Debating the database future

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While the marketing database is central to a b-to-b company's ability to measure ROI—a crucial element in determining success—many factors affect a company's ability to do so successfully. BtoB assembled an all-star cast of database marketing experts in a virtual roundtable discussion by telephone to discuss this and other trends in database marketing, as well as the strategies marketers should be implementing to shore up business in the face of a rocky economy. Participants in the roundtable were: Mark Amtower, partner, Amtower & Co., a business-to-government marketing consultancy; Cyndi Greenglass, president, Agency Services, Diamond Marketing Group, a database marketing agency; M.H. “Mac” McIntosh, b-to-b sales lead expert and publisher of “Sales Lead Report”; and Roy Wollen, principal, Database Marketing Consulting, a database marketing consultancy. BtoB: What is the biggest trend that you see in the database marketing world today? Mark Amtower: ROI. People are looking to get immediate payback today, especially in this economy. Management always wants you to be in a growth mode, and right now most b-to-b firms are in a maintain mode, so an immediate ROI is necessary. Roy Wollen: I will agree that measurement, ROI and accountability of marketing spend is what keeps everybody up at night, but I also think the challenges are harder today. Those wacky customers kind of do whatever they want, and it's getting worse with cross-channel shopping in terms of people responding in multiple channels. We send them one thing in direct mail, then we make a phone call and they show up on the Web, and it's hard to track that cross-channel behavior. I also think we are still plagued by [the facts that] we don't agree on the metrics and the numbers aren't consistent across systems. And we still are not together as an industry in terms of standardizing what is the definition of success. Cyndi Greenglass: I agree, ROI is absolutely essential. One of the good things about database marketing over the years is that it is probably the only way to get at any kind of measurement. We have all used our databases to create some sort of measurement and some benchmarks for success. What I am seeing especially with this down economy—and going back to something Mark said earlier—when we're in growth mode and when the economy is comfortably booming, we see a lot of focus on SFA, or sales force automation, and customer acquisition. Everybody's out there acquiring more and spending more. When we are looking at difficult economic times, we are all retrenching back to retention. We're looking at how do we hold on to the customers we have. We worry about customer attrition, and our database systems become so much more important in being able to determine who are our best customers and how do we hold on to them? How do we leverage that database for customer retention in more difficult economic times? How do we look at a profitable customer versus those who aren't? There is going to be more and more emphasis placed on the database. M.H. “Mac” McIntosh: People in a down economy do retreat to their database because often they are not given the funds to go out and do new endeavors. They go back to what they have, and their database is one of those resources. They are looking for ROI and asking where can they get the most bang for the buck in either leads, or sales, or new business or more business from existing customers. I think another trend that's really interesting is that the traditional database providers are perhaps threatened because there are these new services like ZoomInfo, Jigsaw and Spoke that are bringing together a data exchange of business card-type data out of people's personal Rolodexes. I think it's going to turn the whole database industry on its ear pretty quickly, because the traditional database companies are still working in the paradigm that “we have the best data and you have to do it our way” and they are slow and cumbersome in making stuff available. I think that's another trend worth watching. BtoB: They don't have a corner on the market anymore because of such folks as Jigsaw Data Corp., Zoom Information and the rest? McIntosh: I think that's true. And publishers will be very selective about how they make their databases available. So it's going to have to open up a lot of database companies and publishers of data into being able to enable more of the “all you can eat” or “help yourself” approach of accessing that data and being able to use it somewhat indefinitely rather than rental, rather than having to buy a subscription at a high-dollar volume. It's a much lower dollar volume and much more pay-per-play. I think it's difficult to get functional-level contacts from a lot of the databases. It's really easy to get C-level. They are available everywhere. If you are trying to get down to the marketing manager or the production manager, it's much more difficult in a database environment to get those names. And that's really the strength of a lot of these data exchanges. The mashup is starting to happen with data. Amtower: What you are describing is kind of a database 2.0. It's the integration of database technology overlaid on the Web for basically the same purpose, which is going to certainly impact companies like D&B and InfoUSA. But it does require active participation. And if you really want the C-level people in what I would term the midsize-and-up companies—the $250 million-and-up-size companies—a lot of those CEOs now are masking or just removing their contact information because they had been contacted by so many people. BtoB: Will the challenge of maintaining data quality in b-to-b ever be solved? McIntosh: I don't think it will ever be solved 100%. But it's the cost of doing business: Some percentage of it will be out of date. But the rest—the balance of the list—is responsive enough, and is getting through and is getting you results that you are willing to not throw out the baby with the bath water. Greenglass: Since we've asked the same question for 20 years—and we will never solve that—maybe that's the wrong question to ask. Maybe we need to frame the question not as, “Will we ever find the solution to b-to-b data accuracy and hygiene?” but “What is the definition of acceptable data accuracy and hygiene?” and to accept the fact that in b-to-b, there's much more complex data. I'm not a proponent of “let's accept dirty data.” We have to maybe set a different mind-set as to what is considered