UK Companies Switch Data-Driven Marketing to CRM

25 February 2004

Ninety-three per cent of medium-to large British companies (average annual turnover £360 million) now deploy their marketing databases for direct mail campaigns -- primarily to existing customers.

Around 50% of company marketers also use their databases to drive internet marketing promotions, although only a relative few (29%) harness their data to telemarketing.

The bias towards direct mail is understandable, reflecting as it does the origins of most marketing databases -- 68% of respondents built their database from customer accounts information.

Enquiry data was used by 46% of companies, while responses to internet and mail campaigns each contributed to the database in 27% of companies.

A majority of respondents (59%) now use their databases for customer retention purposes, while 62% of firms have a CRM strategy in place. The corporate importance of CRM was given a mean score of 7.92 out of ten.

It also emerged that retention marketing has overtaken new customer prospection, with only 52% or respondents naming the latter in relation to database usage.

The survey was sponsored by the Direct Mail Information Service, itself funded by the Royal Mail. Comments DMIS managing director Jo Howard-Brown: "As marketing databases mature, so they are being used for the more long-term goal of maintaining customer relationships."

Prospection now tends to rely on the use of third party lists, with just 39% of companies holding prospect details on their own database. External lists are rented by 46% of companies, three quarters of which do so for prospection. Which, as Howard-Brown observes, "is good news for the direct marketing industry".

She then switched to schoolmarm mode: "Companies should also be aware that prospecting is the starting point of their customer management, not a stand-alone programme. Using marketing databases to win customers as well as to retain them will be the mark of the most successful practitioners.”

The companies surveyed all had annual marketing budgets exceeding £500,000, with an average yearly spend of £11 million.

News source: Direct Mail Information Service; additional content by WARC staff