by Ron Kahan

Author's Note: Before you read any further, I think it's important to clarify that my company is an independent database marketing consultancy with no ties, monetary or otherwise, to any marketing database technology (read impartial). This column will most likely get me in trouble. On second thought, there's no doubt it will. Therefore, please read the following disclaimer:

DISCLAIMER
The opinions expressed herein are mine alone. They do not represent those of DM News
or any other third party. All examples are written in general terms. Any similarities to marketing database systems currently on the market or about to be released are purely coincidental.

Satisfying Your Database Needs

Now, let's move on to the topic at hand. As a database marketing practitioner, you are no doubt aware of the growing number of options for marketing database systems available to your company. Yet, in sifting through all these options you've probably discovered that , basically there are three "types" you can choose from.

Type #1 - Flat File Formats

A flat file format marked the beginning of marketing databases. It involves linking your customer database and related transactional information and summarizing them with highly indexed fields for faster queries and look-up time.

Although this process sounds simplistic it usually involves some custom programming to receive and convert the data into a usable format. The information was originally only accessible to you through your service bureau representative. Since that time, it has been made available through
on-line services from your service bureau's datacenter.

The more sophisticated service bureaus have developed desktop software applications so that you can view and manipulate the data in a static fashion using PC diskettes or even a CD-ROM.

The Down Side of Flat File Formats

Flexibility (or lack thereof) of these systems: Every time you want a different type of report, your service bureau has to have programmers write code -- an expense of time and money to you, the client.

Future problems. Although this short-term solution may be the best for those database marketers who don't want to rely on internal MIS/IT departments, it may come back to haunt you in the longer term.

Type #2 - Proprietary Systems

Seeing an opportunity, many software companies began developing proprietary marketing database systems. With them, you were no longer at the mercy of a service bureau for your data.

These proprietary systems are installed at your site, sometimes right on your desktop. A data conversion process still occurs, but now the speed has been increased significantly. Some of these entrepreneurial software companies even offer fee-based consulting services to assist you in getting up-and-running.

The Down Side of Proprietary Systems

Lack of self-sufficiency. Although no longer tied to a service bureau for every little count, query or report, you're still tied to the software developer for new reports, more complex queries, and software enhancements.

Protection. There is no way of knowing whether or not your requested enhancements are being furnished to the rest of the software vendor's client base -- who might very well be your competition.

Type #3 - Open System Relational Databases

Today, many database marketing practitioners are using open system relational databases. Once considered the slower option, in implementation and processing speed, it is now, oftentimes, the fastest.

As with Types #1 and #2, there are many implementation options available. You can choose from a wide variety of database software or an extensive list of available query and OLAP (on-line analytical processing) software packages.

The main advantages with open system relational databases are:

• Easy-to-use and cost-effective. The database itself can be created and maintained by your internal MIS/IT department. Any changes to the database structure occur quite easily without the expense of third party assistance.
• In-house confidentiality. Protection from your competition. They won't know what you're doing with your marketing database or how you're manipulating the data for analysis, reports and targeting.
• Self-sufficiency. You are no longer tied to third party vendors for service.
• Growth potential. Technology in general is moving toward an open system, client server standard which is where Type #3 falls. Fitting the direction for technical standards being developed by your organization, it provides long-term viability.

By now you've probably realized that I'm biased toward open system relational database systems for marketing database technology. However, my company has recommended Types 1 & 2 as recent as within the last three months. Why did we do that with my obvious bias? Easy answer; it was the best option for my clients' unique situations.

The major consideration for choosing either Types 1 or 2 must equate back to the management of interim vs. long term strategies and objectives. In some cases (but, not always), a full-blown, relational system can take too long to start generating ROI for upper management. Another instance for not choosing Type 3 could revolve around internal resources in your MIS/IT or Marketing departments. After all, the creation of a marketing database alone does not generate revenue. There must be processes in place to manage and maintain the system, as there must be the marketing thought-leadership available to leverage the technology for profitable marketing initiatives.

All three of these options are right, there is no wrong. As long as your company has a solid foundation of business drivers, strategies and tactics which are propelling you to invest in a marketing database, return on investment will come from any of these options. Without this foundation it doesn't matter which direction your company goes in, your resultant destination will be failure.

Ariss Kahan Database Marketing Group, Inc. assists clients build customer relationships through proven and innovative database marketing techniques and marketing database technologies. They specialize in customer acquisition, retention, cross-sell and up-sell initiatives and can be reached at (303) 368-9800 or via e-mail at rkahan@dbmktg.com.