Determining technology ROI crucial, NCDM attendees told

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Orlando, Fla.--New direct-marketing technology should not be introduced in a company without measuring its return on investment, David Jeppesen, VP-Direct Marketing Center at Capital One, told attendees at the opening session of the National Center For Database Marketing winter conference Monday.

“You need to really understand where it is making you money,” Jeppesen said.

Testing technologies’ ROI is a must for marketers, Jeppesen said. “The technology is really front and center; testing and analysis is really core in our company,” he added.

The ROI curve that Capital One uses for each of its technology investments includes four phases: birth, growth, maturity and either “re-birth” or death of the technology. The birth phase of the new technology should have a concrete business case with at least a 300% ROI. “The technology really has to pay for itself,” Jeppesen said.

In the maturity phase, which has the least ROI growth, organizations should be spending the least amount of money on the technology. “A mistake is to continue a large investment after reaching maturity,” Jeppesen said.

In the final phase, when marketers are deciding whether to replace the technology, they should determine if they are still getting a good return.

Introducing new technologies without retiring others is a common mistake in the ROI curve, Jeppesen said. “Retiring technology has helped our cost structure remain stable,” he said.

--Christine Blank

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