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Correspondence:Merlin StoneThe Customer Framework,Lily Hill House, Lily Hill Road,

Ascot, RG12 2SJ, UK.E-mail: [email protected]

In 1980, at the age of 32, I left academiafor a spell in industry. I joined theEuropean HQ of Rank Xerox,where I worked in business planning andcompetitive intelligence, monitoring andforecasting the devastating impact of

Japanese copier manufacturers on our business. I had been consulting to RankXerox for a year, working on therelationship between service satisfactionand perceptions of response and repair times, merging service records with theperceptions of survey results and analysingthe le using SPSS. A central nding wasthat the halo effect was alive and well.Unreliable machines made customers thinkthat engineers took longer to arrive thanthey actually did!

Another part of my responsibilities wasto help Rank Xerox develop a framework

for managing its emerging systems business(word processing, daisy-wheel printing, laser printing and the rst true windows product,the Xerox 8000 information processingsystem, based on the original Star workstation whose windows idea wasadopted by Apple). I was one of the fewmanagers who learnt how to use a wordprocessor (I insisted that one should knowhow to use the products one sold). Thisattracted many wisecracks from senior managers. Got a new job, then, Merlin? ,they asked, when they saw me tappingaway. Given the importance of Xerox sservice contract business (made possibleby the unreliability of their machines),I decided to learn more about service.I worked with an independent consultant,Dr Tony Wild, who was working onXerox s problems and who educated me in

Opinion Piece

Reections on a life in databasemarketingReceived (in revised form): 5 th November 2012

Merlin Stoneis Head of Research at The Customer Framework. He is a leading expert in customer management and in nancial servicesmarketing. He has been involved in many consultancy and research projects, including customer management assessments, withbanks and insurance companies and with suppliers of systems to nancial services companies. Stone has written many reportson nancial services issues, particularly in relation to savings, pensions, long-term investments and distribution. He is authoror co-author of many articles and 30 books on customer management, including CRM in Financial Services and Key Account Management in Financial Services . He is on the editorial advisory boards of several academic journals, including the Journal of Financial Services Marketing . He has a rst-class honours degree and Doctorate in Economics from Sussex University, UK. Parallelto his business career, he has also pursued a full academic career, holding senior posts at various universities. He is now a visitingprofessor at De Montfort, Oxford Brookes and Portsmouth universities and also teaches Economics for Open University.

ABSTRACT This article reects on the author s career in database marketing andcustomer relationship management, explaining what took him into this line of workover 30 years ago and identifying the main changes in client requirements that he hasobserved.

Journal of Database Marketing & Customer Strategy Management (2012) 19, 214 218.doi: 10.1057/dbm.2012.27

Keywords: information technology ; database marketing ; customer relationshipmanagement ; customer insight ; social media

2012 Macmillan Publishers Ltd. 1741-2439 Database Marketing & Customer Strategy Management Vol. 19, 4, 214218

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Reections on a life in database marketing

the intricacies of spare part management.This cooperation resulted later in our book,Field Service Management , the rst book (wethink) compiled on the Xerox 8000 system.

In those days, Rank Xerox s

business planning community used APLto manipulate the many matrices needed for complex, interlocking plans. Then, alongcame one of the rst spreadsheet programs,Visicalc. We bought an Apple IIe and(unbelievably, these days) asked universityacademics (operations researchers fromSussex University, my alma mater) toprogramme a model for analysing RankXerox s service business.

In 1983, I was given the opportunityunder the Rank Xerox networking schemeto allow managers to leave and contractback while working from home. I took it.This gave me a free Xerox 820 computer together with its massive 8 oppy diskdrives and daisy-wheel printer. Meanwhile,I answered a job advertisement for a senior post at Henley Management Collegeand negotiated it down to a part-timepost, giving me a great foundation for a consultancy career. One of my tasksat Henley was to develop a short course

for senior marketers, Marketing the NewRealities, which I did in conjunction withthe consultancy Marketing Improvements.It was great training for me too.

My condence in dealing with senior management was greatly boosted by JimCoulson, a wise consultant from Californiawho ran several senior managementdevelopment programmes for Rank Xerox.He asked me to present on them whileI was still at Xerox and gave me a contract

to work on them after I left the company.He also gave me work, including some atXerox s laser printer division in LosAngeles. I had a lot of luck and somereally good friends!

I was by then something of an experton computer marketing, did manyprojects for computer companies andwrote a book, How to Market Computers

and Ofce Systems , with Hamish Macarthur,an experienced IT analyst and consultant.I developed a training programme onthe subject that I ran in many countries.With Hamish, I wrote regular articles on

IT marketing for the main magazine for recruiting IT marketing and salesprofessionals.

