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To take the pulse of the industry, BtoB Senior Reporter Christopher Hosford contacted experts to solicit their views on database marketing trends and the rapidly evolving forces of change wrought on it by Web analytics, social media, alternate data-sourcing techniques and other emerging factors. Participating in the virtual roundtable were Mark Jeffery, director of technology and senior lecturer, Kellogg School of Management, Northwestern University, and author of “Data-Driven Marketing: The 15 Metrics Everyone in Marketing Should Know” (John Wiley & Sons, 2010); Kevin Kerner, managing director-U.S. at agency Mason Zimbler, a division of Harte-Hanks Inc.; Gary Laben, CEO of KnowledgeBase Marketing, a Wunderman company, who last month was named Direct Marketer of the Year by the Taylor Institute for Direct Marketing at the University of Akron; and Sam Zales, president of database company ZoomInfo.

BtoB: Database marketing seems not to suffer from too few contacts but by an expanding universe of data and marketing automation choices. What can marketers do to make sense of it?
Mark Jeffery: There's just too much data out there, and marketers are overwhelmed by it. And there are too many metrics for marketers to worry about. They need simpler approaches. That may be why most organizations don't manage marketing very well. Roughly 50% don't use any metrics at all, like return on investment or customer lifetime value. And 70% don't use experiments to test if their marketing campaigns are working.

Sam Zales: Part of the problem is that, after the recession, marketers are having to do more with less. Typically the first place a company will cut is marketing, an arena where you can't always prove a direct correlation between dollars and work. But spending to put more prospects into the top of the funnel has to show that it's delivering results. As the marketing function moves toward providing that ROI, it has paved the way for database marketing as a central component.

The good marketers, the ones who are succeeding, recognize how challenging it is to have a clean, quality-driven database, and one that works seamlessly with their CRM systems. It's about tracking every single lead and discarding leads you won't pursue going forward.

BtoB: If there is a disconnect in recognizing this, where is that disconnect coming from?
Jeffery: There is the perception by many marketers that marketing is creative and they don't need data, they don't need to measure. Marketers just don't want to know if it's working or not. At the end of the day, it comes down to creating a culture of measurement and systematically applying segments. And the framework for doing data-driven marketing is to first know what it is you want to do.

The fact is, there is a marketing divide between a small set of organizations that have figured out how to do data-driven marketing and everybody else. Moreover, statistics show that organizations that do data-driven marketing, that have processes in place to manage their marketing professionally, that keep score, that use enterprise data warehousing, [they] get better returns on their assets and better brand and customer equity.

BtoB: Social media seems to have been marketing topic No. 1 over the past year. What has been its impact on database marketing?
Gary Laben: Social media can lead to good list-building, and an area we're very interested in is the ability to segment via social. In the past, you segmented based on traditional characteristics, demographics, etc. Now, you have the ability to segment by someone's context, his community. Say someone visits your website with no existing business relationship. But through social media analysis, you know his connections are quite high, representative of your best customer. That's pretty powerful information.

Kevin Kerner: We're starting to capture things like a person's Twitter or LinkedIn handle, to at least know that someone in the customer database is active in social media. And if you know that, maybe you could mention something in a social conversation and send a relevant e-mail at the same time.

BtoB: Where can marketers begin to improve their database marketing?
Kerner: By understanding that it's not about what prospects say about themselves; it's about what they do. I get pretty excited about this, because marketers in the past have never had the opportunity to mine data at the behavioral level. Here, marketers can score leads by using ... self-reported data as well as behavioral data based on how someone is interacting with you over time. Their scores can go up or down based on what they're doing or not doing.

In this sense, marketers almost have to have a new skill set, to be Web anthropologists, in being able to interpret behavior and to understand how over time Web behavior is going to influence how you communicate with people.

Jeffery: The real power of data-driven marketing is doing targeted analytics, where it's not uncommon to get a full 100% improvement in the rate of prospects who take your offers. Say a person buys your product. Targeted analytics can identify other customers who look like that original buyer, and who, also, bought different products. Now, you can send e-mail or direct mail to the buyer to offer him those other products. This is how to drive phenomenal performance.

BtoB: Explain a bit more about segmenting based on this?
Zales: Everything with database marketing starts with who your target audience is. Marketing qualified leads has to be attached to segments, the ones who buy more efficiently through the sales cycle or who are likely to be the more profitable customers. This comes from combining rich information on contacts, including their backgrounds and where they worked previously, as well as industry information, company revenue, employee size, SIC codes and competitors they sell against. This gives you the ability to hone a message that rings through to a particular audience.

Laben: What we're seeing here is what I call “GCC”: geography, context and community. Geography is self-explanatory. Context could be a particular aisle in a store or it could be a website page. The final piece is community—knowing the conversations that your prospects are having. This is not so much where they live or work, but where they are psychically.

BtoB: What major database marketing trends are you seeing?
Laben: One of the biggest things we're seeing is the ability to understand channel preferences, being respectful of how customers want to converse. It's something we've talked about in the past, but now it's something we can affect. This is because we now have the ability to centralize the information, to make decisions across all the channels.

In the infancy of e-mail, everyone said that all channels would converge to e-mail. But frankly I think that mobile is the great communications medium for our sector. Maybe many of the things we're doing with e-mail will be done with Twitter. If that is so, long messages won't necessarily be the first choice for marketing communications. Maybe we'll figure out how to get purchase orders in 140 characters.

Kerner: It's organizing large groups of people based on behaviors. Maybe you have 100 different segments, but you're betting that a certain number will act in certain ways. You might think of it as different buyer journeys. Increasingly with today's marketing automation tools and Web analytics, you're able to track behavior at a pretty granular level, down to the page-entry level or even the actual content on the page. Most marketing tools today don't yet have that kind of robust analytical abilities.

Another thing I'm seeing is a huge interest in consolidating global data into a single database and running global campaigns from a single repository. For international companies, regional campaigns then could easily be turned into global ones. There is a lot of interest in this, and the key to that is getting good, clean data in one place.

Zales: First, there is a growing preference for marketers to own their data rather than rent it. They realize that one touch is not enough and nurturing customers leads to more closed business. There's also a growing need for a broader range of information about people, so data providers must use multiple sources of data collection to provide actionable information.

Leading from this, I'd also say we're seeing a merging of contacts with company data. Marketers need breadth, depth and freshness of both people and company data to sell effectively. And finally, there is an increasing need to integrate data so both sales and marketing can act on it. This means integrating the data into both sales and marketing applications.

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