BtoB:It hasn't been a good year so far for data providers because of high-profile security breaches. How will these incidents affect b-to-b marketers in the short term and long term?
Leonard: In the short term, it's going to focus a lot of attention on marketers and any possible vulnerability they might have. Marketers will need to consider what fields they actually require when they capture data and be able to make a reasonable case, when questioned, for the business need for the data. Long term, I think businesses will be re-evaluating their data acquisition requirements. Certainly, it seems incumbent on marketers to be more open about what they intend to do with information they collect and the choices they offer individuals about the use of their information.
Howe: In the short term, we would expect additional regulation that will affect not just marketers but all companies that manage customer data. Over the long term, we expect there will be a heightened awareness in the minds of marketing professionals as to the impact security breaches can have on their brands. This will result in a stronger alignment between IT and marketing.
Hopkins: Data security and consumer and business privacy are two of the most critical concerns of marketing today. As both an industry and individual organizations that rely on data to deliver service to prospects and customers, we must all ensure that proper procedures are in place to protect the information we use. Data are our most valuable asset and must be treated as such.
Butkus: Marketers will react both internally and externally. Internally, they will review security practices and privacy policies regarding how they are acquiring, retaining and using their customer's data. Externally, they will demand more of their content providers. They will exercise more caution in selecting list providers.
BtoB: What are database companies doing to respond to the security and privacy issues?
Howe: While there may be a temptation to enter a "batten down the hatches" mode, companies should take a long-term approach. Some, like Acxiom, have the opportunity to turn security and privacy knowledge into consulting services to help companies navigate through the current storm and the evolving regulations while protecting the privacy of the consumer.
Leonard: Each database company that we are aware of is reviewing its existing practices and controls to ensure that they are meeting their current needs. Each company is addressing its unique requirements, and we certainly can't talk about what individual firms are doing to safeguard their environments. At a minimum, we believe companies are evaluating the security of their data transfer processes, their access controls and the basic security processes of their organizations.
Butkus: Responsible database companies are reviewing procedures and tightening operating practices both from a technology and human standpoint. Greater vigilance is being practiced at all levels and at every point of data compilation, storage and access.
BtoB: How do data security issues specifically affect b-to-b marketers?
Hopkins: Data security is critical to all marketers, b-to-c and b-to-b. In the past, consumer marketers have encountered more scrutiny and regulation around privacy and security. However, b-to-b marketers must learn from our consumer counterparts how to proactively implement procedures to protect our most valuable asset-our customer and prospect data. Today, many b-to-b marketers have already implemented procedures that mirror those of their b-to-c counterparts.
Butkus: Protection of customer data cuts across both b-to-b and b-to-c. This is especially true of b-to-b companies that receive payment by credit card or that are involved in credit transactions. It is also true of credit information and protection of customer information.
Leonard: Like any marketer, b-to-b firms use information about business contacts. And b-to-b marketers are every bit as concerned as consumer marketers about security. From one perspective, the challenge of managing a relationship with a customer organization that may have hundreds or thousands of buyers requires a heightened awareness of information security practices.
Howe: Anywhere customer information exists, there is the potential for misuse. At the end of the day, while businesses may market to other businesses, they ultimately sell to individuals. In this regard, they would have the same concern as b-to-c marketers as it relates to protecting that information.
BtoB: What are the biggest trends in b-to-b database marketing today?
Leonard: The largest trend is the shift toward use of the Web, e-mail and other electronic media. I think the next big trend will be toward automated marketing processes ... taking CRM and identifying repeatable (replenishment) type situations and executing them in support of the client's business. Business is looking at location-based technologies for operational management (tracking truck locations, for instance), but I wonder if b-to-b marketers won't find opportunities to use those technologies for marketing applications in the future.
Butkus: One [trend] is higher expectations on response times as cycle times compress at every stage of the marketing communication process. And two, channel integration is no longer a nice-to-have; it is essential.
Hopkins: Most important is the focus on small businesses. Small businesses make up 90% of all businesses today and represent a unique and lucrative market segment. The small-business market shows a convergence of the profile of the business and the small-business owner. The ability to take a holistic view of the small-business owner's consumer profile and the business' company profile allows the marketer to create the most accurate picture of its potential customer. This integrated profile enables more accurate prospect marketing segmentation and customer service strategies. Additionally, the ability to create models that leverage blended business and consumer data more accurately identifies the best prospects for marketing and customer retention.
Howe: There is a rapidly growing desire to better understand the demographic characteristics of buyers in the small-business segment, as well as the ability to identify [small office-home office] buyers. In the high-tech sector, in particular, larger companies are looking for better ways to manage customers and prospects on a global basis.
BtoB: Most marketers still do not have integrated databases. What is the hold-up?
Leonard: Marketers have developed databases by brand, segment or product line because of a focus on individual campaigns and broad segmentation. In b-to-b, we have long had the traditional difference between sales and marketing where sales maintains its own "contact bases" while marketing builds its marketing databases-with both teams distancing themselves from each other out of fear: fear that the "other side" will wreck the relationship or fear that the "other side" will take control to the detriment of "our side." In a direct way, the issue of "e-mail overload" or spam has brought the issue of governance to the forefront. Who owns the customer, who should decide what mail the customer gets, who is in charge? These issues make it difficult to reach consensus about the control aspects of integrated databases and, in combination with the cost of integration and attendant challenges of data reconciliation and process integration, ... makes the idea of integration appear onerous.
