Background
Database marketing emerged in the 1980s as a new, improved form of direct marketing. During the period traditional "list broking" was under pressure to modernise, because it was offline and tape-based, and because lists tended to hold limited data. At the same time, with new technologies enabling customer responses to be recorded, direct response marketing was in the ascendancy, with the aim of opening up a two-way communication, or dialogue, with customers.
Robert D. "Bob" and Kate Kestnbaum were trailblazing pioneers of the new direct marketing, who were credited with developing new metrics including customer lifetime value, and applying financial modelling and econometrics to marketing strategies. They founded Kestnbaum & Co, a consulting firm in 1967, and this was the training ground for many of database marketing's leading thinkers, including Robert Blattberg, Rick Courtheaux and Robert Shaw. Bob Kestnbaum was inducted into the DMA Hall of Fame in October 2002.
Kestnbaum collaborated with Shaw in the 1980s on several landmark online marketing database developments - for BT (20 million customers), BA (10 million) and Barclays (13 million). Shaw incorporated new features into the Kestnbaum approach, including telephone and field sales channel automation, contact strategy optimisation, campaign management and co-ordination, marketing resource management, marketing accountability and marketing analytics. The designs of these systems have been widely copied subsequently and incorporated into CRM and MRM packages in the 1990s and later.
The earliest recorded definition of Database Marketing was in 1988 in the book of the same name (Shaw and Stone 1988 Database Marketing):
- "Database Marketing is an interactive approach to marketing, which uses the individually addressable marketing media and channels (such as mail, telephone and the sales force): to extend help to a company's target audience; to stimulate their demand; and to stay close to them by recording and keeping an electronic database memory of the customer, prospect and all commercial contacts, to help improve all future contacts and to ensure more realistic of all marketing."
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