Reflections on a life in database marketing: MerlinStone
In 1980, at the age of 32, I left academia for aspell in industry. I joined the European HQ of Rank Xerox, where I worked in businessplanning and competitive intelligence, monitoring and forecasting thedevastating impact of Japanese copier manufacturers on our business. I had beenconsulting to Rank Xerox for a year, working on the relationship betweenservice satisfaction and perceptions of response and repair times, mergingservice records with the perceptions survey results and analysing the fileusing SPSS. A central finding was that the halo effect was alive and well.Unreliable machines made customers think that engineers took longer to arrivethan they actually did!
Another part of my responsibilities was to help Rank Xerox develop a framework formanaging its emerging systems business (word processing, daisy-wheel printing,laser printing and the first true windows product, the Xerox 8000 informationprocessing system, based on the original Star workstation whose windows ideawas adopted by Apple). I was one of the few managers who learned how to use aword processor (I insisted that one should know how to use the products onesold). This attracted many wisecracks from senior managers. “Got a newjob, then, Merlin?”, they asked, when they saw me tapping away. Given theimportance of Xerox’s service contract business (made possible by theunreliability of their machines), I decided to learn more about service. Iworked with an independent consultant, Dr Tony Wild, who was working on Xerox’sproblems and who educated me in the intricacies of spare part management. Thisco-operation resulted later in our book, Field Service Management, the firstbook (we think) compiled on the Xerox 8000 system.
In those days, Rank Xerox’s business planning community used APL to manipulatethe many matrices needed for complex, interlocking plans. Then, along came oneof the first spreadsheet programmes, Visicalc. We bought an Apple IIe and(unbelievably, these days) asked university academics (operations researchersfrom Sussex University, my alma mater), to programme a model for analysing RankXerox’s service business.
In 1983 I was given the opportunity under the Rank Xerox networking scheme to allowmanagers to leave and contract back while working from home. I took it. Thisgave me a free Xerox 820 computer together with its massive 8″ floppy diskdrives and daisy-wheel printer. Meanwhile, I answered a job advertisement for asenior post at Henley Management College and negotiated it down to a part-timepost, giving me a great foundation for a consultancy career. One of my tasks atHenley was to develop a short course for senior marketers, Marketing – the NewRealities, which I did in conjunction with the consultancy MarketingImprovements. It was great training for me too.
My confidence in dealing with senior management was greatly boosted by JimCoulson, a wise consultant from California who ran several senior managementdevelopment programmes for Rank Xerox. He asked me to present on them while Iwas still at Xerox and gave me a contract to work on them after I left thecompany. He also gave me work, including some at Xerox’s laser printer divisionin Los Angeles. I had a lot of luck and some really good friends!
I was by then something of an expert on computer marketing, did many projects forcomputer companies and wrote a book, How to Market Computers and OfficeSystems, with Hamish Macarthur, an experienced IT analyst and consultant. I developeda training programme on the subject which I ran in many countries. With Hamish,I wrote regular articles on IT marketing for the main magazine for recruiting ITmarketing and sales professionals.
As luck would have it, at the same time I was asked to contribute to a trainingprogramme being run for Rank Xerox UK’s marketing department by an experienced trainingconsultant, Kevin Martin, whom I’d met while working on other trainingprojects. A senior member of this department was Mike Wallbridge, who managedthe company’s marketing communications. When in 1984 he moved along with manyothers to British Telecom to help with the newly privatised company’smarketing, he contacted me and asked me to see him.
Mike was very kind, telling me I was the only marketing person in Rank Xerox(whose management was dominated by ex-sales people) who had made sense to him.Could I help him with his massive programme for creating and using BritishTelecom’s first truly national customer database? Ever the optimist, I reasonedthat because I knew about the marketing of computers, and the associated skillsand change management requirements (which I had learned about from Kevin), Icould learn about the use of computers in marketing. So I entered the world ofdatabase marketing. By now, Kevin and I had formed a company, and we needed allthe good people we could get to help British Telecom.
At that time, the main very large users of customer databases were the big directmail marketers, such as The Readers Digest, American Express and mail ordercatalogue operators. Barclaycard had recently burst onto the scene, whileutilities generally used their customer databases for emergency servicemanagement – central heating maintenance contracts were relatively new. In thenext few years, company after company lined up for the services of ourbusiness, mainly to help them implement new marketing approaches using customerdata. The most dramatic success was achieved by Direct Line, who had launchedin 1985.
British Telecom dominated our client base, but British Airways, British Gas andothers completed our portfolio. It was then that I started my Database UsersGroup, so that companies could learn from each other. Its first membersincluded British Telecom,. British Airways, Homebase (one of the first loyalty cardoperators with its Spend and Save scheme) and others.
British Telecom’s Customer Communications Unit had the tough task ofrationalising a myriad, fragmented communications initiatives, to create moreeffect at lower cost. Mike’s project resulted in the company being able towrite to all of its customers with the same (or relevant) messages. Managingthis Unit required real skill, and Adrian Hosford had been recruited from ICLto build a team of some of the best marketers in the UK. He succeeded, and I amstill in contact with many of them, who taught me so much about directmarketing.
One of the critical influences on my early work was my connection with AndersenConsulting (now Accenture). They were the main supplier of database marketingtechnology to British Telecom. I learned much from its senior people, particularNigel Backwith and Bob Shaw (Bob and I wrote one of the first books to explainhow to do all this – Database Marketing). Andersens referred me in to BritishAirways. And it was from Andersens that I recruited Neil Woodock (now Chairmanand CEO of The Customer Framework) into our company.
Customer database technology was then “clunky”, as they put it.Databases were not relational, but in most cases flat files, which madeprocessing them expensive and time consuming. Relational databases hadappeared, but they were expensive and required complex programming. The cultureof data management that we accept as normal these days was absent, and manycorners were cut and errors made. Many marketing managers had no idea what acustomer database was, what it could do, and its benefits, so much of our workinvolved communication, explanation and training.
With the databases came contact centres, but it was – compared with today – acosy world. All you needed were addresses and telephone numbers, as e-mail andmobile telephones were rare. Instead, we had faxes, pagers and other now rarelyused devices, which generally were not top priority – just getting the basicsof name, address and fixed-line telephone number onto databases and learninghow to use them was the focus of most of our clients. For business contactdatabases, life was as yet uncomplicated by the emergence of home working(though I featured in BT campaigns along with my family as one of the firsttrue home workers). The idea was just taking root that small business customerswere more effectively managed using Telephone Account Management (a telephoneand a customer database rather than a cheap sales person). Yes, this was,another book, this time with Chris Wheeler, one of my consulting colleagues.The vital contact histories were another matter. As they resulted fromtelephone calls and direct mail exchanges, they introduced an additional set ofconcerns about data quality.
I decided in 1989 to go back into Academia. This led me to a Deanship of theFaculty of Human Sciences at Kingston University, from which position I wasable to support the privatisation out of the university of what was to becomethe Institute of Direct Marketing, still a global leader in developing theskills that we all need.
Reflections on a life in database marketing: MerlinStone