The Elements of Risk

Taking risks cannot and should not be eliminated in the world of RM. When we take risks for our customers, the fact that we test and retest and test again, almost by definition says there is risk involved, but it also makes improvements on our current state.

In marketing and RM, there is hunch work, which is the risk part. And there is science, which is the reduction-of-risk part. The hallmarks of the direct-marketing strategy are measurability and accountability.

Risk taking is part of doing business. When making decisions on hiring people, a firm hopes a certain percentage will stay. In technology, a business hopes that a high percentage of the technology is optimal. Making decisions on timing and setting expectations for clients is a gamble. One makes decisions on how much risk to take to expand a business - a long-term objective - while still satisfying the short-term objective of trying to optimize earnings per share.

With respect to relationship management, risk can be minimized or managed in part by navigating with someone who has been there before, and knows how to avoid common mistakes, and understands the importance of having defined goals, the right metrics to measure objectives and a solution that is focused. In our particular company, we know that not many companies can say they have three decades of experience building, installing and hosting hundreds of database implementations - and thousands of data-driven primarily marketing solutions. We believe this is more than just a value-add for our clients - it's a means for them to minimize risk in their projects and assignments.

Equally important, in the RM space, is to have internal staff and external partners who are disciplined historically in direct marketing. Direct marketing's emphasis on measurability and accountability go hand in hand with today's database and RM marketing expectations. So where a pure-play software company may appear to be a reliable, stable and attractive partner, it may not understand fully the context, customization and customer demands of a particular client, in a particular industry - and the day-to-day response-driven marketing activity that must enrich the RM solution. Is the supplier going to roll up its sleeves and make it all work?

When a company is not certain if it wishes to in-source or outsource, build versus buy, or simply gain a partner who can help make RM strategies and tactics happen, these aforementioned considerations help to manage risk accordingly.