acceptable at different levels of communication in the channel. So are we comfortable with a certain level of accuracy at a site level? Then when we get down to a contact level, what should be the benchmark of what we accept? Maybe we have to frame accuracy in different ways for different purposes. I know it sounds like I'm throwing in the towel and saying I'm going to accept the fact that it's never going to get perfect. Sometimes our customers expect perfection in b-to-b data hygiene and so they never work towards a better goal. They just throw up their arms and say, “We will never get 100%, so data's always bad.” I'm saying let's do it incrementally and accept the fact that nothing is perfect; and certainly data hygiene in b-to-b will never be perfect. Amtower: There are two types of databases. There is a customer database and a prospect database, and you are able to do things with the customer database (or you should be able to do things with the customer database) that you will not be able to do with the prospect database. If these are customers of any standing, any length of time, any purchasing history with you, and you have a real relationship with them, if you treat them right, they are more likely to share more pertinent data with you including other contact information including if and when they are going to move. You can enhance your data where you own a relationship. Greenglass: I think you make a really good point to distinguish between suspect prospect databases and customer databases. With the customer data, it behooves us to work with our customers to maintain and keep it clean. And there is a greater opportunity, too, because of the relationship and communication. I think there is also much more that we can do and our customers can do in setting audit criteria to bring cleaner data in. We always go back to our internal systems of what are we doing to capture better data in the first place. Do we have checks and balances to audit that data, [are we] making sure that people who capture data in your organizations—customer service inside sales, you know, even the sales teams, registration forums online—that you are creating consistency in the way you capture information? Wollen: As we do better jobs, as we do a better job as a b-to-b marketer, there is an advocacy going on. If people really want our stuff, and now that these are real existing customers that we have a good relationship with, they will actually reach out to us, and say, “You didn't get my e-mail address quite right” or “I moved; I'm at a brand new company, but I want to keep doing business with you. Here is my new contact information, my new job title.” As we do a better job as b-to-b marketers, we will get more people to come back to us as advocates and say, “Hey, you missed that.” McIntosh: Even on acquisition, if you give them something of value in return for their data, they will often give it—especially if you guarantee them some privacy. Wollen: If there is a value and trust level, customers will reveal themselves and the anonymity will go away because there is an exchange and a trust. But anytime we creep our customers or prospects out, they run away. It's over, and it's not a quality issue at that point. You are never going to reach that person again. BtoB: What if anything should marketers be doing differently in this kind of economy? Greenglass: I call it “mind the gap.” In England, they have that big sign when you are going to step onto the subway, saying “mind the gap.” You mind the gap by looking down so you don't fall in. Sometimes it's not so much what's there in your database, but what's not there. It's kind of like listening to the silence. Step back and look in your databases. Look at your trends. I call it “gap analysis.” Who is not there? What companies do you normally service that are starting to disappear out of your transactions or your communications? Do you have some potential risk? Can you also say what's missing where we know they are potentially recession-proof? Amtower [has] said government tends to be a little more recession-proof.What else is a little more resistant right now? Do you have pockets within your database you can mine and use those as opportunities to offset risk in other areas? Wollen: Marketers need to do a better a job of measuring their investments. That's even more important now because of the economy, but it's a good practice going forward. We have so many channels that we can use to invest in, whether it is e-mail, direct mail, corporate marketing, racks in a store, dealers, agents and so on. The question is, so what? Which one works and how do we know that that's true? I think that is really the essence of why you build the marketing database, which is to evaluate your marketing programs. But beyond that who is buying, and what are they buying and what do they want from us? It's really a more customercentric question at that point, and so the question about the economy is almost a distraction. I think if we just redouble our efforts to find that measurement solution, a lot of things fall into place ... in terms of who we should be going after and how much we should be spending. McIntosh: I recommend in a down economy shifting more of what's left of the marketing budget over into database-driven marketing. It's measuring so you can concentrate your efforts where you have the most chance for showing some bang for the buck because that's what gets your budget either approved, expanded or maintained in a down economy. The CFOs are looking for areas to cut costs, and marketing is one of the first to go—especially if we are not being accountable and we can't show ROI. BtoB: How are marketers handling tracking in a multichannel environment so that they can determine the effect of each channel? Wollen: I feel that most marketers are a little behind in terms of measuring cross-channel response attribution. But they are getting there, and I think that the best b-to-b marketers are not only succeeding for themselves but also leading the industry and sharing what they know. McIntosh: A lot of the marketing technology that's taken off is perceived as inexpensive. For example, it's much cheaper to send somebody an e-mail, so therefore let's do e-mail and not do direct mail because direct mail has a cost-per-touch at a much higher rate. Marketers are often surprised that some of the more traditional methods like the reply card are still working very well. Why? Because it's easiest for the prospect. They don't necessarily want to be called or sold yet, or they