Right now there’s a new service being touted to UK direct marketers, by the name of Ocean, which combines 20 different databases and promises to provide over 100 million data records on 40 million named UK individuals.
The service, provided by database firm CACI, offers marketers access to names, addresses, telephone numbers, email addresses and so on plus a comprehensive analysis of their geodemographic status (income etc), their spending habits, newspaper reading habits, what they buy on the internet, and current spending plans (for example, whether they intend to change mobile phone user in the next few months).
It’s being sold as the holy grail of direct marketing. Its advertising slogan: ‘Does your consumer data push the right buttons?’
In fact, services like this a part of the problem, not part of the solution. They underline the fact that the direct marketing industry has a big problem. A very big problem which lies deep in the unstated assumptions by which the industry currently operates.
Here are three of these assumptions.
First, that good marketing is about effective messaging: if only we can find the right message – the right stimulus – we can be assured of the right response. Thus when CACI talks about pressing the right consumer buttons it is treating ‘the consumer’ – a living, breathing human being with his or her own purposes, priorities and intentions – as if ‘it’ was a non-sentient automaton that, if you can press the right buttons, you can get to do what you want it to do.
The second assumption follows from the first one: to discover the right buttons and how to press them you need more, better data. So increased marketing effectiveness depends on gathering ever more data and mining and analysing it in ever more sophisticated ways. The more you know about ‘the consumer’ the more effective your button-pressing: i.e. the greater your influence and control.
A third assumption is that this consumer data is a natural resource like fish in the sea: there to be harvested and used by anyone who has the investment and technology to do so (subject to the laws of the land). Since the only entities capable of making these investments are companies, direct marketing naturally revolves around helping companies harvest as much as possible data from consumers, and then to use it as efficiently and effectively as possible to ‘press their buttons’ and get them to do what companies want them to do.
So what’s wrong with these assumptions?
Well, first, as sentient beings with their own purposes and priorities, individuals don’t always respond well to having their buttons pushed by others – especially by hundreds of different button-pushers all at the same time. The real secret of marketing effectiveness does not lie in bigger, better button-pushing. It lies in offering consumers better value. (That’s hardly news, but it’s amazing how often marketers think that the better messaging, rather than better value, is the real secret of success.)
Second, rather than seeing consumer data as a commons – a resource which is there to be harvested and used by anybody with the means to do so – we should see it as a private, personal asset. In which case, the main benefits of this asset should accrue to the asset’s creator and generator: the individual.
That is how most individuals see it, already. Thus, Information Commissioner research that shows protecting people’s personal information is now the third highest priority issue for UK citizens, with 83% of individuals nominating it as a cause of concern (behind improving standards in education and preventing crime). And that is what lies behind recent changes to electoral roll regulation which means that today one third of the electoral roll database is no longer available to direct marketers.
Third, if the first two alternative views are right, then the future for direct marketing and CRM lies not in harvesting, selling and using consumer data behind individuals’ backs and mostly without their knowledge, influence or control. Instead, it lies in encouraging and facilitating individuals to volunteer information about what they are planning to do, when.
There are two points to note about this alternative. First, while predictive patterns of possible future behaviour can be derived from historical data about attitudes, attributes, transactions and behaviours, there is only one entity that actually knows the answer to the question: ‘what is this individual going to do next?’. It is the individual himself. Even the best predictive models are exercises in guesswork, and most of the effort that currently goes into predictive modelling is invested in attempts to reduce the levels of error and waste it inevitably creates.
Second, individuals will only bother volunteering significant amounts of information in a sustained fashion if they have a good reason for doing so (if they profit from it and can trust it) and if it is easy for them to do so (see the Personal Knowledge Banks White Paper and personal information management service presentations on www.rightsideup.net).
And that points to a completely different type of service: one that acts for and on behalf of the individual, helping that individual make the most of his personal information.
Today, every technology, public opinion and legislative trend is pointing towards this alternative. A new personal information management or ‘personal information logistics’ industry is emerging – an industry which adds value for individuals by helping them access the right information about the right things at the right time and to acquire, collect, store, secure and protect, analyse, pass on the information they want and need to manage their lives better.
As this industry matures (driven mainly by technology providers, not marketers) the centre of data gravity is beginning to shift: from many different and separate organisations holding small, isolated bits of information about many individuals (and desperately struggling to fill the resulting holes by clever bits of modelling and data fusion), to individuals holding ever larger amounts of data about themselves, and letting chosen organisations access and use discrete elements of this data on a permission-only basis, for clearly defined purposes and clear benefit to the individual.
If you are in marketing, as you look towards the future, where should you be investing? In harvesting ever more data from consumers and using it to ‘press button’. Or in a new model of value creation that wins the consumer as its biggest, most active ally?