The Direct Approach: New mandate for data

Today's data-driven marketing is more exciting than ever but we have a responsibility to put it at the top of company agendas.

Let me regale you with a couple of tales. Or, rather, with a film storyline and a speech by the prime minister that coincided to leave me wondering about marketers' future responsibility for customer data.

Code 46 is an under-acclaimed addition to the genre of "Big Brother" films inspired by such masterpieces as George Orwell's 1984 and Aldous Huxley's Brave New World. The film stars Tim Robbins and was released about a year ago.

The action is set in a global society paranoid about security. It is underpinned by a rather more sinister sub-text of information manipulation and social discrimination. Society's use of data about its citizens' lifestyles, relationships and parental lineage has reached the point where their lives are governed by a global system of identity cards. Those who have a valid card can live in and travel between the sophisticated conurbations; those without are consigned to the wastelands.

Robbins' character gamely falls for a female outsider and battles the system to avoid being cast out himself.

Shortly after Code 46 was released, Tony Blair made an impassioned speech in defence of identity cards. He said that ID cards would "protect rather than erode civil liberties", adding that the bill to implement such measures would "ensure access to 'specified public services' would be linked to production of a valid ID card". He had not used these words publicly before, and they brought home the message that if you don't have a card, you won't get services.

The point is that there is a fine balance to be struck between the collection of information and its use. And someone has to take responsibility.

Some years ago, Maurice Saatchi made an insightful speech on the looming battle between "rights to privacy" and "freedom of information". These very battles are now played out every day in places as different as the internet, the European Court of Human Rights and high-street stores. Such issues have, of course, been brought into even more stark relief by global terrorism and the need for information to "protect and prosecute".

The stark truth is that commercial organisations hold far more data about the citizens of the developed world than any government. This places a huge responsibility on those organisations and the people who collect and use that data.

Marketers must take responsibility for the data they collect, how they collect it, how it is stored, safeguarded and used. While marketers are the key holders to this data, there are three principal stakeholders: shareholders, customers and society.

Today's information and communication technology enables marketers to be ever more efficient in spending their budgets. The great weakness is that marketing does not yet command the boardroom's appreciation of its responsibility for customer data.

Executives are not yet accustomed to joining up conversations about optimising the return on customers with those about maximising shareholder value. Such strategic cohesion can happen only if there is a corporate understanding of the organisation's customer information and marketing's responsibility for it.

As the marketing analyst Clive Humby recently observed, very few company directors can describe their organisation's target market, its key segments or customer characteristics. Most can wax lyrical about the product and the company, perhaps even about the brand and its values. But very few will think about, let alone be able to articulate, the data-driven customer segmentation strategy and its role in growing the business. All that data, but such a lack of appreciation of its meaning and strategic value.

If that's even half the truth about how poorly organisations make the connection between customer data and shareholder value, marketing has a long way to go to imprint customer metrics on corporate strategy.

But what of the customer? Many marketers are drawn to the dazzling lights of new media and the data-rich interactions these enable with customers.

Yet little of the data is actually used to the direct benefit of the customers themselves.

Consider all the customer and related data held by three companies: the telecom company that provides your telephone, television and internet services, your bank and a furniture retailer. Imagine you move house.

Then watch the fun begin as the telephone and internet departments try to arrange the transfer and upgrade of your services; your bank makes a hash of updating its databases for your different accounts; and the furniture retailer, from which you've ordered a sofa, argues with you about whether its retail outlet or its direct delivery franchise is responsible for delivering the wrong items eight weeks late.

All that data and all that technology, but still dinner party conversations are full of everyday tales of companies letting down their long-standing customers. Who says there's no such thing as bad publicity?

And just how far will you go in sacking your customers? It has become fashionable in marketing circles to talk not about targeting customers but choosing them - and identifying which ones to drop. Is this really how we should use customer data? Would it not be better to concentrate on providing the right level of service to existing customers before ditching the less profitable ones?

Today's data-driven marketing is more exciting than ever. But whether you are a marketer concerned about data, or a data specialist working in marketing, you have an unfulfilled mission: to put data on the top table.

You have a responsibility to ensure data's value to shareholders is recognised and developed. You have a responsibility to ensure your customers' data is used in their best interests and to their greatest benefit.

As for your social responsibility for customer data, that's something this article will leave for the film-makers in Hollywood and the elected guardians of our freedoms and privacies to decide upon. But it is a responsibility that must be a part of your everyday marketing conscience.

Technology has given marketing its chance to grab a seat at the top table of business. If it cannot sell the value of customer data and fulfil its corporate responsibility, then marketing has no right to fill that seat.

- Neil Morris is the deputy managing director of the Institute of Direct Marketing.

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