There is no question we live in remarkable times for marketers. Tremendous technology advancements and access to volumes of data enable companies to communicate and connect with their prospects and customers in ways only imagined twenty years ago.

The promise of Big Data leads many marketers to spend an enormous amount of money on technology. Many brands and agencies lose sight of the reason they are leveraging data in the first place and that is to drive more sales. An arms race ensues and suddenly infrastructure costs soar and ROI shrinks.

Reality Sets In

Many marketers have been to too many conferences that evangelize a real-time, data-driven 360 degree view of their customers and prospects. Understanding everything about your customer in real time sounds very compelling and is the Holy Grail for most marketers. For most brands, this dream will never pay off and they spend too much money on technology that ultimately erodes their ROI.

We’ve seen this play out multiple times. An RFP is received with ambitious objectives such as integrating multiple channels for communication; the ability to communicate in real time; and a full and complete view of the customer’s relationship across all touchpoints.

But here’s the rub. The price to build this environment is enormous. The build cost can and most often does stretch into the millions and the maintenance costs can exceed the build price. Unless you are a Fortune 500 company and have an enormous budget, the investment is hard to justify. Millions of dollars will be spent on infrastructure and technology without any campaign execution.

Many companies shelve the project. It’s simply too complex, too expensive and takes too long. Once campaigns are finally deployed, any ROI created by use of data is evaporated.

Another Path

There is no doubt that data-driven marketing works. The power of customer data combined with third-party data drives smarter targeting and allows marketers to selectively target their highest value prospects. The key is to leverage data efficiently without over-investing in technology.

Start by stepping back and determining a single objective that would be solved by the better use of data. Increasing the effectiveness of a single channel such as direct mail is often a great place to start. Then turn the objective into a question, such as “What if through smarter targeting I could decrease my direct mail costs and increase my ROI?” Now apply data to solve for your answer.

There are firms in the marketplace that can quickly combine customer data with relevant third party data to rapidly achieve unique acquisition models. The models are based on the profile of the current customer base and their behaviors. While in the grand scheme of customer modeling this is a relatively straightforward exercise, in many cases this type of modeling results in massive gains.

Once an initial model is constructed and tested against the single objective it becomes easier to continue to invest more dollars into data-driven campaigns. It is imperative to work with a firm that does not require a massive upfront investment just to begin to prove the effectiveness of using data. The ROI must appear in the initial campaign results, not tied to the promise that once there is a large infrastructure in place, the ROI will follow.

Technology has evolved to allow this approach to be a reality. There is simply no reason to let infrastructure costs be a hindrance to achieving a data-driven strategy.


Ross Shelleman is CEO of Target Data, which unlocks the power of customer data through targeted marketing campaign execution that enables businesses to quickly identify, attract and keep their highest value customers.

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