BtoB Senior Reporter Carol Krol last month spoke by phone with four marketers—Brett Butler, director, marketing operations at Lexmark International, a printing and imaging manufacturer; Jon Carnero VP-director, interactive marketing, brand marketing and communications at CIT, a financial services company; Kristin Micalizio, VP-direct sales at Office Depot; and Doug Ziewacz, marketing director at Everon Technology Services, an IT services firm for small and midsize businesses—in a "virtual roundtable" that touched on topics such as the challenges of integrating data from multiple channels and the need for more user-friendly analytics.
BtoB: What are the big trends in database marketing right now?
Kristin Micalizio: One of the trends that we are seeing—and it's not brand new but I think it's just gaining momentum—is faster and more online-driven analytics. We are seeing that people are using [these] tools with much more frequency to rapidly provide insight about how different customer segments and demographics think. You can either put that into your direct marketing materials or change something that you are doing on the Web. We are seeing also that even for the smaller-size businesses, not just large companies like Office Depot, this is becoming affordable and available.
Doug Ziewacz: We have more real-time access to data around customer behavior. For a business like ours, with access to cost-effective Web-based database solutions like CRM, you can set up a lot more automation. You get real-time measurement on customer activity, and then you can trigger activities and actions according to their behavior. Then you can go in and monitor that. Despite having very limited marketing resources, we can do so much more in terms of channeling those potential prospects and targets.
Brett Butler: The two big trends that I see are around what is called master data management and customer data integration. That is, trying to get a complete view of customers—especially large account customers—starting from any marketing activities that we might do as a manufacturer to drive demand. For Lexmark and most manufacturers, we might generate demand directly, but we fulfill it through channel partners like Office Depot. We have our own internal sales and marketing systems for seeing how we have tried to generate demand. But then, we have to get sales reporting from a variety—I mean, dozens potentially—of different channel partners, and we have to try to link our name of the large account to their name of the large account, so that we can see whether what we were trying to do to support them had any effect.
Micalizio: That is so true. Especially in a multichannel environment, getting this holistic view of the customer and really understanding what is causing them at certain times to shop in a retail channel versus direct sales [for example]. Maybe somebody only likes to buy their paper in the retail channel and likes to buy furniture and office supplies in the other. That becomes a database targeting opportunity if you can figure out a way to gather all of that data to turn around and use it effectively.
Jon Carnero: For us, it's all about ROI, and so we have made a significant investment in changing our metrics tool. Now we have a new [Web analytics] vendor and we are able to better track campaigns and immediately tell the efficacy of a campaign. We are also able to really dial up and dial down different campaigns—banner ad campaigns, for instance—that are doing well or doing poorly.
BtoB: What are your biggest challenges?
Butler: You know there is this old saying about child abuse: It's not that the amount of child abuse is going up; it's that it is being reported more often. I kind of feel the same way about data abuse or customer abuse. We are getting the feeling that, without knowing it, we might have been marketing poorly or inefficiently to our customers for a long time now. But as these tools are coming online, we are getting insight into what we never had before. In addition, with integrating data from multiple channels, the problem gets a lot bigger as soon as you talk international. If we're dealing with United Bank of Switzerland or Boeing or somebody like that, they expect us to have an understanding of what we sold to them, anything that's breaking, what we are doing to fix things that break. They expect us to have that around the world.
Micalizio: In addition to the multichannel holistic view, I think the other big thing that customers desire and expect is personalization. Making sure that our database has the right fields to store the different kind of information that you could use to do this is a key piece. If you want to do a birthday mailing, then you need to make sure that your data warehouse has a very accurate way to store your customer's birth date. All of the different firmographic kind of things that are out there that, in the past, maybe weren't as critical to have in your data warehouse now are becoming key. It can be everything from mobile phone numbers to the title of the person.
Ziewacz: We're a small business, and with all the tools that are available to us, we do have greater access to a bigger audience. But it also means that with the technology, they are being bombarded by messaging. It is important to be as focused and personalized or vertically specific as possible. We're trying to infer from our data both the psychographics and demographics of our audience and tailor the message accordingly. I think that's always going to be a challenge.
BtoB: How are you all handling the migration online, and how many channels are you collecting data from?
Butler: The word "channel" is used in two different ways. Normally it's used to represent media channel: Web, TV, direct mail. If you just talked about media channels, at Lexmark we've probably got five or six. We have Web, we have direct marketing. We have our own sales force, we have programs through our channel partners, we have trade shows, and events and stuff like that. We have done a pretty good job of getting those down to just two or three databases, and now we are trying to get to one database. But then from a manufacturer's perspective there is also the concept of fulfillment channels. And you have as many channels there as people you can buy from.
Micalizio: We have our online Web channel. We also have field salespeople, we have retail and then we have our direct sales customers, who are ultimately placing their order, either though our call center or on the Web. We try to basically keep all of our information in one database across the board. I would say the one area where it's not as clean in one database yet, and what we are moving toward, would be e-mail. Our e-mail, depending on the source of where we get our e-mail address from, might be in multiple databases today. We are working with our IT organization in bringing all of those separate databases into one.
