The False economy of doing it yourself…

Long has it been thought that an internal hire, or team, is always best suited to handle the ongoing data needs of a business.  It’s often seen as a reason to create a position that could then serve multiple uses within the business.  No doubt, there are certain situations when having a “Jack” of all trades in place can fulfil a need in the business.  But, is this the most effective use of those monetary resources?  On average, you’d generally spend $45,000 + on costs, to hire and keep a good basic Data Administrator.  For this money, it would be reasonable to expect that the person would be able to provide rudimentary assistance to the Marketing arm, and provide a resource for smaller ad-hoc projects/left of field requirements.  If with this spend, you achieve that…then I would suggest you’re doing very well!

So let’s look at the flip side of that equation, and see what that spend would yield in real world terms for an out sourced Data Management(DM) solution.  For starters, you’d spend a few dollars up front to get all your ducks in a row.  This would entail data normalisation, cleaning, validation, hosting etc.  From here, you would then have an asset that is ready to send to market.  If you knew what your target market was, and it was a case of just providing some selection criteria/profiling, then it would be reasonable to expect that 1-2 hours of DM be required each time you market.  If you’re marketing each week, then the cost could be as little as a few hundred dollars.  If you were only marketing monthly, or even less frequently than that, then it would be reasonable to assume that the costs would be comparable relative to your frequency.  You’re likely to have fork out for some storage costs, but with the cost/MB of storage dropping like a stone, then it becomes negligible in the big picture.

So let’s assume that you market weekly;

2 hrs/wk = $330

$330 x 52 weeks = $17,160

If you only marketed to your prospects/customers monthly;

2hrs/mth = $330

$330 x 12 = $3,960

Furthermore, let’s assume that you allocated $10,000 to setup/validation/cleansing.  You then market weekly, and a quarterly update/validation/clean of the data costs $3000 (as the code should already be done), you’ll spend;

Initial setup = $10,000

Weekly Charges = $17,160

3 x Quarterly Charges = $9,000

Total = $36,160

Saving = $8,840pa

This saving could then be used in the business to fund alternative promotions, or just looked upon as $8,840 that you don’t need to make!

Let’s be clear here, this saving is not just monetary.  As you’ve also ensured that your data remains clean and accurate for the entire 12 months.  You’ve leveraged the might of an organisation that does this day in day out, and you haven’t had to stress about “Jack” doing as he’s told!

So why aren’t you doing it?  Are you that much of a control freak that you can’t let go?  Do you have trust issues?  Well you should ensure that you have some control, you must be able to trust that what your DM solution is doing is correct.  These aspects are vitally important to your business!  The best way to achieve this though, is to ensure you have open dialogue at all times, and that the communication is a two way street.  Just remember, your DM solution can’t help you, if they don’t know what your challenges are!