DATABASES NOT BEING USED TO BEST ADVANTAGE: STUDY RESEARCH FINDS MARKETERS DON'T INTEGRATE DATA IN USEFUL WAYS

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U.S. companies spend millions of dollars a year collecting information on customers through database marketing. Yet, according to a new study, a good percentage of them don't take advantage of the data they collect.

Little more than half (59%) of those surveyed customize the information gathered to cross-sell other products or services, according to the study conducted by Northwestern University.

Even if research tells a company about the likes and dislikes of a particular customer, for example, it isn't likely to take those preferences into account in its marketing efforts.

FRAGMENTED DATA

Part of the problem: The data collected are so fragmented that the pieces aren't put together.

"You need to combine behavioral data and attitudinal data to fully understand customer prospects in the marketplace," said Don Schultz, a professor at Northwestern University's Medill School of Journalism and a senior partner at Targetbase Marketing, Irving, Texas. "Few organizations are gathering both, [and] less than a third of organizations even talk about capturing the two."

Over the past decade, behaviorists essentially have dominated in direct marketing, opined Mr. Schultz, collecting more data about behavior, including purchasing patterns. That's because such data generally are abundant and less costly to manage.

As a result, analysts and technologists have driven business decisions, he said.

On the other hand, attitudinal data-including consumers' feelings, awareness and recognition of brands-often have taken a back seat, Mr. Schultz said.

"You cannot understand return on customer investment unless you understand why they're doing what they're doing," he said.

The study suggests those marketers that use behavioral and attitudinal data tend to have a higher return on sales.

INVESTMENT MODEL

"We're looking at an investment model of what are customers worth, what are you willing to invest and how much do you get back," he noted.

The findings, released last week at the Direct Marketing Association's annual conference in San Francisco, are from a survey conducted by telephone interviews this past summer.

"What we're trying to do is explain behavior," Mr. Schultz said. "Cracking the code [on the effective use of behavioral and attitudinal information] is critical."

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