This bias towards direct mail reflects the origins of most marketing databases – 68 per cent built their database from customer accounts information. Enquiry data was used by 46 per cent of companies, while direct mail and Internet responses each contributed to the database in 27 per cent of companies.

Retention marketing has taken over from prospecting as the main purpose of marketing databases – 59 per cent of companies mentioned retention compared to 52 per cent naming prospecting.

This reflects the growing role of customer management as a key business strategy. More than six out of ten companies (62 per cent) have a CRM strategy in place. Its importance to the company was given a mean score of 7.92 out of ten.

Jo Howard-Brown, managing director of DMIS, said: “As marketing databases mature, so they are being used for the more long-term goal of maintaining customer relationships. Direct mail is an ideal vehicle for this kind of relationship management.”

In fact, prospecting may increasingly rely on the use of third party data. Only 39 per cent of companies hold prospect details on their marketing database. External lists are rented by 46 per cent of companies, with three quarters of these using the rented data for prospecting. Mean expenditure on lists is £21,129.

Jo Howard-Brown added: “The reliance on external lists is good news for the direct marketing industry and third-party prospecting data is more widely available than ever before. But companies should also be aware that prospecting is the starting point of their customer management, not a stand-alone programme. Using marketing databases to win customers as well as to retain them will be the mark of the most successful practitioners.”

For further information contact: Jo Howard-Brown, Managing Director, DMIS Tel: 020 7494 0483, Fax: 020 7494 0455, E-mail: jo@dmis.co.uk, Web site: www.dmis.co.uk

Note to Editors

Direct Mail Information Service commissioned research to identify the existence and nature of data strategies, the role and management of databases, responsibilities and budgets deployed, as well as the purposes for which data is used and whether external lists are rented.

This involved 100 quantitative telephone interviews carried out between October and November 2001. A sample of companies was chosen to represent a broad spread of industry sectors. Companies surveyed had an average turnover of £360 million with 82 per cent employing more than 500 staff.

All the companies had advertising budgets of over £500,000 with the average spend being £11 million. Interviews were conducted with personnel directly responsible for the database and data strategy.