Databases don’t build customer loyalty or profits

I'm re-reading my old standby...Strategic Database Marketing by Arthur M. Hughes.   As many of you know, this has been my bible since it was first published.  This is the third addition and I'm flattered to have some cases in this new updated version that now covers email as a database marketing tool.

Anyway, I'm just starting this today, and I'm already struck by the following statement:

Databases don’t build customer loyalty or profits.   

What builds loyalty and profits are creative marketing strategies using customized communications based on that database.

Simple, obvious.

Comments

[Vincent Flanders]

it's "edition" not "addition"

[Sivaraman Swaminathan]

Nice post and thought provoking too.

I infact remember reading this comment too:

"Customers are not upset if you don't communicate but they really get upset if you forget!"

Collecting a database and not doing anything has serious ramifications to any business.

[Jacob Leffler]

I couldn't agree more.

[DealFeed Blogger]

"The world does not require so much to be informed as reminded", Hannah Moore, English Writer (1745-1833)

[Tim Whelan]

I totally agree with your opening line and statement. A database is just a tool. Unfortunately those who sell them such as CRM software companies don’t understand this. How and why you use it will have many implications on any business. One thing for sure it has nothing directly to do with customer loyalty.

Unfortunately neither does your assumption "What builds loyalty and profits are creative marketing strategies using customized communications based on that database." This will bring in first tier sales and open the doors to a make or brake proposition as to a loyalty buy in by the customer/client, but it won’t drive or sustain it. This really has little to do with what defines or develops customer loyalty.

For more info on this you mite want to check out http://cdccustomerservice.blogspot.com or http://www.customerdevelopmentcenter.com

Here you will find some great articles focusing in the area of customer loyalty.

Creative marketing delivers promises and perceptions that often fail the customer often destroying the loyalty connection. With the web the effect of this on an online business is at first negligible because of the shear number of potential customers. However the return sales drop sharply and that is why.

That doesn't mean that you dump what you’re doing. It just means you need to redefine to develop the real loyalty that seems to avoid 95% of the businesses. You may want to explore the power of customer experience management where the real Loyalty can be developed.