B2B Database Marketing

We came across this article from BtoB Online that mirrors our opinions on the value of database marketing: No better time to try data mining

It focuses on B2B and makes the case for why mining customer data is so important, and how it adds value to your business.

It also provides three straightforward tips to help B2B marketers embrace database marketing and effectively use their customer data:

"1) Set clear marketing objectives. Data mining techniques are useless if you don’t know what you want to achieve. You don’t want to do data mining for its own sake. You want to make sure that you produce knowledge that is actionable. You need to be focused in your data mining so that you are producing results that can be implemented into tactical initiatives that help you achieve your marketing objectives. It’s all in the planning. It’s about putting together a roadmap of analysis that is needed to help drive and meet marketing objectives.

2) Conduct a data audit. How current and reliable are your customer data? To find this, assess the information based on its origins. Did the information come from the customer directly, during the point of sale or from a third-party source? Look to your marketing objectives to determine what information is required.

Make sure you are able to track all transactional history back to the customer mapping. A common issue is the use of different versions of a company name in your database.

3) Clean up your data. Data hygiene involves looking for potential errors, undefined fields or duplication. The follow through from the data audit is to make sure you capture all the information you can on a customer and making sure you can match those transactions."

Since so many B2B companies are organized around a traditional sales model (i.e.: outside or inside sales reps are responsible for sales and much of the customer marketing), these database marketing tips are especially important.

There's really no reason NOT to learn more about your customers, consumer or business. And, in this economy, it's imperative that firms do more with less. Maximizing the value within your own database will reap rewards. Two immediate benefits that come to mind.

1. If you understand who your best, most profitable customers are, you can find more just like them. It just so happens that RRW has just introduced an entry-level customer profiling solution (under our Analyze Your Customers division). For a very low fee, we'll profile your business or consumer customers and show you how they are different from the universe at large. With this insight, you can then go after prospects that look just like good customers. Pretty nifty!
2. If you understand the products that an individual customer is most likely to need, you'll be able to intelligently offer them the next best product. This type of intelligence will boost your cross-sell and up-sell programs immensely. Plus, it should help with customer retention, since the more products a customer has with you, the less likely they are to defect. See this article that reviews our analytical approach in understanding the next best product to offer.

These are just two examples of how database marketing can positively impact your marketing strategy and your bottom line.

The Direction of Marketing: Some Ideas to Ponder for the New Year

Maybe it's the holidays . . . maybe it's the specific projects that we're engaged in right now . . . but I'm sensing a real change in the direct marketing landscape. Don't get me wrong, as we discussed yesterday, we're still struggling with finding the ultimate solutions for many of the same problems of the past 10 years, too. However, I sense a change in the proverbial marketing weather.

And, apparently I'm not alone in this thinking. As a matter of fact, in a recent post from James Cherkoff, Director at Collaborative Marketing in the UK, he outlines what he sees as this changing landscape. Here are Cherkoff’s thoughts: “Lots of the ideas that seemed radical a few years ago are now accepted as the norm. And many disruptive trends are now presumed to be long-term change. For instance, the idea that television must be reinvented or die is hardly worth the breath and, hey, did you know people don't like interruptive marketing? Search (aka The Database of Intentions) is now more than just a handy function but the way we organise our lives. Also, now that everyone is joined up outside of traditional institutions, it's clear that people regard peers as the purest form of accurate information.” We've definitely seen this to be the case -- particularly this year with the huge expansion and adoption of social media.

It’s not all about online-marketing though. Traditional direct marketing ideas are also being challenged. Our clients are consistently trying to improve their DM campaigns through the use of analytics and more precise targeting. While the use of intelligent analytical methods has been in place for many years now, direct marketers are getting smarter about how to apply analytics to the “right” data source to most effectively reach the most responsive audiences.

