I am compelled to respond to Chris Lovell and Tony Wightmans’ letters (MW June 25) which were commenting on Heinz’s announcement of its reduction in direct marketing activities and Marketing Week’s customer loyalty feature, respectively.©
Both Lovell and Wightman are exponents of the data gathering and data mining potential of relationship and direct marketing. Fine. That much we all know. But what they don’t say (or don’t know) is what packaged goods manufacturers, and other brand owners, actually do with this data once it’s collected, mined and modelled.
Using relationship marketing programmes as an (expensive) data information service in isolation isn’t acceptable, especially when you consider that the cost of customer contact can exceed the wholesale price of a consumer product by a multiple ranging from two to ten. Many low-ticket product distributors which have been advised to build consumer databases by their agencies are now facing huge data preparation and maintenance costs with no clear strategy for ROI. So they’re pulling out prematurely and some may never return.
These opportunities are numerous and include added-value information (to the customer) provision, product extensions, frequent purchase reward mechanisms, cross-brands offers and partnerships alliances. All are features of relationship marketing communications programmes, which in consumer markets are usually targeted to known, and potential heavy, users only.
Data modelling ambitions are admirable but, with the exception of the supermarkets, they cannot alone justify the prerequisite investment in data sourcing. In relationship marketing, the end is most often more important than the means.
Managing & strategy director
Marsden Grant International