Database face-to-face

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Last month, Forrester Research released “The Forrester Wave: U.S. Database Marketing Service Providers Q1 2011.” To take the pulse of the direct and database marketing industry, BtoB East Coast Bureau Chief Christopher Hosford conducted a virtual roundtable discussion with executives from companies identified in the report as industry leaders to discuss the rapidly evolving abilities of marketers to gain better customer insights for more precise targeting and revenue production. Participating in the virtual roundtable were Naras Eechambadi, senior-VP and general manager at Qauero; Dennis Kooker, president-COO of KBM Group; Bob Moorhead, VP-general manager, client services at Epsilon; Tim Suther, CMO of Acxiom; and Mark Wright, president-CEO of Targetbase. BtoB: As marketing service providers, you fill a critical role connecting list sources and marketers. What emerging trends have you seen in this arena? Naras Eechambadi: There's a movement from mere customer information provided by list managers to an understanding of customer intelligence. First, there are so many sources today—magazine response lists, crowd-sourced online data, Web-scrubbing data, phone verified contacts and more—that you have to figure out which are most accurate, and that requires a knowledge of analytics. From the marketer's perspective, he's trying to generate revenue. That's a major trend in database and direct marketing, helping the sales force be more productive, effective and efficient. Dennis Kooker: Engagement and two-way communications are concepts you hear a lot about today. But another concept to stress, which not everyone is talking about, is integrating two-way communications across silos. It's not just marketing that's out there engaging with customers and prospects. It's also sales, accounting, billing, customer service, operations, engineers and other operational areas of a business. They're all engaging today. Bob Moorhead: Forrester's “Wave Report” gets it right about how the stakes are getting higher for marketing services providers and marketers. It's become a greater focus on customer information. Everything now is happening in the digital space. Social media activity is heating up and will become increasingly important. But most important is the emergence of intelligent interaction with empowered customers. The customer today has all the power and is in charge of the relationship. Just as customers want to engage with a brand through their preferred channels, the brand has to be ready to engage with those customers whenever and however they want. There has to be a new communication philosophy that moves away from a campaign focus and toward a customercentric marketing approach. BtoB: Can you provide some examples of that kind of customercentric approach? Tim Suther: I would say the reality is that even the great brands in the world spend at best only 1% to 2% of their time with their best customers. I think it would be useful to understand what these people are doing with the rest of their lives, to leverage information about a prospect so that, when he's surfing the Internet and ends up at a particular spot, it helps to have messages that are relevant and that resonate. But there is another dimension, and it's really important: Most marketing databases are grounded in the principle of what marketers are going to do to customers—a campaign or a cadence of messages that are directed to the marketplace. But in a world where customers have the power, marketing dimensions will be bi-directional, not just a fulfillment loop. Moorhead: I like to think of it in terms of segmentation. Yes, you can personalize communications, but it's tough to get to one to one. Practically speaking, your targets are part of a segment or behavioral target. But if you stop thinking about any particular campaign—pushing out information on special events or pricing offers, for example—it will change the way you focus on customers. It should be more of a life cycle approach on how you view the relationship and how to drive value with a particular customer. We'd love to make the perfect offer to the customer at the perfect time, so we're striving for that idea. Mark Wright: It means not treating all customers the same. For example, I sometimes ask companies how many customers they have and if they can tell me their Pareto Principle, which is the 80/20 rule—80% of sales comes from 20% of the customers, for example. And they can't even answer that; they can't even identify their best customers when they engage with them. And if they can't identify those best customers, they don't even know when they engage—or leave. It used to be that technology was behind this kind of thinking, to determine these best customers after the sale. But now, it's the opposite—the technology is in front of the thinking, before the sale, and we can do all sorts of things with it. BtoB: How is technology driving these changes? Wright: The inbound is just as important as the outbound today, and companies have to be able to identify when they're having an interaction with a customer. That interaction is taking place in many more ways than it did five years ago, and companies need the ability to capture, recognize and process it into a solid data foundation where analysts can access it to create insights. But this category is evolving because technology is just the facilitator. You can spend a lot of money in technology and not get near what you're looking for. Suther: It starts with what we would describe as multidimensional insight. You want to apply that insight to the moment of truth, which you might call personalized and coordinated engagement. If you want to do this at scale, that requires