Hopkins: Most organizations do not have a single data steward who represents the need for data quality and data integration across the organization. Therefore, the integration of the databases can be a difficult, if not impossible, task. Each area of an organization has different needs and requirements for data quality and the underlying data model. Additionally, these areas often work under different time frames for data access. To move forward on an integrated data strategy, an organization must align data needs across the organization. This can often be addressed through the assignment of an enterprisewide data steward.
Butkus: The process of bringing together disparate sources of data within a multichannel marketing organization requires planning, cooperation, organization and top-down sponsorship. These are not easy challenges for marketers to overcome or to align. Even with this methodology in place, the marketer faces the challenge of implementing each dependent step to realize success. Education and ever-changing technology, along with more self-service capabilities from the marketplace, are enabling marketers to realize the value of integration in due time. Most significantly, the challenges are not technological but organizational and strategic. An integrated database is an enabler-first, the company must decide on an integrated channel strategy. This may involve killing sacred cows of the company's current organization and power structure.
Howe: Most commonly [the lack of integrated databases] is caused by the lack of centralized ownership and historical database implementations that key off products, which may not cross business lines, rather than the customer, who does cross business lines.
BtoB: Marketers continue to struggle with data hygiene and data quality. Why is that?
Howe: It is a multifold problem. As companies grow, they incorporate more and more information into their systems. The format of that information varies from source to source and often from delivery point to delivery point. Data change rapidly, especially in a b-to-b world where many people change roles and companies, so identifying decision-makers is a constant challenge. Ensuring that your information is accurate and timely therefore becomes a technical challenge in identifying, linking and correcting records that often are outside or only partially within the company's immediate control. Finally, too many companies view this as a one-time challenge, but it demands an infrastructure that keeps up with constant change.
Hopkins: Data hygiene and data quality are complex initiatives for b-to-b marketers. The requirement for data quality is driven by a balance between data accuracy, data currency and data access. For instance, a company must determine what its level of tolerance is for inaccurate data and its requirement for up-to-date data and real-time access. Does your organization require data access in real time for Web site order processing, and how important is it at this point of interaction that the data provided be complete and cleansed? Many companies have advanced into near real-time data access but are still using an offline, batch-cleansing process. The more a company relies upon real-time automated "decisioning" and data access, the closer to the point of interaction the data cleansing processes must be implemented. This is still a challenge to be addressed by many organizations.
Butkus: Tools and technology are readily available to marketers today enabling them to repair poor data quality after the point of aggregation. There are so many feeds of information into today's data warehouses and data stores that marketers have lost sight of fighting this battle on the front end. To get ahead of the curve, marketers should focus on the data at the point of entry and enabling the user (internal and external) to utilize tools to ensure higher data-quality standards as they feed the data stream. This can be accomplished through real-time data access tools for inbound call centers, point of sale systems and Web sites. Additionally, marketers can improve their process of recognizing current customers and repeat visitors through these same systems to enhance the customer experience, while maintaining data quality in one effort. Better planning and a more effective use of technology can ease this struggle.
Leonard: Data hygiene and data quality are areas with evolving bodies of knowledge and standards. To some extent, the struggle requires reconciliation of several conflicting political issues and some difficult technical challenges. For instance, addressing data quality in a diverse enterprise requires decisions around ownership. That is, when one is looking at two records of the same business customer, who makes the final decision if there are two conflicting fields in the records? Since, in most cases, these issues surface with marketing databases, both teams can contend that their record came from the customer ... so a determination has to be made about who "wins." What about empowering the customer to keep the record accurate? The challenges of authentication make it difficult to allow the customer to maintain his or her own record, though folks generally agree that the best-quality databases often result from relationships in which customers have the opportunity to correct their own records. Still, that level of openness is an emotional challenge to data custodians.
BtoB: If marketers aren't currently doing database marketing, what do they need to do to get started?
Butkus: Identify the goals, objectives and problems they are trying to solve by implementing a database marketing solution. Locate the people, systems and resources that will be affected, positively and negatively, by implementing such a solution. Then, determine an ROI based on the time and cost of integration, relative to the business advantage from database marketing. And finally, create a plan of action to accomplish this goal on time and according to specification.
Leonard: The first thing marketers have to do is become willing to allow numbers to guide them. An attitude that individuals will tend to differentiate themselves is the first step, and that differentiation will be manifested by their behavior and their demographics. Once a marketer satisfies himself that this understanding will enable him to do a better job of understanding customers, a marketing organization can begin the process of evaluating its existing information infrastructure. This evaluation of existing marketing databases, professional resources and data sources provides the raw material to begin. This may result in a standardized data infrastructure or the creation of an extracted data file to use as a foundation. Once the "customers are differentiated" attitude is there, the infrastructure is understood and a data set is available, the marketer embarks on a path of test ... evaluate ... retest ... rollout ... using direct marketing tools.
Howe: Invest up front in planning. A well-thought-out customer and overall marketing strategy will define how and where to begin with the marketing database efforts.
Hopkins : An organization that is just starting out with a database marketing strategy can benefit by looking at the data foundation upon which the database will be created. First, identify all the core sources of data across the organization-where do the data originate? Then, look at the data flow throughout the organization. How do the sources of the data and the ultimate users of the data align? Finally, what are the requirements for data quality, data currency and data access? This information can then be used to create the data model for the database and provide a solid data foundation.