work to restore your sender reputation.

So what are some of the key lessons in optimising the value of the database?

• Volume is good but quality data is more important. Every record in the marketing database has an inherent value; the database should be viewed as capital and should be treated just like any other corporate asset.


• Marketers need to gather and keep the best data they can on their customers, understand them, segment them, track them over time, and undertake predictive modelling to market information that is relevant to the consumer. If marketers apply these best-practice principles, they’ll be able to reach out to the most likely leads, with the most relevant offers and through the right channels. Marketers should also go to outside sources to target new prospects of similar preferences and behaviours.


• Companies need to get more aggressive in collecting e-mails from customers and prospects. It’s surprising how many companies don’t focus on doing that. Email messages should be as personal as possible based on the company’s specific relationships with its customers, how often they use the company’s services, what types of services they use, and with special offers targeted to them. There’s no reason we can’t have one-to-one communications with thousands, or even millions of customers using today’s readily available email marketing technologies.


• Database marketing is more important than ever before, as marketers need to use their limited marketing dollars in a much smarter way. By understanding the specific channels and offers for each customer segment, marketers will experience higher conversions with lower costs.

Do you place a material value to your marketing data? If your answer is no, you’re not protecting it, you’re not optimising its effectiveness and you’re not adding to its significant value as a company asset.

Think data!

Watch out for a feature on how to optimise your marketing targeting with the use of preference centre in the coming issue.