Contemporary Database Marketing – Concepts and Applications

Citation

Demangeot, C. (2008), "Contemporary Database Marketing – Concepts and Applications", Direct Marketing: An International Journal, Vol. 2 No. 3, pp. 186-187. https://doi.org/10.1108/17505930810899339

The book, aimed at both marketing students and practitioners, takes the reader through the main stages of developing and exploiting customer databases to the end of achieving more profitable marketing. Two of the authors are seasoned practitioners (Martin Baier having earned the nickname of “father of ZIP code marketing”), while the third brings his classroom experience to bear on the more quantitative chapters.

As the authors point out, while the idea of using customer information to inform marketing strategy is not new, the masses of information available through such technologies as point of sale scanning or the internet, and consumers' growing multi‐channel behavior, require a more systematic and scientific approach. While most organizations collect, often by default rather than by design, large amounts of customer data, it takes database management expertise to turn that data into valuable intelligence and make informed marketing decisions.

The book is divided into four main parts. Part 1 deals with the essentials around the concept of database marketing, including how to collect and enhance customer data. Part 2 deals with the main forms of data collection, and explains, in a systematic manner, the main quantitative methods which can “make the data speak”.

In Part 3, applications are discussed in more depth, in particular the typical questions which can be asked of a database. This section is most important, because it shows the strategic importance of database marketing, for instance showing different manners in which the lifetime value of a customer can be assessed. The chapter on business market segmentation is also particularly valuable, considering the paucity of literature and discussion on business market segmentation, compared to customer segmentation. In particular, the authors highlight the similarities between consumer and business markets, which can help business‐to‐business marketers segment their markets more strategically. Another interesting chapter focuses on marketing communication. It introduces a number of theories and principles (learning theories, gestalt, interpersonal influences), whose bearing on the writing and targeting of effective communication is then powerfully illustrated.

Finally, Part 4 presents the case of a resort's customer database, and is broken down into a series of activities which the reader can perform an analyse with the help of the book's CD companion. The value of the case and associated activities is that it takes the reader through the main steps of analyzing a database and testing hypotheses.

As the authors point out, a major benefit of database marketing and in particular database analysis is that in some cases it can do away with market research and the vagaries of sampling. Not surprisingly therefore, the quantitative analysis chapters are very similar to those found in traditional market research books. The examples and activities concluding these chapters however tend to be very generic. More concrete examples could have shown what kind of questions of importance to database marketers these methods are able to answer.

The CD contains a mix of links to web sites, activities and the data to be used in conjunction with the main case in the fourth part of the book. There is a reference to material which is located in the “customers only” section of one of the authors' web site, www.ruf.com. Unfortunately, this section seems to have fallen victim to a redesign of the website.

An initial, more conceptual chapter on business principles and in particular the main tenets of marketing, would have empowered readers to think of customer databases in a wider context, and consider a wider range of questions which can be asked of such a database.

Sadly, the book does not seem to target an international audience beyond the USA, which would have made it more valuable to some of our readers. For example, when Chapter 3 discusses data enhancement techniques with the use of ZIP codes, etc. one wishes that information presented would have been aimed at a wider audience, for instance covering enhancement opportunities available in the UK and other western European markets.

Overall, the book provides a very sound and methodical overview of the main issues the owners of customer databases need to concern themselves with. The authors' experience in the field shows through, and the main case provides a vivid example of the value of mining customer data.