|
DATABASES ARE EVERYWHERE TODAY. It is easy to be confused about the different kinds of databases that are now used in sales and marketing. This discussion describes and contrasts two very popular kinds of databases used by salesmen and marketers today: Contact Management systems and Customer Relationship Management ("CRM") systems. It then introduces you to a new (and better) third kind of database: a management analytics database. |
WHAT IS A CONTACT MANAGEMENT DATABASE?
Contact Management databases focus mainly upon who the customers are and how to reach them. They also keep a record of the various ways in which the company's sales team have contacted the customer. Simply, contact management systems are much like a salesman's box of index cards. Each customer has one card and each card stores information that the salesman thinks might be useful for selling to the customer.
Contact management databases are simple, easy to use and quite inexpensive. However, they are not designed to keep track of interactions the customer has with the company outside of the salesman's calls. Nor are contact management databases effective as "mail list managers" that are designed to store and prepare mailing lists. And, contact management systems do not keep track of the purchases a customer makes or how much a customer is spending. Finally, it us usually very difficult to exchange data between most contact management systems and other kinds of systems.
WHAT IS A CUSTOMER RELATIONSHIP MANAGEMENT (CRM) DATABASE?
At the other end of the spectrum, Customer Relationship Management or "CRM" systems go far beyond contact management systems. CRM systems generally are designed to keep track of almost every interaction a customer has with a company. They track sales, customer service issues, mailings, demographic data and more. The idea behind CRM systems is to integrate financial, marketing, production and customer support systems into a single complete repository that provides the company with an understanding of every aspect of the customer's relationship with them.
As a result, CRM systems are elaborate, expensive and difficult to use and maintain. In reality, many never get completely installed and even then, they don't work very well.
There are several reasons. First, technical issues often prevent data from moving smoothly between different kinds of systems (finance, sales and production systems often don't "talk to each other" very well, for example.) Second, they require almost every customer-facing person in the company to be connected to the computer system. Third, most companies don't really know what information is important to track and what is not... so they attempt to store everything for everybody forever. It's no wonder that CRM systems have earned a bad reputation for being over-promised and under-delivered.
WHAT MAKES A management analytics database BETTER?
Management Analytics Group has devised a middle ground solution that is both affordable and effective. We call it a management analytics database. It stores selected information about customer purchasing behavior -- so it is much less complex and much more affordable than CRM systems. At the same time, it is designed to answer all kinds of different marketing-oriented questions. So, it is much more versatile than contact management systems.
At a minimum, a management analytics database stores data about: who is a buyer, what they bought, when did they bought it and how much did they spent for it. This basic information is usually available from a company's financial and production systems.
It can store other kinds of information, too, if the data are available. These include information about products, direct mail campaigns, offers, coupon redemptions and so forth.
The result is a single data repository of information that describes how you have contacted your customers and how they have responded with their purchases. This information is the heart of every data-driven marketing technique. (You can see why by looking at our Database Marketing from 40,000 Feet.)
WHAT'S THE BOTTOM LINE?
Data-driven techniques cut contact costs, boost campaign response rates, grow market penetration and increase customer loyalty and retention. Sales, profits and marketing ROI all rise as the result. All these directly and quickly improve your bottom-line profits. However, the greatest benefits are the insights that will help you lead your company to success through today's ever-shifting markets and future competitive pressures.
Remember, however, that using data-driven tools will change things -- sometimes quite profoundly. So, ongoing tracking and analysis is essential for adjusting to these changes and keeping things on course. You can learn more about the importance of tracking changes in Campaign Tracking - Success Into the Future.
Questions? Just ask! [Back to How-to Resources] [Top] |