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Opening Pandora's Box
Those of us who pioneered data-driven marketing and introduced Customer Relationship Management (CRM) in the 1990s unwittingly opened Pandora's Box. We were looking for 'golden nuggets' and marketing opportunities in the data. However, at the same time we let out the temptation for firms to submerge consumers with direct messages, many of which are irrelevant, time-consuming and irritating, whereas others can be so disturbingly pertinent that they can overshoot the mark and be considered intrusive. With the advent of additional web, mobile and social marketing channels, the problem has increased to the point where some consumers have become exasperated and legislators are pushing through stringent data protection regulations, which may even put an end to direct marketing as we know it. If practice does not change, consumers may even take control of data into their own hands and remove it from a company altogether.
This has overshadowed the core message of data-driven marketing -- that is, that companies should use customer data for finding opportunities and delivering messages that are relevant to the consumer and are of mutual benefit. Consumers benefit from being made aware of product offerings that will appeal and be useful to them. Another important benefit is that the company learns enough about consumers to understand individual needs and provide a superior level of service. The resulting mutual trust leads to a profitable relationship for both parties -- better service for the consumer and increased sales, loyalty and customer lifetime value for the firm. These messages were focal points of the 1990s' database evangelists,1, 2, 3, 4 but they have increasingly been ignored.
Twenty years later, firms are still not using data and technology to explore the consumer side of the relationship. Companies are not taking the customer point of view -- they are intent on giving consumers what they think they need and not what they really want. The data and tools for understanding the individual consumer are available, but they are not being used to their full potential. Companies overlook what consumers want and especially choose to ignore what they do not want. This is largely due to fear of losing money if the customer 'has it his way' and partly due to management's fear of...