As luck would have it, at the sametime I was asked to contribute toa training programme being run for RankXerox UK s marketing department byan experienced training consultant, KevinMartin, whom I had met while workingon other training projects. A senior member of this department was Mike Wallbridge,who managed the company s marketingcommunications. When in 1984 he movedalong with many others to British Telecomto help with the newly privatisedcompany s marketing, he contactedme and asked me to see him.

Mike was very kind, telling me I was theonly marketing person in Rank Xerox(whose management was dominated byex-sales people) who had made sense tohim. Could I help him with his massiveprogram for creating and using British

Telecom s rst truly national customer database? Ever the optimist, I reasoned thatbecause I knew about the marketing of computers, and the associated skills andchange management requirements (whichI had learnt about from Kevin), I couldlearn about the use of computers inmarketing. So I entered the world of database marketing. By now, Kevin andI had formed a company, and we neededall the good people we could get to help

British Telecom.At that time, the main very large usersof customer databases were the big directmail marketers, such as the Reader s DigesAmerican Express and mail order catalogueoperators. Barclaycard had recently burstonto the scene, while utilities generallyused their customer databases for emergencyservice management central heating


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maintenance contracts were relativelynew. In the next few years, company after company lined up for the services of our business, mainly to help them implementnew marketing approaches using customer

data. The most dramatic success wasachieved by Direct Line, who had launchedin 1985.

British Telecom dominated our clientbase, but British Airways, British Gas andothers completed our portfolio. It was thenthat I started my Database Users Group,so that companies could learn from eachother. Its rst members included BritishTelecom, British Airways, Homebase (oneof the rst loyalty card operators with itsSpend and Save scheme) and others.

British Telecom s Customer Communications Unit had the toughtask of rationalising myriad fragmentedcommunications initiatives to create moreeffect at lower cost. Mike s project resultedin the company being able to write toall of its customers with the same (or relevant) messages. Managing this Unitrequired real skill, and Adrian Hosford hadbeen recruited from ICL to build a teamof some of the best marketers in the United

Kingdom. He succeeded, and I am still incontact with many of them, who taught meso much about direct marketing.

One of the critical inuences on myearly work was my connection withAndersen Consulting (now Accenture).They were the main suppliers of databasemarketing technology to British Telecom.I learnt much from its senior people,particularly Nigel Backwith and Bob Shaw(Bob and I wrote one of the rst books

to explain how to do all this Database Marketing ). Andersens referred me in toBritish Airways. And it was from Andersensthat I recruited Neil Woodock (nowChairman and CEO of The Customer Framework) into our company.

Customer database technology was thenclunky , as they put it. Databases werenot relational, but in most cases at les,

which made processing them expensiveand time-consuming. Relational databaseshad appeared, but they were expensiveand required complex programming. Theculture of data management that we accept

as normal these days was absent, and manycorners were cut and errors made. Manymarketing managers had no idea whata customer database was, what it could do,and its benets, so much of our workinvolved communication, explanation andtraining.

With the databases came contact centres,but it was compared with today a cosyworld. All you needed were addresses andtelephone numbers, as e-mail and mobiletelephones were rare. Instead, we had faxes,pagers and other now rarely used devices,which generally were not top priority justgetting the basics of name, address andxed-line telephone number onto databasesand learning how to use them was thefocus of most of our clients. For businesscontact databases, life was as yetuncomplicated by the emergence of homeworking (though I featured in BTcampaigns along with my family as one of the rst true home workers). The idea was

just taking root that small businesscustomers were more effectively managedusing Telephone Account Management (a telephone and a customer database rather than a cheap sales person). Yes, this wasanother book, this time with ChrisWheeler, one of my consulting colleagues.The vital contact histories were another matter. As they resulted from telephonecalls and direct mail exchanges, theyintroduced an additional set of concerns

about data quality.I decided in 1989 to go back intoacademia. This led me to a Deanship of theFaculty of Human Sciences at KingstonUniversity, from which position I was able tosupport the privatisation out of the universityof what was to become the Institute of Direct Marketing, still a global leader indeveloping the skills that we all need.


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Fast forward nearly 30 years, to a worldof the Internet, smartphones and tabletcomputers, social media and customer-managed data, and you can imagine howdatabase marketing has changed not just

in how customers expect to be managed,but how managers expect to see, analyseand use customer data or insight. By now,my colleagues and I at The Customer Framework had been assessing the qualityof customer management in many industriesand all over the world. This track recordputs us in a good position to monitor andmake sense of new developments.

For example, in most of our large clientsat The Customer Framework, a key senior individual is the head of customer insight,who manages customer data and (usually)market research. Their responsibility rangesfrom producing insights to support businessand marketing strategies, to how insightshould be generated and used duringinteractions with individual customers.They are involved in the move towardsreal-time analytics and in how insight canbe managed and used across many channels,from physical outlets or contact points,through contact centres, to the Web and

mobile. In many companies, their remitextends to issues such as the managementof payments, bringing them into contactwith nancial services providers, toconsumer location data, where relationshipswith mobile network operators areimportant. Their suppliers extend beyondmarketing agencies and data managementcompanies to suppliers of a wide range of software, lately including apps mainlyfor iPhones and Android devices.