are afraid [that] if they go to the Web site, they will get lost or not be able to find what they want. But they can check a box to return a reply card, and I think it stuns people that, when they are doing database-driven direct marketing, they think that everyone wants to go to the Web as a primary way to respond. And although a lot do, a lot don't. Wollen: We all get swept away by the new technology, but call centers are very strong in b-to-b. What's important is if [customers] are expressing a channel preference—if they want to buy it over the phone or they want to buy it themselves over the Web—our database should track that. I think our database really has to be a black belt at understanding the buying process, and that is to say who is the decision-maker, how do we reach them, is that an inside person, is that an outside person? If it's an inside person, is this a purchasing department, or purchasing agent or a committee, and what part of this buying cycle are they in? Putting all these connections together is the job of the database. I think the best b-to-b marketers are keeping track of all the different touches and all the different connections within a site. Wollen: One of the biggest gaps that I have seen in database marketing with regard to b-to-b is “this is great in theory.” Actually tracking all of the things that we can't see in terms of the influence of the sale and the indirect relationships is really what our challenge should be. That's what I work on all day. BtoB: What are marketers getting wrong when it comes to database marketing? Amtower: The first thing, I think, is the over-reliance on totally automated processes. Greenglass: There is an assumption you don't have to think and that a database, in and off itself, does anything. We forget that the database is like the engine in a car. It doesn't go anywhere without a driver. The marketer has the responsibility to make that car go and to direct it by looking both in the rearview mirror sometimes and out through the windshield, because you can't look in the rearview mirror all the time. You are going to get in an accident, and people tend to look at historical data in their database and think they're driving the car; or they don't want to drive it at all and they think the database is just going to automate [everything] for them. Wollen: The big thing I think we do wrong is we set up artificial conflicts where none really have to be there; that is to say, cross-channel conflicts. We tend to get in the conference room and fight over “that's my ROI. I invested in that and even though the response came in the other channel, I am fighting for it since I am being measured on results. I am fighting for that sale and I don't think [it should be yours], even though my customer crossed over and bought from you. It's originally my customer and not yours.” What I am illustrating here is an artificial conflict based on silos that are structured around channels. I think that the customer couldn't care less who gets credit for the sale. It's only us that fight among ourselves when we are in these silos. And if we avoided this kind of cross-channel hell and just followed the customer, and figured out which way he or she wanted to buy, and then measured success from a corporate perspective—not from a channel perspective—then we would be solving a lot of problems. BtoB: Does that infighting affect the customer or is that just internal? Wollen: It affects the customer. For example, when they come to the store with my coupon that's only available online and they are disappointed because they can't redeem their coupon in one channel versus another, bad will is created. That could be our biggest customer, but there is a bad experience when they do cross channels. And then all of a sudden, I have lost them. You better believe that it affects the customer. McIntosh: If database marketers' compensations were tied more to helping the company meet sales and revenue goals, they would behave differently. Amtower: The thing that my clients have taught me over the years is if marketing is not directly aligned with sales goals, it is doomed to failure. So the communications between sales and marketing is critical to the success of the b-to-b companies that I work with. BtoB: What are marketers getting right in the world of the database marketing? McIntosh: I think that they are starting to understand that multitouch, ongoing marketing communications are much more effective than one-shot events. And they are understanding that databases work much better than rental lists. I think that also relates to understanding that the life cycle of a customer ebbs and flows. Just because I bought a new PC monitor doesn't mean that I am going to place an order next week with the company I bought it from. Wollen: I admire what the b-to-b marketers do in terms of the science of measurement and using left brain tactics. I have always admired the way b-to-b marketers really embrace the numbers. And I think we are doing that right, and it's just so much more important now because of cross-channel. I think that's our future. Amtower: In my market, the fact that several of the more recently successful marketers are starting to ask very simple questions again of their prospects and most likely customers, or their most likely prospects and their customers [is what they're getting right]. Those questions are simply “What do you read?” “What do you attend?” and “What do you belong to?” Greenglass: There seems to be a greater effort under way to integrate database efforts and sales force automation or CRM efforts. I think that we are seeing many of these initial CRM initiatives went off and built these great systems and forgot the basic fundamentals of a clean database and accurate database. And somehow the underlying data in your database was an afterthought to the CRM system. They focused more on the contact management side. The two groups have come together, sales and marketing, in this arena to say true, good CRM depends on good accurate data in the database and vice versa, so there seems to be closer connection between the two. McIntosh: Having silos of data is not helpful to anybody, and if there is a way to tie them into a singular system [you should]. Although the view of the salespeople may be different than the view of the marketer, you don't want to have two different records in two different places with two different addresses and not be sure which one's accurate and which one is up-to-date. M
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