Jim answers questions from fellow Drillers
(More questions with answers here, Work Overview here, Index of concepts here)
Topic Overview
Hi again folks, Jim Novo here.
Eating Your Own is not a great idea. Yet in many large companies, different divisions literally try to steal customers / sales from each other using the common customer database. Sure, everyone gets real excited over the plans to merge databases across the company and get the “full view” of the customer, and it makes perfect sense. Perfect sense – if you’re also institutionally prepared for wild battle over customer ownership and value stealing to come. This is particularly true (and difficult to deal with) in multi-channel retail environments.
Got your Drillin’ shows on? Let’s take a stroll through subsidy cost land …
Q: Hi Jim,
Our company has 8 divisions and we completed the integration of all the customer databases a couple of years ago. We have the 360 degree view of the customer, at least as far as sales transactions, across the entire company in one database.
A: Congratulations! However, I note not joy, but some kind of concern in you voice. I’m just waiting for the “But…”
Q: The database services group I am part of is under IT. We respond to requests from the different divisions for customer analysis and the creation of promotional lists for email, direct mail, and telephone campaigns. It’s interesting because our group is finally directly involved with increasing the profitability of the business and we have some input, which makes the job more rewarding. I picked up your book because I thought reading it might increase our ability to contribute.
A: Well, again, congratulations! But I’m still getting that nagging feeling from your tone. Still waiting for the “But…”
Q: I’ve got a two part question for you:
1. What I am seeing is the different divisions promote to “best customers” of the company as a whole, or even try to target best customers of another division for their campaigns. It seems to me that contacting these same people over and over from the different perspectives of the divisions is not optimizing customer value, and might actually be irritating to the customers (I know it would be irritating to me).
The contact frequency across all divisions to the same customer can reach 4 – 6 times a month through various media (phone, mail, e-mail). Also, there is no customer retention effort going on that I am aware of, it appears it is all acquisition oriented but the main targets are customers of other divisions.
A: Oh boy, the database marketing pendulum has swung the other way, from “we don’t know what to do with all this data” to “we’re really maximizing that database asset”. You are correct to be concerned about this issue. Talk about “push marketing”… the intent of each division is “pull” because of the targeting but the result is “push” because of the volume and “noise” created at the customer level. Too much too fast.
Continue reading Intra-Company Promotional Risks