BtoB: Is there anything that you are doing in terms of search and collecting data from that channel?
Micalizio: We do a lot with search. Most of it we store outside of our own data warehouse. We use a variety of other companies with that so that we can look exactly at what are obviously the most popular search terms, what are our conversions rates on the different search terms. All of those things help us figure out how we are going to change our paid search or where we'll focus from a natural search optimization perspective. The whole online space is utterly exciting. Late last year we put our virtual catalogs on our Web site. Now, not only can a customer get a catalog in the mail but the same catalog is accessible to anybody who visits our Web site. We are able to see which customers choose to now shop with this online catalog where you can flip through the pages, scroll over an item, click on that and it takes you directly to the page on the Web site where you can place the order. Then we are able to market back to that customer who obviously likes the online catalog experience.
BtoB: What are some of your biggest opportunities in the database marketing space?
Carnero: We are in the process of undergoing a user-research study touching on current clients as well as prospects. We are trying to solidify our brand and create more awareness that we are a different kind of company in a very undifferentiated field. It is a challenge and an opportunity. In conjunction with that, we're also using a new metrics tool. With the metrics tool, we will have the quantitative research as to who is hitting the site and what's working and what's not, as well as the qualitative research that we will get from the user research study to really fine-tune the site in order to service the customer's needs. Ultimately, what we want to do is make the site not just the place to contact us and get a phone number but also a place to draw upon for thought capital.
Butler: The No. 1 opportunity for us is linking activities to results. It might sound kind of like, "Well, duh." However, it is a big deal, and our different countries around the world are at different levels of maturity with that. We spend—probably, if you add it all up—15% to 25% of revenue to generate demand with sales and marketing efforts. If we are honest with ourselves, that's not nearly as well understood as, say, product cost, or manufacturing or R&D. It's probably the third biggest item on the income statement. The biggest opportunity we have is to see which of the demand-generation activities that we do yields the biggest result in terms of revenue and profit. We've started to have the processes, and the tools and the culture in place in a few countries to do that, and our big opportunity is to expand it to additional countries and then also to additional customer segments.
BtoB: What's your wish list? What do you want from database vendors that you are not getting?
Butler: There is a lot of energy in the space. It feels like there is more smoke than fire or more fire than heat right now. But it's two things: One is this whole idea of customer data integration so that, from different fulfillment channels and different media channels, I get the view of a customer's interaction that I need to be able to see that same customer. Second is a Web-based analytics tool that a businessperson can use.
BtoB: You don't have that now?
Butler: It's not completely there yet. Until you get better analytics tools, you do not discover that you have a customer data management problem. As soon as you have a customer data management problem, you discover that your analytics tools are not helpful yet because you are double counting customers or you don't have a complete view. I need for any product manager—wherever they are in the world, any sales manager, any marketing campaign manager—to be able to use a Web browser to go to a tool where they can start with a standard canned report that maybe gets presented to them and realize they have got to dig deeper, they've got to ask questions of the data, and that they would have a very user-friendly intuitive way to just drag and drop fields, kind of like an Excel Pivot Table but on the Web. What you find is you can anticipate 10 or 15 standard reports that everybody needs, but there is no way to anticipate what questions they are going to have to ask at the next level. They need to be able to do that themselves and be empowered to do that themselves.
BtoB: How many different vendors do you work with?
Butler: It is somewhere between too many and not enough. We've narrowed it down. We have just a few vendors that we work with, but the space is so new and it's maturing so fast that the vendors all leapfrog each other constantly. And then you also see all the mergers and acquisitions going on between SAP, Oracle and Microsoft and it just adds another level of complexity.
Micalizio: The holistic view of the customer in a multichannel environment is the key because it gets back to really being able to understand the customer's lifetime value, figure out how to market to them and in the different channels that they shop. We have got a lot of data, and you certainly get a lot of insights from that that are very actionable; but there are times when I think many companies are very data-rich and insight poor. So it's how do you get that information into the hands of the users who can turn around and do something with it? Having a huge data warehouse and a lot of modeling and analytics is only part of the equation.
Ziewacz: I think a lot of the tools that we are using now definitely have analytics in mind and measurability, and you can go as deep as you want in accessing your data. But I think what Brett was pointing out was having more of a real-time, user-friendly interface in reporting that provides a lot of visibility and transparency into what you are doing without going back and reconciling all this data. I mean, it's easy to collect, but I think you want to be able to utilize it to draw inferences and help guide your strategy or any execution. I think getting some sort of centralized integration has been the biggest challenge overall.
Carnero: One [of our databases] is purely analytics, the other is sort of like a Walmart, so they do many things for us. Then there's another vendor that is a specialist in SEO and SEM. Those are the primary three that we work with. It would be great if we had something that could kind of seamlessly tie everything together. It's like an orchestra: You have the horn section, the drums … and it's sort of up to you to act as a conductor to get them all to play well together so they actually make music and not just make noise, which requires a lot of time and attention and energy. If I had a way to automate that, so that there can still be a human process—because I think that you do need a human mind to go in there—but some way to really kind of tie it all together, I think that would personally help me a lot and improve my productivity.