Another area that has now raised its(sometimes ugly) head is the area of socialinsight. I avoid the term social media ,because social insight comes from manysources other than those that are classiedstrictly as social media. Yes, Facebookand the many other suppliers of social mediachannels are important, but customer-to-customer communications take place in many

other ways on the Web, sometimes on thesites of the company or its competitors.Social insight is a little bit like the Wild Westat the moment anything is possible, but itis very hard to see an ordered structure at the

moment. This is partly because socialinteractions are developing so fast, but alsopartly because the importance of social insightis not yet clear in many sectors, while socialinteraction patterns are still developingvery fast. Not surprisingly, we are engagedwith many clients to work on socialCRM and are active researchers in this area.

An example of the evolution of thesocial approach is LinkedIn, which we takeseriously as a source of information andinsight. We saw the importance of linkingall members of The Customer Frameworkteam and linking to clients and prospects.I personally have many connections (over 2000 and growing). Until 3 years ago,I was reactive, accepting but not sendinginvitations. I was worried about givingmore than I got. Then I realised thatLinkedIn was a better way of managingbusiness contacts than a conventionaldatabase. So I used the facility to inviteall members of my address book to join.

This led to a surge in my contact numbers.We now enhance The Customer Framework s database with informationfrom LinkedIn, and refer back to it whenwe get enquiries. We have formed a groupon LinkedIn for our Customer Horizonsdiscussion group.

Each of us uses it in different ways. Wewere recently contracted by a softwaresupplier to set up a group of senior marketers to help the supplier get input

into its strategy. We built a list of bestcontacts, the criteria for which includedthat they should be rst-order linked tous on LinkedIn. We found some that wethought were good prospects but weresecond-order contacts and already onour database. So we rst invited them tobecome rst-order contacts, as we took thisto be an important sign of their willingness


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to listen to and become involved with us.When we nally e-mailed our target list,we achieved the required membershipwithin a week.

In business-to-business marketing in

general, LinkedIn has become veryimportant. I am still intrigued to see wherethe latest LinkedIn feature, the pushedendorsement, will take LinkedIn. Duringa recent assignment for a companyspecialising in software for small businesses,I met a distributor for whom LinkedIn wasone of his prime prospecting tools. Helooked at the connections of clients andprospects and found ways to contact them.

Another important inuence of thissocial revolution has been customer empowerment. The idea that customer experience management is somethingsuppliers fully control has become unrealistic.Customers understand that they can shapethe experience, perhaps even have theresponsibility to do so; otherwise, their experience may be poor. So, in dealingswith companies, many customers takeadvice from the Web, by seeing whatexperiences other customers have had, andwhat they achieved, before deciding on their

own moves. More widely, customers accessto a variety of ways of dealing with supplierscan lead to a kind of revolution. For example, power utilities, who at one stagethought that smart metering would yieldthem masses of new data about customers(with its advantages and problems), haverealised that some customers reject thismodel, preferring instead to use consumer-oriented independent applications for tracking and managing usage.

This move towards customer empowerment is (or should be) changingthe way marketers think about how theymanage customers and use insight aboutcustomers. However, many companies arehaving difculty getting to grips with thisapproach. This may be because they donot have the skills to manage a moreevenly balanced relationship with customers.

It may be because they have invested somuch in managing customers in a moredirective manner. Or it may be becausethey are culturally so committed to thedirective approach. This is gradually

changing, but it does mean that manyof the more advanced users of the socialapproach (and I do not mean just in howto contact customers, but truly social,from business strategy and product / servicedesign onwards) are the packagedconsumer goods companies, for whomthe social approach creates the possibilityof cost-effective dialogue with largenumbers of individual customers. The olddirective approach, using a customer database to contact customers when thesupplier determined, was not viable, sotheir culture was not contaminated bythis approach.

As a hybrid consultant and academic,this new world of customer managementis good news. New ideas are needed, butalso great honesty. As someone who hasstrongly opposed hyping up ideas, I amhappy to be able to save our customersmoney by reducing their sense of panicthat they need to be doing lots more,

very quickly. A core principle of the socialapproach is to be guided by what customerssay, and that means lots of listening, tryingout new things and seeing what customersthink about them, and of course beingguided by customers as to what to try.The great thing about the social world isthat information about what customersthink and want is out there on the Weband easily accessible and analysable.Moving too fast and getting it wrong

is more dangerous than a steady movetowards becoming more social in customer management. And still, the approach isonly justied if it helps companies fullthe age-old customer managementobjectives of better and / or cheaper customer acquisition, retention anddevelopment, in ways that engagecustomers better.


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