Databases Are Less Predictive in a Recession

Expensive must-have features of yesterday are today's can-live-withouts.

Marketers spend significant time and money on building databases with years of consumer of transactions and attitudinal information. It's a hard enough and expensive enough process to maintain as to be considered a real competitive advantage for those that have the data.

Some companies in travel or luxury goods have gone on the record to say that consumer behavior has changed so much that their historical data is useless in many cases. John Wallis, Hyatt's global head of marketing and brand strategy, said in a recent interview, "The customer who's traveling today isn't the one who was traveling in 2008. We've been concentrating on customers who've traveled since then, because that means they have a job and a budget."

Jim Motrinec, Senior Consumer Marketing Director, ProCirc Circulation Management, with whom I work, sees his company's clients affected by both the economy and the digital world. "Depending on your product, your core audience's buying habits may have permanently changed. Or there's no longer a demand for the old incarnation of whatever it was. Maybe a new market opened. Maybe the data you have is now more useful for suppression versus prospecting."

Yet, he still believes in maintaining historical data. "If data is uncertain or less reliable then you have to go back to the drawing board and get creative with educated testing to try to open up new opportunities. It's probably more crucial now to be recording as much data as you can while we're in such a transitional period."

The database marketing manager at Southwest Airlines, Steve Crowell has a similar viewpoint. He told AdAge that while the most recent and relevant data are important, if your model still differentiates among your customers accurately, you don't need to throw out the model.

Lorraine Shanley, a principal in Market Partners International, which produces the newsletter, Publishing Trends has had a similar experience. She says that all of her clients have noticed a definite shortfall over the last year, but that it was more a matter of degree. "If your customers still need what you have, but are only willing to pay for it at a lower price point, then it's important to factor that into your marketing plans going forward. Two-for-one, 50%-off, 3-months-extra have become standard in the perceived-value arsenal. If what you're selling is luxury, though, you've got a tougher row to hoe."