What are the limitations in the gathering of individual-level consumer information for direct marketing purposes?
The post-modern market is characterised by consumer individuality and eclecticism.
Consumers are becoming time poor, better educated, sceptical of advertising, less brand
loyal, have more product and service choice and expect personalised levels of service.
Essentially, the fragmenting post-modern market has led to a breakdown in the
behavioural consistencies previously associated with age, income and occupation,
forcing companies to increasingly respond to customer needs on an individualised basis.
At the same time, the conditions created by the advent of post-modernism have become
a source of competitive advantage for the direct marketing industry given its unique
ability to communicate and interact with consumers on a personalised level. Unrivalled
levels of product and service customisation, improvements in customer satisfaction,
increased customer retention rates, extended lifetime values, the development of
customer relationship programmes and the identification of up-selling and cross-selling
opportunities are being made possible.
This represents a paradigm shift away from mass marketing methods towards a more
consumer focused approach, with the result that it has now become both possible and
profitable to customise products and services according to the needs of individual
customers. A review of the literature, however, reveals that the limitations associated
with the gathering of individual-level consumer information, upon which personalised
marketing programmes rely, have received little attention.
Using 256 personal interviews and a nationally representative, proportionally stratified
sample frame combining quantitative and qualitative research methods, this study
identifies, quantifies and provides an understanding of these limitations within one allencompassing
A number of case studies and hypothetical models are provided that demonstrate that the
limitations associated with the gathering of individual-level consumer information have
significant and widespread implications for the efficiency of the direct marketing effort
and company profitability.
A consumer-centric understanding of the concept of data protection is provided, and the
level of data protection concerns and prevalence across different consumer groups is
quantified. An enhanced insight into the manifestation of data protection concerns with
respect to consumer propensity to disclose, omit and falsify personal information is
An understanding of the interrelationships and underlying reasons for consumer
abstention from the voluntary disclosure of personal information for direct marketing
purposes, and omission and falsification of such disclosures is presented. This is
supported by quantification of the availability, completeness and reliability of
individual-level consumer information and the hypothetical implications for direct
Contributors of personal information for direct marketing purposes are shown to be
significantly different from abstainers, indicating that individual-level consumer
information is biased and prompting a re-appraisal of current customer profiling and
data appending practices.
Values variance across and within demographically defined groups is demonstrated,
confirming the inadequacy of extant direct marketing data gathering techniques and
calling for the inclusion of a wider range of consumer classification schemes.
The contention of this study is that the combined availability, completeness, reliability
and usefulness of individual-level consumer information is significantly limited, thereby
constraining the evolution of relationship marketing programmes, interactive
communications, pennission marketing and other forms of personalised marketing
strategies that exploit the phenomena of post-modern market fragmentation. The new
insights imparted offer a better understanding of the manifestation of data protection
concerns and implications for the gathering of individual-level consumer information,
suggest a number of solutions for improving companies' ability to gather such
information coupled with several testable predictions, and provide a revised model
contributing to the development of direct marketing theory.