The Marketing Database is Dead, So, Now What?

Awhile ago, I learned about this article in MarketingProfs about the decline of the marketing database, from my longtime colleague, friend and co-author, Ruth Stevens.

She asked me what I thought about it, and my reply was simple: The article is asking the wrong question. The question is not “Is the marketing database dead?” The question should be “Is marketing dead?”

Over the course of thirty years, I have played a part in several marketing organizations, but I have also supported marketing from the IT and operational perspective as a chief data officer and manager of analytics. From the beginning of my career, I knew that data was important: The more you know about your customers, the better you can position products and services to serve them.

Most of my experience is with high tech companies, which had distorted views of classic marketing to begin with. These companies often believe that you can’t depend on customers’ providing a good understanding of how they would use a new technology, because most of the time, they had never seen it before. So, any attempt to collect customer inputs was worthless.

If marketing existed at all in these companies, it was in support of the sales teams, the hunters and gatherers of the corporate world. Marketing was relegated to preparing the ammunition for these warriors, sharpening their axes with the right presentations, and helping to open doors through direct mail, email, and countless webinars and — before COVID — in-person events. Marketing teams were the equivalent of Stone Age women who built barriers in canyons, so that men could chase game into the ultimate trap.

In the early part of this century, marketing began to become more quantitative versus qualitative. Instead of depending solely on the cute slogan in print or TV advertising, marketers were being forced to prove which 50% of their advertising budget — increasingly deployed on the Internet — was really working. That quantitative approach to marketing ushered in the age of Big Data and digital marketing metrics. For the first time, marketers were being asked to show results — and they could. This was the age of direct marketing: Using data to segment customers, and then delivering differing messages about products and services.

This is where the marketing database was born. Having a repository of customers that could be sliced and diced for various campaigns was a marketer’s dream. It is also the point where marketing fell in love with the tools that allowed them to engage the customer, measure their response, and move an inquiry from lead to opportunity. The marketing operations teams became more important, and, as the technology grew, CMOs became regarded as the next CIOs.

Today, we take for granted that every time we turn on our computers, some advertisement meant just for us and based on the thousands of searches and inquiries we have done to date will magically appear on our screens. Every application that we open will have recommendations for other things for us to do because we bought, looked at, or simply inquired about something similar. All of this is possible because a database accessed by a tool somewhere in the organization is collecting this data and making it available to marketers.

According to the American Marketing Association, marketing is “the activity, set of institutions, and proceses for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partner, society at large. “In today’s world, that definition could fit sales just as easily as marketing. In fact, even the AMA has added more terms to the definition of “marketing”: Influencer Marketing, Relationship Marketing, Viral Marketing, Green Marketing, Keyword Marketing, and Guerilla Marketing. The list gones on and on.

In recent years, the marketing function has been co-opted by sales, strategy, finance, product development, and even operations. Chief strategy officers command the boardroom with charts and predictions that look alot like marketing strategy. Chief operating officers are are more worried today about digitizing and nurturing a customer’s experience than even marketing ever was. And, in the data world, it is often easier to talk to CFOs about customers, their transactions, their budgets, their like and dislikes than it to have the same conversation with a marketing manager.

As the business landscape changes to more real-time decision-making by customers, suppliers and manufacturers, marketers will find it even more challenging to remain relevant, to define their jobs and to contribute to the conversations that customers think are important. In the late last century, Frederick Reichheld promoted loyalty as the route to profit and growth. He contended, and still does, thata keeping profitable customers, and growing the relationship with them, puts competition. He cited Bain research showing that a samll (5%) increase in customer retention generates a 30% increase in a customer’s lifetime profitability in industries like software, and as much as 90% in financial services. (https://www.researchgate.net/publication/242345850_Loyalty_as_a_philosophy_and_strategy_An_interview_with_Frederick__Reichheld

But Reichheld was also quick to point out that loyalty is not purely the job of marketing. It takes the whole comany — product, manufacturing, service, supply chain, finance — to create positive engages for customers, to create loyalty.

The truth is marketing is being marginalized today. Gone are the days of Mad Men and large advertising budgets. Welcome instead to the world of messaging, microsegments, and metrics. We no longer wonder which half of our advertising budget is working; we wonder instead if our messaging is hitting the right number of prospects with the right content at the right time. These capabilities can come from anywhere with the organization and do.

So, we need to view the database as the customer data source that serves the entire compay, not just marketing. I say that the “marketing database” is dead. And so is marketing’s power and influence as we watch it disappear into other business functions. Welcome to the new world of digital transformation.

If you are a marketer today, what are you to do about this devaluation of marketing in the enterprise? Here are 3 simple suggestions:

1. Recognize the depreciation of marketing, and understand that budgets will be smaller and resources scarcer. We’re experiencing an internal downsizing for some marketing organizations. This is going to required a Marie Kondo-like reaction: Throw out all those marketing programs that do that bring you joy, or more specifically new customers or sales. Get rid of anything that doesn’t clearly contribute to the company’s bottom line. This along may convince manaement to keep marketing in some form.
2. Adapt your skills to this changing world. Marketing skills can be used in any number of positions in the enterprise — in operations, In HR, in product development, in sales. Use the skill that marketers are best at — communications.
3. Grow your understanding of your customer and your company’s business. This understand will ensure your value in any part of the enterprise. And, who knows, maybe the marketing department will rise from the ashes with you at the helm.

Finally, as a marketer, your job has always been to market producs and services. Today, marketing itself needs some marketing. Take on your newest client — Marketing — and get to work.