December 25, 2006

Jim Fulton: Mr. Krabs Is A Database Marketer

Jim Fulton is Principal of Customer Metrics, Inc. His contribution to the Boxing Day edition of The MineThatData Blog is entitled "Mr. Krabs Is A Database Marketer".

If you have

a) a newer vehicle with a built-in DVD entertainment system, and;

b) children under the age of 8

then you will

c) spend a lot of time listening to – but not watching – Sponge Bob DVDs.

And if – like me – you have worked in database marketing for twenty something years, then you will probably start wondering which, if any, of the Sponge Bob characters could be industry colleagues.

Having pondered this question for more time than I would care to admit, I write to present a case that Mr. Krabs – Sponge Bob’s boss and owner/manager of The Krusty Krab – shares many personality/intellectual traits with people in the database marketing world.

“Nay,” you say? “Where is his end-to-end CRM solution?” you ask? Consider the following, gentle reader:

1) Mr. Krabs is cheap

I have noticed that good database marketers and finance types tend to get along rather well. Obviously, there can be some tension on particular tactical decisions – and a little bit of honest skepticism can be useful for all involved -- but on the whole, good database marketers and good finance people both inhabit a world of real numbers, and their personalities tend to veer to the cheap side of the spectrum. DMers obsess about managing tenths of a cent in per-unit postage expense, will push the e-envelope in managing and limiting search engine optimization and affiliate expenses and will generally obsess about incrementality in a way that baffles many in the organization.

Database marketing tends not to be the part of the organization that sends staff members off on “multiweek journeys” to “develop a more holistic appreciation of the customer experience” and spends many hundreds of man hours clipping out photos from magazines and assembling them in montages on conference room walls to try to gain insight into customer behavior.

2) Mr. Krabs is tone-deaf on the “atmospherics” of the brand

Direct marketers are not without their faults (and cheapness can be something other than a virtue), and in our immersion in the heavy quant details, we do sometimes lose sight of the intangible “atmospherics” of the brand. (And I suppose some of those magazine photo montages can provide some insight on this point).

In one episode, “Patty Hype,” ( Mr. Krabs belittles the idea that a customer would come to the Krusty Krab for “atmosphere.” “They come here for food!” he declares with a certain crustacean curmudgeonliness.

Let’s face it, Howard Schultz’s genius was using Starbucks’ “atmospherics” to successfully charge people $4 for caffeinated water. (And I for one think that’s generally a fair exchange). Victoria’s Secret’s genius was to elevate lingerie purchasing from the schlocky to the sensual. A Motorola RAZR’s atmospherics…well, you get the idea. Suffice it to say that a successful direct business needs database marketers, but not just database marketers.

3) Mr. Krabs does not fully grasp the economics of cannibalization

In “Sponge Bob: The Movie,” Mr. Krabs opens the second Krusty Krab right next door to the first one. When asked why by Bikini Bottom news reporter Perch Perkins, he replies “Money!”

The idea of putting more investment in the areas that you’re making the most money is well-intentioned and superficially somewhat plausible, but unless one speaks the language of incrementality, it is ridiculously easy to over-invest in segments that do not provide adequate incremental return.

The idea of the Krusty Krab II next door to Krusty Krab I is funny because even an eight year old can recognize that it’s silly. Is it really THAT different, however, from a decision to do an expensive catalog remail to an audience that just got the original catalog six days before?

4) Business = customer base.

Perhaps the greatest evidence that, down deep, Mr. Krabs is a direct marketer is the fact that in episode after episode, Mr. Krabs repeatedly – almost obsessively – notes the criticality of “all me paying customers!” At a strategic level, database marketing establishes strategic equivalence between the business and its customer/prospect base. And Mr. Krabs understands this from claw to tail.

Are ya ready, kids?

1 comment:

  1. Anonymous2:43 PM

    Great article, Jim. Do you have a website?

    Can you explain more about why it is bad to have two stores right next to each other? Doesn't Starbucks execute that strategy to near-perfection?


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