Core strategic asset or just a tactical tool: How UK companies view the value of their customer databases
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Keywords: customer database, balanced scorecard, data strategy, knowledge management, marketing strategy
Core strategic asset or just a tactical tool: How UK companies view the value of their customer databases Peter Mouncey, Nikolaos Tzokas, Susan Hart and Robin Roslender Received (in revised form): 11 April 2002
Abstract The paper describes a research project commissioned by the Institute of Direct Marketing and undertaken by the University of Strathclyde School of Marketing that investigated the value that organisations place on their customer databases. While the research clearly identified the importance of the customer database as a revenue generator, the results also demonstrate that in many organisations the full potential is not being realised, particularly in developing and supporting corporate strategy. From the detailed findings the research team have developed two frameworks or models which organisations can use firstly to assist them in maximising the value to the overall business of their databases and secondly to assess methods for establishing directly or indirectly the value of the database as a corporate asset. The findings also establish the factors which organisations in the survey felt were inhibiting them from developing the full potential of their databases.
Background From the 1970s onwards, the computerised customer file or database became the key technology-based tool to support home-shopping companies and the direct mail marketing channel within a growing range of organisations across the UK economy. During the 1990s further developments in technology and marketing practice have seen the customer database moving more centre stage within organisations to support direct channels and business-to-business relationships. The key factors behind this trend include the following.
Peter Mouncey 4 Normay Rise Newbury Berkshire RG14 6RY UK Tel: +44 (0)1635 42167; E-mail: [email protected]
— Research in the USA1 identifying the improved profitability of those organisations focusing on customer retention has been instrumental in encouraging companies to adopt this strategy for competitive advantage, leading to the development of loyalty schemes, lifetime value calculations to identify key groups of customers, marketing campaigns to cross- and up-sell etc. — Direct and interactive marketing becoming mainstream channels as
& H E N R Y S T E W A R T P U B L I C AT I O N S 1 4 6 3 - 5 1 7 8 . I n t e r a c t i v e M a r k e t i n g . V O L . 4 N O . 1 . PP 41–58. JULY/SEPTEMBER 2 0 0 2
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The customer database should be viewed as a core corporate asset
organisations decide to cut out intermediaries and refocus the sales force to concentrate on key customers. There has been increased application of technology to support/ facilitate relationships with customers, such as data warehouses, OLAP/ROLAP analysis tools, campaign management and customer contact tools, the development of call handling and the Internet as core customer contact channels, sa
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