Meanwhile, database marketers are requiring more flexible database solutions to house their customer and prospect data. They are also requiring more intelligent analytical tools to better mine the data within their databases. Database solutions providers are struggling to change their paradigm of how to keep up with these needs. We've found that in working with a lot of the database marketing giants, it is difficult -- if not darn near impossible -- to come up with a streamlined database solution that our clients can quickly implement and not spend a fortune on. Interestingly enough, even those companies who have the capabilities to provide the data, the database and the analytical tools can't see clear to providing integrated solutions without breaking the client's budget. So, we're always on the lookout for a nimble and flexible provider in this industry that can meet our client needs -- and exceed our expectations. And this requirement is not going away . . . it is what the customer will continue to demand.

Finally, the idea that there is some sort of "norm" out there for a marketing strategy is just dead wrong. The only consistent factor that we've seen is that the landscape is constantly shifting. Our clients are consistently changing direction and areas of focus with the changing economy. And, this seems to be the case across industries. As we consult with our clients, it has become an exercise of starting from a blank page and crafting an idea of the strategy to go forward with -- but never carving anything in stone.

I guess the over-riding theme here is that as direct marketers, we need to possess the ability to be Gumby-like. We have to be flexible and fast. We need to be able to sense the change in the weather, and then respond to it with lightning-like speed. More than ever, being tuned in to your client's needs -- and really listening -- are the qualities that will create marketing success for us in 2008.

Becoming the Master of Your Customer Data

In a recent article from Business Intelligence Network, Richard Skriletz discusses the importance of "Mastering Master Data -- How to Succeed with Master Data." Skriletz talks about how really understanding and integrating your customer data is key to building more profitable customer relationships -- and how solving this business problem with help your business reap huge rewards from a profitability perspective.

It goes without saying that in order to effectively compete in todays competitive marketplace, you must truly understand your customer relationships. Skriletz (and many others) have referred to this piece of mastering your data as being customer centric. It is important to understand the transactions that your customers perform with you, however, it is even more important to understand the customer relationship as a whole. Skriletz states it well: "This is the first challenge to becoming customer-centric: recognizing that a series of fragmented customer interactions delivered by separate customer service, account, product or billing business units does not ensure customer satisfaction. Businesses where customers churn are beginning to tackle this challenge in order to keep their high-value customers."

In our work with the telecommunications industry, we've experienced this first-hand. In the late '90s and early '00s, many of the large telecommunications firms were losing as many customers as they brought on to their network. It's really quite astounding to think about this. Those firms that embraced the concept of mastering their customer data and effectively looking at the entire customer relationship, were able to stem the tide of churners and create more loyal -- and long-term customers. Those who didn't -- well, let's just say there are fewer telecom companies out there today, and this is a contributing reason for their ultimate demise.

We've written a white paper (titled Data Management Solutions) on effective customer data integration techniques. We are passionate about this topic because we've seen our customers benefit greatly from utilizing this tool to make their direct and database marketing efforts more successful than ever. Let's all become masters of our customer data environments! We promise it'll make you a hero!

Another great database marketing example!

Yesterday's "DM News" included a case study about how one marketer, Road Runner Sports (a multi-channel retailer of shoes and gear for people who run), made effective use of database technology to build and grow customer relationships.

The article, called Using database marketing to build customer experience discusses Road Runner Sport's "desire to apply sophisticated marketing techniques to drive customer loyalty."

Road Runner understood the importance of segmentation and analytics. When applied correctly, these database tools can definitely be maximized to improve the customer experience, hence build customer loyalty AND grow profits.

More from the article: "In order to best meet the retail needs of its entire customer base, Road Runner Sports realized its marketing would need to move beyond basic demographics. It needed a database marketing strategy that would allow the retailer to integrate and segment its customers across all touch points in order to understand and communicate with its customers as the individuals they are.

“The key to growing our business is to create a compelling shopping experience with every customer interaction,” said Peter Taylor, general manager for Road Runner Sports. “To do this with the highest degree of effectiveness, we quickly realized that we needed a database marketing solution that would integrate our customer data across our entire enterprise to provide the foundation of analyzing customer information.”

What I found refreshing about the success story of Road Runner Sports is that Road Runner is NOT the huge corporation with tons of extra marketing dollars to play with. This is a niche, specialty retailer who understands that they need the edge to compete with their much larger competitors. They're using database technology and analytical techniques to keep their customers satisfied.

What a great example to all of us!