The Classic In-House vs. Outsourced Conversation
It came up again — should we outsource our Marketing Database or build it in-house? A conversation I’ve heard over and over in my nearly 20 years in database marketing. In the old days, I had more of a personal agenda than I do now. Since we built marketing databases for a living, we always answered the question with a resounding, “Outsource, of course!”
Since leaving that company, I’ve reflected on the question. It still comes up when the Database Marketing/CRM becomes a strategic company priority. And the conclusion I come to now is that the question itself is inherently flawed. It’s not a matter of where the bill gets paid. It’s a matter of understanding what a marketing database really is, having the right resources in place, and, most importantly, retaining people with the right mindset.
A marketing database is extremely different than a transactional or operational database. It’s all about the data, getting it right, massaging it, understanding it and making it grow. It starts with messy data provided by us messy consumers. We move all the time and forget to tell you, so you have to run NCOA. We expect you to know who we are, so you have to share data with Call Centers and websites. We buy things and then stop buying things and don’t tell you why. We do things that change our buying habits completely — things like geting married, having babies and retiring.
The technical team supporting the marketing database needs to know all of these things, and know how to deal with them. NCOA is a common term surrounding the marketing database, and outsourced providers know how to manage data in and out, and have the vendor relationships set up. Predictive models make us smarter every day, and in order to be effective they need to be as closely connected to the database as possible. Triggered marketing programs need to be there when the customer is interacting with the brand, not prioritized in a development cue behind the financial system.
The mindset of the IT group is very important. Do they value data? Do they understand why the marketing database is so important to the organization? One of my greatest meetings recently was with an IT Director who wondered why his organization wasn’t maximizing the opportunities to increase revenue from the existing customer base. I wanted to hug him. Wow, this company can have a successful Database Marketing program because the tech team GETS IT!
So the real question is, “Do we have the right skill sets in place to build and manage a marketing database as part of our internal IT infrastructure?”
A successful marketing database is never done, there are always more applications to be built, more models to be refined, more digging into the data. If you have an internal IT team that can embrace that dynamic, then you have the resources to build a Marketing Database internally. If your IT team heads for the hills when they hear the Marketing Department calling, it might be best to consider an outsourced solution.
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