Direct marketers should be dancing in the streets. Why? Because the opportunities for their skills suddenly look limitless. I’m not talking about creative copy writing, graphic design or understanding of printing production, valuable though these are. I mean understanding marketing analytics – how to segment a market based on demographics or behavior, how to test the effectiveness of campaigns, how to maximize the return on marketing investments and how to use modeling, simulation and analysis.

The (previously low-status) statisticians from the direct marketing department are being brought up, blinking, into the light of the boardroom to explain ANOVA, significance testing and Bayesian estimators to worried senior executives. These executives are worried because over-communicated consumers are becoming resistant to the usual marketing communications, and because there is a new spirit in the boardroom called accountability.

Accountability means justifying marketing budgets and marketing methods as never before. Forget market share – does the IRR exceed our weighted average cost of capital? Never mind brand awareness – what’s the customer’s lifetime value in current dollars? Corporations have been eliminating inefficiencies from their supply chain for years; now they’re looking at the marketing value chain with a critical eye. Marketers, forced to justify themselves anew, have only one weapon with which to stave off a skeptical CFO at budget review time: meaningful data that they can relate directly to shareholder value.

The good news: Most companies are swimming in data, and the farsighted ones are actively managing it and seeking more – through loyalty programs, satisfaction surveys, product registrations, list purchases, couponing, Web metrics and myriad techniques to build and maintain customer relationships. The second piece of good news: The infrastructure to acquire and manage all the data is getting cheaper and more accessible by the month. Data warehouses with terabytes of storage are no longer multimillion-dollar investments, and software for modeling, analysis and data visualization is getting more affordable and easy to use. The missing piece? People who understand marketing, statistical analysis and the technology needed to bring them together. Direct marketers understand the first two, but to get on top of the technology piece, they will need a friend in the IT department.

This friend will not only be a guru in database management, OLAP cubes and the paraphernalia of ‘business intelligence,’ but also will know how to stir Web metrics and e-mail marketing into the data stew. The combined skill sets will deliver facts instead of opinions to support better management decisions on products, target customers and marketing campaigns. If they can overcome the stereotypes of Marketing being from Venus while IT is from Mars, direct marketers and technologists can make a partnership that could transform the business.

Definitions:

Not been keeping up on your statistical analysis terminology, eh? Well, here are some quick definitions to help you out. ANOVA: Analysis of Variance is a statistical technique that helps identify which factors influence a set of observations; Bayesian estimators: Related to a statistical method for using conditional probabilities, developed by Rev. Thomas Bayes in the 18th century; OLAP : Online Analytical Processing cubes are three-dimensional representations of fields in a relational database that allow analysts to see different views and to “drill down” into the data.