• by Zain Raj , March 10, 2010

With the drastic changes we've experienced over the past year-plus and the uncertainty surrounding our economy, there have been people who claim that databases containing pre-recession data are useless. They suggest that databases built over time offer no value to the company and should simply be discarded.

According to them, the economy has changed things so dramatically, that any information gathered prior to this shift is no longer relevant. They believe that consumers will never be the same, so therefore it is useless to study past behavior.

To put things into perspective, I'd like to offer two analogies. Dumping current databases is like saying your retirement fund, albeit smaller than before, is worth literally nothing due to the economic shift. Or claiming that the education you worked so hard to obtain is useless because you are having a difficult time finding a job post-graduation. These things should not be discarded merely because things have changed. They are still valuable. They're simply different. They just need to be thought about in a new way. When you think about it that way, it is clear that abandoning previous data is an unnecessarily extreme practice. Not only will you lose the rich history and wealth of consumer data gathered over the years, but you will also miss out on an invaluable learning experience.

I'd argue that databases that have been built and nurtured over time are more valuable in today's environment than ever before. When it comes to learning about your customers, data on past behavior plus data on current behavior leads to knowledge. Looking at the change in the two can give you great insight into the shopping patterns and attitudes of your customers. You cannot understand the new data without looking at the past.

In an environment as volatile as ours, we can learn a great deal about our customers. Studying their shift in behavior can help you understand how your best customers are changing. If Customer A was buying from you three times a month and is now buying three times a year, it is clear that they have greatly decreased their consumption. Similarly, if Customer B was buying from you once a month and is now buying twice a week, you know that they are now a great customer. But studying their changes along the way may help you learn why they are behaving this way. More importantly, these learnings can help you predict what will happen in the future.

Data gathered during a period of change can help you decipher what attritors look like, in addition to new prospects. You can see where you are making money and where you are not making as much as you used to. It also allows you to learn what kind of products and services will be most profitable for you in the future.

The people who argue that old and current databases should be discarded are clearly one of two things. They are either vendors who make money off of designing new databases or they're simply myopic marketers. For the rest of us, it is clear that utilizing data gathered before and during this tumultuous time in our customers' lives is the smart thing to do.