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Clean customer database as an asset

MM: So it seems to me that the first order of business for an engagement partner is to establish a clean customer database. And more specifically, one that allows me to calculate with a fair degree of probability the predicted, long-term revenue for database records. And the predicted long-term profit of a database record.

Right.

MM: That’s industrial, factory kind of thinking.

Yes.

MM: It’s unitized work or units of work. Right?

Yes.

MM: The first job is, “Look. You’re going to pay us whatever the cost is to create a database record.”

Right.

MM: That then becomes the baseline for measuring the effectiveness of what we do.

Yes.

MM: That seems to me to be the value-capture mechanism. Here’s the other thing that’s kind of interesting that we found in the larger field of digital asset management. In the database marketing area, direct marketers traditionally capitalize the costs of a customer database.

Right.

MM: It’s an asset on the balance sheet. Admittedly, it’s an intangible asset, but it’s an asset that has inferred or derived economic value.

Right.

MM: So it seems to me that in terms of the engagement partners, the purpose of an engagement partner firm is to make tangible and concrete the value of a database record.

Right. Totally agree. Yes.

MM: Do it in such a way that you can satisfy GAAP principles. So as now to make it a formal asset class on the corporate balance sheet.

Yes.

MM: That changes the value proposition. Because that drives share price.

Absolutely.

MM: Ultimately, engagement really entails quantifying customer database record contributions to share price.

Yes. That’s right. Absolutely. That’s exactly why, with engagement at the center of that discussion, you have to be able to capture and store and understand and predict the impact that engagement has on your bottom line.

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