With its rich stores of information about customer behavior, demographics, purchasing activity and other valuable information, data warehousing is a well-known, increasingly used tool in consumer marketing. It only makes sense for it to become a popular technology for the b-to-b space as well.
While data warehousing has been around for at least a decade, new tools incorporating video and Web data are providing marketers with even better ways to build bigger data warehouses with a host of business applications.
Gevity HR, a human resources outsourcing company in Bradenton, Fla., bases its whole effort on a terabyte-size data warehouse serving 115,000 employees in more than 8,000 companies, said CIO Lisa Harris.
The warehouse helps the marketing department spot important trends, she said. "We look at what kinds of clients are buying the services," Harris said. "We look at SICs [standard industrial classifications], we target specific industries, and we can look at penetration and pricing and employee size in each industry. We can see where we’re profitable in each niche."
The HR company runs its entire business on the warehouse—"the whole kit and caboodle," in Harris’ words. It includes all information on customers and prospects; it can be accessed by call center employees for customer service; and bonuses are based on data in the warehouse, such as how fast calls get answered, the size of the average transaction and customer satisfaction, Harris said.
Pantellos Group L.P., a supply chain solutions company in Houston, serving utilities and energy services firms, was built from the ground up early this year, based on data warehouse technology, said its VP-technology Moneesh Arora.
Since Jan. 1, the server has logged over 20,000 transactions among 30 of the largest utility companies in North America, with double-digit growth each month. The database "is used to track the transactions, perform the billing and allow our members to perform data mining" on data they generate, Arora said. Eventually, the data warehouse will become Pantellos’ prime asset, he said.
Private data insecurities
The problem with extracting data from most Web data warehouses is that users are anonymous and there are privacy issues. Arora said security is basic to the Pantellos marketplace, allowing utilities to only look at and analyze their own data.
I-Frontier, a Philadelphia-based interactive marketing agency that counts AstraZeneca and Universal Studios among its clients, has launched a back-end tracking tool that tracks users’ Web site activity back to promotional efforts using data collection.
"We can see that 100 users clicked on banner A on Yahoo!, arrived at a client’s site, looked at 4 pages, spent a total of 4.5 minutes, then left without completing the registration form," said Jeremy Lockhorn, director-media technologies for i-Frontier.
B-to-b issues unique
While business-to-consumer companies worry most about issues like combining online and offline data, b-to-b companies have their own issues, said Ruth P. Stevens, an e-marketing strategist in New York.
"We have 125 million households in the U.S. and 12 million businesses," she said. "But business data tends to be more complex than consumer data on a record-by-record basis because there are so many ‘influencers’ and ‘specializers’ and ‘recommenders’ and gatekeepers involved in each purchase decision," Stevens said.
"You might be communicating with one person who is part of a much larger enterprise, reporting to regional, corporate and global officers," Stevens said. "So b-to-b databases wind up being pretty complicated to manage."
A second obstacle is getting sales departments to share their data, said Bernice Grossman, president of DMRS Group Inc., New York, which has worked on dozens of b-to-b data warehouse projects. Channel conflicts can occur when the sales force is reluctant to share leads with the marketing department, Grossman said.
Pulling all the data together can be an issue, Stevens said. "Marketing databases built around customer records are fed by sales contact information, but having the salesman give that up can be an issue. They’re also fed by sales data, delivery data and appended data like InfoUSA or Dun & Bradstreet lists." A third source of b-to-b data may come from legacy systems, or file cards, or information stored in the minds of salespeople.
Data collecting key
The key to collecting this data successfully is to buy applications for your warehouse that offer things like integrated lead generation and tracking that improve sales performance directly. "When that happens, sales and marketing can become friends," Stevens said. "There’s certain information you want to share."
Gevity HR integrates these components so the sales staff can continue to use applications they’re familiar with, Gevity HR’s Harris said. Good data and giving the right functionality to each department are keys to Gevity HR’s success, she said.
Vendors that fail to integrate data warehouses with applications wind up leaving assets unused, said John Thompson, VP-worldwide marketing at WhiteCross Systems Inc., a Chicago-based vendor of customer relationship management systems.
Loyalty cards degenerate
"One of the great shames in America is the stores have given out these loyalty cards and they’ve let it degenerate into pure price competition," Thompson said. "They sell that data and the retailers get no benefit in the end. That’s an industry that’s given up the benefits from collecting its data."
That is a mistake, said Tom Ronk, CEO of Salesmation Inc., Newport Beach, Calif., another CRM vendor owned by eSynergies Inc.
"The lines between advertising, marketing and sales are blurring," Ronk said. With a data warehouse, "you can advertise, market and sell at the same time, driving people directly to the transaction."
Outsourcing analysis of your data warehouse can also bring this within the range of most advertisers’ budgets, he said. Salesmation charges between $2,000 to $5,000 per month for a service that can extract data from Web sites, phone banks or direct mail channels and come up with business rules from it.
By registering users and disclosing the use of their data, valuable opportunities can emerge from the rules, Ronk said.