technology. Last year, we observed 24 trillion consumer interactions. The idea of being able to connect granular information and facilitate action is why technology is on the scene. How do organizations deal with it? It's a journey. If a company with a mass of customers and data isn't doing any of this at a personalized level today, it shouldn't try to do it all tomorrow. It should start with big segments and begin the journey. Kooker: The world is getting more complex, but this doesn't change the essence of database marketing, which is about reporting the transaction you have with the customer, how you touched and interacted with him and the results of that interaction. Ultimately, with database marketing, you're trying to record and measure all that, then use analytics to predict what's going to happen in the future. So we are seeing a continuing push for more and more analytics. While marketing automation used to deal primarily with campaign management, now the emphasis is more on the business intelligence side of it, what insights can you gain from the knowledge of the information that resides in your database. Eechambadi: Search engine optimization is an important part of any marketing program, to get people to your site. But to do that, you must say relevant things. That gives you context for why they raised their hands. A high-tech client of ours conducts in-depth quarterly interviews with senior people in technology organizations. They transcribe the interviews and then do text mining to see what kinds of words the interviewees are using for emerging trends, needs and so forth. The patterns and phrases that occur are used to inform future marketing messages. It's almost subliminal, the words you say, but they're very important. Moorhead: First you need to focus on three things: customers, a set of disruptive marketing skills and the right architecture. But it's not just about customer databases driving all these interactions, although that's critical. What's important is a decision engine, managing all those interactions and responding intelligently. BtoB: How is social media impacting database marketing today? Kooker: Everyone talks about collecting information from social sites, and we also have collection capabilities that track every time someone mentions “ABC Company.” But in the social world, the data comes in an unstructured manner, so analytics has to convert this into structured data. Eechambadi: It depends on the situation you find yourself in. Social networks tied to business are much more effective, as are special-interest groups. LinkedIn is a great place to gather information, not about specific individuals but rather about emerging trends and hot topics. Marketers can use this as a listening device as well as a way to contribute and shape opinion. Also, we're all trying to find those key influencers, those spider networks. As marketers, our job is to identify and influence those key influencers so they can promote on your behalf. From a b-to-b perspective, that's paramount. BtoB: What will the near future of database marketing looking like? Kooker: I see b-to-b database marketing becoming more like b-to-c marketing over time. B-to-b marketers have struggled with a lack of available information coupled with more complex marketing situations. This is particularly important in the case of reseller partners. One of the reasons many b-to-b companies with resellers have struggled to put together an effective marketing database is that they're separated from the final customer. So we have to fill in more pieces for them, design data capture mechanisms for both their own businesses and their resellers. This might entail information systems that go across a company but also the intermediaries, to collect information from end buyers and create a closed loop among all three parties to create that data repository. Moorhead: I would answer it this way: I want to focus on the need to have the data and decision engines be able to support communications with customers across their channels of choice. Who knows what the next one is? We have to remind ourselves that very few people thought about Twitter 18 months ago; but within the past year, many key companies have seen the numbers and its interaction potential. It's a reality. So whether it's Twitter, or Facebook or something we haven't even thought about yet, we have to realize that a customer database can't just sit off in a data center somewhere. It has to be something you use to help facilitate communications. Suther: I think we're at the renaissance of database marketing. As all media become addressable, the ability to apply the principles that made it go in direct mail and e-mail are exactly the principles that will make marketing and ads more effective. I think of social media as being the central nervous system of marketing. The intriguing thing about this is that leading marketers will leverage this central nervous system to influence behavior of customers who choose to directly interact with a brand. It can be used when they come to your website or engage in the call center. All of this will fundamentally transform what marketers are thinking to do—not to customers, but rather with a bidirectional smartness that allows marketing to perform better. Wright: The philosophy of many companies still is about filling the bucket with names. But many companies are realizing that most categories are mature, that prospects are already other people's customers. Acquisition in the future will be more about conversion, in the sense that you're converting a competitor's customer over to you. It's a different strategy, and you can't do that just with general information. You need the customer's hot button.
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