How Database Marketing Can Turn Companies Around

Posted on by Beth Negus Viveiros

"Moneyball," the current hit movie based on Michael Lewis' 2003 book by the same name, is a story that has two important lessons for direct and database marketers.

First, there is big money to be made by those whose decision making is informed by the best data and most sophisticated analysis of that data.

Second, in order to stay ahead of the competition, you need to keep improving the quality of the data that you are analyzing, and the sophistication of the analysis itself.

"Moneyball" is the true story of the Oakland Athletics baseball team during the 2002 season. The Athletics, despite being a small-market team with limited financial resources, find a way to compete against large-market, mega-budget teams such as the New York Yankees and Boston Red Sox.

The secret, as put into practice by general manager Billy Beane, is to hire a data miner and put him to work crunching the numbers. Billy collaborates closely with the data miner and, in fact, confers with his quantitative expert every time a decision has to be made. Beane runs into major resistance within the organization but in the end, his approach worked as the Athletics win 20 consecutive games, breaking the American League record.

There probably won't be a sequel, however, as several of the mega-budget teams like the Boston Red Sox caught on to the approach. Fast-forwarding to the present, the Athletics have not made the post-season playoffs for five straight years.

MoneyMarketing

What would Billy Beane think if he were named general manager of your organization? Would he decide that it is run by our industry's version of the old-school, tobacco-chewing scouts? Or, would he conclude that you are winning by using MoneyMarketing?

Billy Beane would want to know if robust data and sophisticated analytics are front-and-center in the way that you run your business. He would not be happy if he found that you are keeping them in the minor leagues of your organization.

How would Billy Beane know for sure if you are a true data-driven organization? Based on his experience with the Oakland Athletics, he might ask the following questions:

· Do you have a best-practices marketing database? Without the highest quality data, even the best analytical minds in the business are limited in the value that they can provide.

· Do you have top-notch analytical professionals on staff or on retainer, who work closely with the marketing and creative teams? These are more than just statisticians! They are seasoned quantitative consultants with a deep understanding of the business of direct and database marketing.

· If you have top-notch analytical professionals on staff or on retainer, are they "invited to the table" when management discusses important strategic and tactical issues? Or, are they considered back-room specialists who are heard from only when spoken to, but seldom seen by management?

· Are you always looking for new ways to improve your marketing database? Likewise, are you always searching for innovative ways to analyze and take advantage of your data? Remember that your competitors are probably not standing still. If you do not keep advancing, they might just blow by you, and maybe even steal home.

Remember, old-school direct and database marketers often end up unemployed. And old-school companies often end up in bankruptcy.

Jim Wheaton is a co-founder and principal of Wheaton Group.

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