Database Marketing for PSF
Database Marketing for PSF

One specific aspect of marketing information systems that is being heavily ‘sold’ into professional service firms by outside consultants is database marketing. There appears to be something of a ‘panacea’ image that has rapidly become associated with database marketing and many firms that are appointing an in-house marketing professional for the first time are asking for marketing databases to be built before any other marketing activities are undertaken.

While database marketing sounds like a scientific, technologically sophisticated and rigorous approach to marketing, the reality of such databases in most PSFs is that it is actually concerned essentially with what we have been happy to label, until now, mailing lists. It is simply the recording on a computer database of contact names, client and potential client addresses, previous contact with the firm and any details of client information and needs from client files. The rapid growth of database marketing as an approach in the UK has basically followed the trend towards direct mail as a marketing communications medium and has been particularly important in building the financial services ‘junk mail’ marketing culture.

Proponents of database marketing see two major advantages from its approach:

(a)        It enables marketers to specifically target their marketing communi­cations activities thus increasing the effectiveness of budget spent.

(b)       Databases can be used to test communications campaigns, fee changes, new services, etc.

While the first of these advantages may well have some basis in reality, the level of use of direct mail and telemarketing in most professional service firms is not of a sufficient size and scale to warrant a full-blown database. The second strength of database marketing effectively does nothing more than provide a sampling frame for marketing research. It gives no more aid to the decision maker than producing a list of clients, etc. that they may seek specific marketing information from.

Database marketing can provide some benefits in sophisticated marketing environments in large companies. This does not, however, mean that it provides the answer to the marketing needs of marketing unsophisticated professional partnerships. PSFs should therefore beware of large investments in technology and consultancy in pur­chasing and establishing a marketing database and expecting this to solve the firm’s marketing problems. In most cases the potential and realized benefits of marketing databases in professional service firms do not justify the investment in them. Sarah writes for allpro and various sports and business websites.

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