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Consensual database marketing

MM: The other aspect… I want to bring up this notion of a preference center. About 15 years ago in a Direct Magazine or Catalog Age…. I read a fascinating article that came out of IBM around this notion of “consensual database marketing.” This was back when Lou Gerstner just came in. I guess this was early 1990s or late 1980s when IBM got into big trouble. Of the many things their customers complained about, the article covered the inundation of IBM customers with direct mail. EDP and IS managers would get four and five direct-mail pieces a day from IBM. Worse still, 80 percent of these mailers related systems long retired and thus no longer relevant.

Right.

MM: So these IS managers went to their IBM account and said, “Stop sending me this crap.”

Right.

MM: The poor account executive found that there were some 70 or 80 databases within IBM that were mailing this stuff into this poor IS manager’s office.

Yes.

MM: So Gerstner said, “Okay. Cut the crap. As of March 1st, we will cease all mailing to all of our customers.” Secondly, on March 2nd, all of our account executives are going to go to each one of our accounts with a clipboard. You’re going to tell me what categories you want to hear about from IBM. Do you want to hear about storage? “Yes.” “What category or subcategories about storage do you want to hear about?” Oh. DASD? Great. “Do you want to hear about terminals?” “Yes.” Do you want to hear about 3270 terminals? “Yes.” Do you want to hear about PCs? “Yes.”

Yes.

MM: So they created a consensual database record in terms of what they wanted to hear about.

Exactly.

Information preferenda

MM: In my book, “Firebrands,” I kind of expanded that into what I call “information preferenda.” Now, “preferenda,” is a term from biology. It relates to all the stuff that attracts the attention of a motile organism. Thus, sunlight and water constitute preferenda of a plant. Information preferenda describes all the classes of information by media type and manner of fulfillment that a knowledge worker would want to consume.

Yes.

MM: Back to IBM and their consensual marketing database. They requalified their entire customer base, defining what each customers wants to hear from IBM and explicitly what areas each customer does not to receive communications or mailers.

Yes.

MM: The net result, IBM realized an $87 million cost-savings in the first year.

Wow.

MM: They got a 4 times great lift-they sold four times as much stuff on a drastically reduced mailing schedule.

Yes? Wow.

MM: Your idea of a preference center really syncs up nicely with IBM’s consensual marketing data and my notice knowledge worker preferenda.

Right.

You now, it’s not just, “What products do you want to hear about?” But, “What categories do you want to hear about?” That leaves open the door to engage the customer in the future when we have a real offering in that category.

Yes. That’s right.

Again, from a marketing standpoint, “What channels do you want to be communicating on? Do you want e-mail? Do you want it just on your mobile? Do you want to come to us? Do you want us to come to you?”

Allow them. This is a hypothetical/theoretical ideal, maybe. But the consumer — again — because as you said before… The consumer is now predisposed to that level of control.

If you look at any channel these days pretty much … Take TV and TiVo, for example…

I can shift time. I can skip your commercials. I choose what I want to do.

The consumer is becoming accustomed to that. So much so now, I would argue, that like you said before… “If you don’t offer that, then I don’t need you.”

Frankly, if you don’t offer that, before long… back to my earlier comment about the “programmable web,” there will probably be someone that will hack your system such that I can actually control what I get and don’t get, anyway.

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