The Database

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The Database Powered By Docstoc
					Prof. Rushen Chahal

       The Database

              Prof. Rushen Chahal   1
             Learning objectives
•   Define database
•   Know what should be in a database
•   Know what data to hold and where to get it
•   Be aware of some of the management issues
•   Legal and self-governance to prevent a race to
    the bottom

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          The Definition

 A marketing database is a comprehensive
   collection of interrelated data serving
 multiple applications, allowing timely and
 accurate on-demand retrieval or relevant
data, and having a data management system
        independent of applications.

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                A closer look
• Interrelated data: each customer record is
  connected to every other such that customers
  who have something in common can be picked
  out as a special list, or part of an analysis
• Multiple applications: uses of the database
  (analysis, communication, and service)
• Data management system independent of
  applications: database software must not be part
  of company’s transaction system
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• A marketing database is a list of customers’
  and prospects’ records that enables strategic
  analysis, and individual selections for
  communication and customer service support.
  The data is organized around the customer.

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   Minimal requirements of data
• Personal customer data
• Purchase data: what the customer has bought
• Communication data: campaign history and

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    Minimum software functions
• Name and address processing
• Make selections: generate desired list of
  customers to contact
• Analytical capacity: each response allocated to
  the campaign that generated it
• Generate reports: comparing current
  campaigns with old campaigns

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      Principles of data collection
• Avoid useless data by asking:

• What do I need this database to do?
• What data shall I collect?

• “Only hold data that is required for your
  strategy. If you don’t use it, don’t collect it.”

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                Data to hold
• Data split into “essential now” and “ possible
  future use”
• Data should allow ease of sourcing and
• The cost of raw data must be offset against

• Pg. 27 record from an environmental charity
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                Data sources
• Internal: data obtained by the company’s
  activities (by direct or indirect interface with
  the customer)

• External: data obtained as a compiled list from
  outside the company (outside lists, census…)

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      Direct contact companies
• Online input from customer service
  department (enquiries, request for info.)
• Response to direct marketing prospects lists
• Accounting records
• Billing systems
• Sales transactions/order processing

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 Companies without direct contact
• List purchase: over 5000 in the UK
• Data-building schemes: credit scheme, club
  membership, promotion
• Introduce new contact channels: new
  channels that offer direct contact (start a

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     Other options for indirect contact
•   Product registration/warranty documents
•   Credit card details
•   Subscription details
•   Questionnaire responses
•   in-store offer details
•   Requests for product information
•   Events/promotions requiring response
•   Established direct channels
•   Pg. 29 Football example

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         Database management
•   1. Manage the data sources
•   2. Manage the data entry
•   3. Manage the database
•   4. Manage the applications

• Pg. 31 example

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     1. Manage the data source
• Data arrives via sale—sales ledger—
  accounts—billing—stock control—database
• Different departments want data (name,
  address, products bought…) to be recorded in
  different ways (marketing by customer record,
  accounting wants revenue figures, products
  manager wants per product)

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  Marketing must isolate this data
• Senior management commitment to ensure
• Regular audit trails for data items: a record
• Training for front-end staff
• Service-level agreements between
  departments to delivery data to standard
• Marketing database that can update records
  regularly from “live” systems
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      2. Manage the data entry
• To keep the data uniform and in useable
• A. Verification
• B. Validation
• C. De-duplication
• D. Merge purge

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               A. Verification
• Be sure data is keyed in correctly by entering it
  in twice. If there is discrepancy, the computer
  should show it so it can be fixed.

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               B. Validation
• Checking the accuracy of personal and
  product data provided by the customer:

• Check product service code, addresses
• Audits: checking number of customers against
  number of entries
• Range validation: do any lie outside range?
• Random check: grab 100 and have a look
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            C. De-duplication
• Ensuring database does not contain duplicate
  records of the same customer:
• Often there is enough difference for record
  matching to miss the duplicate
• Different names in the same house
• Customers moving: must replace old record,
  not just add a new one
• Addresses divided into flats: can delete good
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              D. Merge purge
• Merging files into one: perhaps internal and
  external file.
• Important not to mail special offers for new
  customers to existing customers who already pay
  full price!
• Matchkey: used to define the rest of the
  customer record, speeds up process but less
• “Soundex:” compares sound of record taken
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       3. Manage the database
• Manage in-house or by a data bureau?

• Pg. 34 Advantages and disadvantages

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• Keep the data up to date: Customer data
  changes by ~20% per year
  – Verify data against electoral roll and Postcode
    Address File before selecting names and addresses
  – Use only recent data (different for different
  – Check 1000 records regularly: look for common
    mistakes in the sourcing and fix them
• Pg. 37 Saving the Rainforests
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• Auditing: Regular record verification, check
  database records against source of the records
  (systematic version of the 1000 record check
• Archiving: When customer becomes a former
  customer, information is kept for
  analysis/modeling stage (or destroyed)

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           Geeks and Marketers
• Different perspectives
• Pg 31-32 The Balloonist
• Marketers:
   – More concerned about database because it helps
     retain advantage over competitors but technically
• IT:
   – Technically strong but need to know what marketing
     wants to do with the data to decide what technology
     to use

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      4. Manage the application
• Accuracy most important thing to manage!
• Selection: Choosing who to contact from the
  list. Pg. 38 Birthdays and funerals
• Outputs: Fields that are transferred from the
  database to the materials going to the
  customer (must be in a usable form) Pg. 39
• Managing campaign responses: URN (unique
  reference number), response (Y/N) code
  placed on database
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        The law governing DDM
• The Data Protection Act: regulates the use of
  personal information
• The 1998 Data Protection Act: increases
  protection by widening definition of personal
  data, including business lists, requiring company
  to alert customers as to their rights under this
  Act, alert customers if company buys their info.,
  and companies must honor No Call/Mail lists.
• Pg. 40
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• The British Code of Advertising Practice: rules
  include placing “opt-out” option, honor
  request to not receive mailings, notifying
  customers of 3P use of their information
• The Direct Mail Services Standards Board:
  accreditation scheme
• Pg. 41-42
• Why would companies regulate themselves?
  (race to the bottom)
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          European legislation
• European legislation is notoriously non-
  uniform and complex
• The EU might possibly harmonize the laws
  but, for now, companies must research the
  laws of each country in which they plan to

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