Database Dangers?

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IMC students who have already completed IMC 616 – Direct Marketing will know how big of a role database marketing can play in a business’s marketing and communications mix. Using database marketing can drive great success when the savvy marketer leverages its capability to target the perfect customer. Renting a list can be a great way to put direct mail into the right homes and acquire new customers.

But do we take a risk when we use databases to market? In this day and age, there is more and more information being logged about customers, especially with the proliferation of comprehensive CRM systems. What happens when more information than just a name and address are being collected? Additional information makes it possible to segment lists or perform predictive analytics. Or, it might provide a customer service representative with guidance for a specific customer or situation. However, customers might not always be happy about some of the information being collected about them. Mike Seay is the perfect example.

OfficeMax placed the blame on a data broker when Seay received a letter addressed to “Daughter Killed in Car Crash or Current Business.” Seay tragically lost his daughter in a car crash a year earlier, resulting in an upsetting incident for him and a very public blunder for the office supply company. Seay couldn’t have been happy to receive the letter or to know anyone was logging this information about him. It seems likely that someone entered this information into a CRM record to alert his or her colleagues to be sympathetic, but it should never have been part of the information set provided by a data broker. Do these types of incidents make companies reconsider list rental, or at least which brokers they work with? It should, as their reputation and public image are at risk.

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This isn’t the only high profile incident of this nature to occur recently. Bank of America and the Golden Key Society had to apologize in early February when mail pieces were directed to “Lisa is a Slut Mcintire.” Certainly, no company wants to be calling their prospective customers “sluts.” This incident received attention on social media when Lisa shared the letters. The story ended up gaining attention from national news outlets.

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CRM systems are very powerful and allow us to interact with our customers in incredible ways. However, any company that is in the business of sharing their customer data, or borrowing data from others, should do so cautiously. Otherwise, they could have a similar PR disaster on their hands.

Who can forget all of the trouble Dwight Schrute got himself into on The Office when he attempted to use Michael Scotts (albeit rudimentary and index card-based) CRM system? Dwight stole the written information Michael had kept about his client, but failed to use it tactfully (or in accordance with the confusing color coding system). How are any of us (besides the original record keeper) supposed to know why certain pieces of information are being logged in a database and how that information is to be used?

What are your thoughts? Are the risks worth the rewards? Are these isolated incidents or just the tip of the iceberg?

OfficeMax has already indicated that it will perform keyword searches to avoid more incidents like these. I think any organization leveraging database marketing would be well advised to take similar precautions. With such an approach, businesses can continue to realize the substantial benefits of database marketing, while minimizing their risk.

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