ANALYSIS: IT's New-Millennium Role

By Bob Diefenbacher

Marketing decisions belong with creative strategists, and rejection-tolerant persuaders handle sales activities. Both functions are people-to-people activities and so far the IT function offers little more than administrative help with them.

But with the dawning of the new millennium all that must change. The growing acceptance of the Internet as a realistic vehicle for commerce -- and particularly its potential for one-to-one marketing -- means IT needs to step up to its role in this new marketing and sales environment.

Traditionally marketing's job is to discover the ongoing needs of the prospect and then achieve strategic revenue goals by influencing the design and development of appropriate products and services. Sales has an opposite philosophy: convince the prospect to buy the currently available products to meet the company's immediate revenue goals.

E-commerce will change all of that even more than direct marketing has already. Direct marketers are highly skilled at developing databases through which prospects are analyzed, segmented, and then approached with carefully targeted product catalogs and direct mail pieces. The information in the database tracks the frequency and volume of each customer's activity, as well as the details of each purchase. Direct marketers often earn additional income by selling-off this information to others. IT plays an important role in all of this. But the traditional direct marketing approach is not as prospect-specific as Internet e-commerce will allow.

The ability of a Web site to create customized pages "on-the-fly" is dramatically changing the IT role by making true one-to-one marketing possible. Behind every effective on-line sales operation is a complex structure of databases and Web page generators. As someone repeatedly transacts business with such a Web site, the host builds a valuable cache of information about the individual and his needs and preferences.

Upon entering the site the customer is always greeted with pinpoint relevancy. A page speaking precisely to this individual is created in real-time, making the age of one-to-one marketing a reality. The prospect is asked to buy products that are custom-selected or even custom-created just for him. This alters marketing from a strategic to a tactical activity and greatly diminishes the effectiveness of a one way, product-pushing sales approach. In fact, sites that fail to build true one-to-one marketing relationships will be at a significant competitive disadvantage.

IT's new-millennium role is to become an equal partner with marketing and sales in managing the database which is created as the by-product of e-commerce. IT managers must become effective "devil's advocates," challenging the reasons why specific information is, or is not captured. With their natural "what-if" personality, IT professionals have the ability to make the database design correct, and must do so. The kind and amount of data stored, it's proper maintenance, and provisions for the maladies that may damage it must be analyzed and provided for.

IT people are the best source of guidance in developing secure information storage. There is no more appropriate time for heavy-duty "what-if" questions than in designing a one-to-one e-commerce database. Without a solid way to ensure a sound data store, and a customer-friendly way to fix problems, any budding one-to-one relationship will quickly wither.

Managing this valuable asset and controlling its use is the most important part of the IT manager's job. While there has been a long-standing practice of selling the data collected in direct marketing, customers often disclose much more personal information in the process of conducting e-commerce. And they trust it will be used only for the purposes clearly disclosed by the site.

However, executives whose desire for increased profits exceeds the competitive advantage they perceive in keeping such data secret, will want to sell it off just like direct marketers often do. IT professionals must ensure that the Web site promulgates a realistic privacy policy right up front, and that it is absolutely adhered to ... no matter how tempting it may be to cash in on its value to others.

This issue of privacy is worth going to the mat for. Do not allow hypocrisy to take hold. Collect the data and protect the information. If your policy says the data is not shared, adhere to it. Allowing anyone to weasel word around the policy so as to gain extra income by misusing the information is wrong. IT must be the guardian of the privacy policy. Failure to do so will invite the US government into the matter and soon the Feds will be nosing around your database. And who wants that?

The new millennium brings a new role for IT. As they say in the theater, "Break a leg."

After 18 years in marketing and sales at IBM, Bob Diefenbacher founded Denbrook Systems Associates, an IT consulting firm based in Malvern, Pa. denbrook@aol.com.