In a few years, every business will be desperately looking for computer analysts to aid their direct marketing. At least that is the prediction made by Annette Kelly, managing director at consumer list manager HLB. She believes that while data-driven marketing increasingly relies on technically skilled people, the industry is being hit by a skills shortage.
She says part of the reason for this is the financial pressures on direct marketing agencies.
Usually an agency or consultant will recommend to a client how much communication should be delivered to their customers. In the past, computer analysts may have done the evaluation, provided a report and left it to a marketing strategist to interpret the figures and make recommendations to the client. Today, tighter margins in the lists business are putting pressure on companies so that there is a demand for people who can act both as marketing strategists and computer analysts. There is a genuine need for people who understand the mathematics of direct marketing and can show clients real numbers.
It is something of a conundrum that few people have the ability to combine technical know-how with good marketing skills. Greg Bradford, managing director at database consultants CACI – parent of CACI AnaDATA – describes it as “like trying to find someone that’s a doctor and a lawyer.”
People who are good with technology are not always good with statistics. “It’s a commonly held opinion that people who are technical are also good with numbers, when actually they are usually hopeless,” says Edwina Dunn, chief executive at marketing consultancy Dunn Humby.
The situation has been exacerbated by major clients such as Tesco and Sainsbury’s demanding that databases be developed to analyse the lifetime value of customers. HLB’s Kelly explains: “The more businesses that develop customer databases, the more need there is for intelligent people to translate computer technology skills into marketing solutions, or to assist the marketers in doing that. And if the direct marketing industry can’t retain those kind of ‘techie’ people, it’s going to fail.”
Besides the difficulty of retaining IT staff, many in the industry say it is hard to find them in the first place. “My guess is that people who might go into some kind of techie major are not realising how valuable their skills are to the direct marketing industry,”says Kelly. “I think we might be preaching to the wrong crowd. We ought to be talking, not to the marketing department, but the statistics department. What we should be doing is looking for computer analysts who want to use their skills and apply them to data-driven marketing.”
But IT staff are more sought after than ever, making it even harder for direct marketing agencies to find the talent they want. The millennium bug, which means companies are bringing in people to sort out compliance, and the prospect of a new European currency, are causing a brain drain of technology people.
Even if companies find the talent they require, they often discover that their technically skilled people are being headhunted by computer companies that can offer salaries unmatched by the direct marketing industry.
Not only is there a danger of losing programmers to IT companies, but many computer analysts are choosing to go freelance. In the City, they can be paid 300 a day, so it is easy to see why direct marketing companies are having problems retaining staff.
So how can the direct marketing industry compete? For a start, companies need to offer more money. But, as Judy Gehlcken, group chief executive of The Computing Group, points out: “This would result in a spiralling of salaries in which most of the direct marketing industry would lose out as margins do not allow sustained generosity.”
Companies are trying to retain IT talent by making the job more exciting and keeping in-house technology up-to-date. Martin Duff, group communications manager at direct marketing group SR Communications, says: “We constantly provide our technically skilled people with new technology to try, which overcomes their desire to move. By nature, technical experts love to have new hi-tech toys to play with; by meeting this need we counter the temptation to move for money alone.”
Dunn agrees: “Technology people want to work with the latest and greatest machines so they can keep their CVs up-to-date. It’s a seller’s market. Give them an older machine and they’re off like a shot. If you can tell them you have something interesting, such as Tesco’s Club Card, that will usually attract them.”
Another incentive is to stress how much they are valued within the organisation and to show staff the opportunities for promotion. Gehlcken says: “We’ve got to value our people by giving them the right training and paying them well. We have technical people who move into sales and management roles. We need to get them more involved in the business angle and show them we want more from them than just the equations and working out the programming.”
By pointing out the long-term career opportunities in data-driven marketing and showing people that they can reach the top of the ladder, companies have a better chance of retaining staff. However, Gehlcken says the most effective way of getting the right talent on board is “the recruitment and training of new entrants for whom the involving nature of dynamic customer data is appealing.”
Many in the industry believe it is far easier to teach IT analysts marketing than vice versa. Bill Portlock, planning director at WWAV Rapp Collins, comments: “We’ll bring in raw graduates who have got the skills and train them in direct marketing. They need to be statisticians first and know enough about IT to do the statistics. Experience of direct marketing is not necessarily that important.”
By training people, WWAV Rapp Collins usually achieves loyalty. “There’s competition out there from lots of other agencies who are looking for people with the experience.Touch wood, I can normally keep hold of the people I want to keep hold off. We are the biggest and it’s a good place to train. We’re one of the first companies to offer statistical modelling in-house, and not that many agencies do,” says Portlock.
In-house training is probably vital because people with a good IT pedigree may find the marketing environment a difficult place to work. But Shane Baylis, director of The Database Group, feels that classically trained programmers are unsuitable for programming roles in the direct marketing industry.
Underpinning the problems faced by direct marketing is the fact that it is failing to maintain a high enough profile to attract talent. As Dunn says: “I don’t think direct marketing sells itself at all well. As marketing professionals, we should be able to communicate the importance of the industry and that should be enough to attract the super technologists.”
The skills shortage is not about to go away. The demand for technically skilled people is outstripping supply on a global scale. People with Oracle, Unix and Windows NT skills are in demand in many industries. Technology areas that are fairly unique to direct marketing, such as statistical analysis, are also experiencing a skills shortfall.
For companies expert in marketing, it seems ironic that the direct marketing industry appears to be failing to market itself adequately to the individuals who are required for such a critical aspect of the business – namely, database management.
Many young IT-literate people who could be heading for a career in direct marketing still believe that cash is king, so direct marketing is losing out. Everyone is saying it’s a seller’s market.Direct marketing ought to make sure it is not selling itself short.