The Devil Is In The DataThe Devil Is In The Data

DMB Conference

March, 2001

JOHN M. COE, President

Database Marketing Associates, Inc.

480-778-9900

The Importance of B2B DataThe Importance of B2B Data

• Business data used in a direct marketing campaign accounts for 50-75% of the leverage for success

• Other levers include:• Offer (20% - 30%)• Media + seq./freq. (20% - 25%)• Creative (10% - 15%)

The Good NewsThe Good News

• More business data available today

• More sources both internal and external

• New developments• co-op databases• strategic partnerships

• New tools• on-line count systems• B2B service bureaus

The Bad NewsThe Bad News

• Accuracy continues to be a problem

• SIC to NAICS conversion process

• Decay rate of information on individuals is increasing

• Most data sources are plagued by incompleteness and poor accuracy

• Job titles do not describe function

Job TitlesJob Titles

• Title vs function is a key issue

• Some new titles (WSJ Sept. 2000)– Chief Morale Officer– Vice President of People– Chief Catalyst– Chief Listener– Code Therapist– Sex Librarian

Just How Bad Is It?Just How Bad Is It?

A recent telephone survey of 50 random selected records from each of three B2B data sources inaccuracies in contact name/title, phone number, company name and company address

Data Source % of InaccuraciesB2B Trade Assn. Members 40%B2B Data Compiler 50%Year 2000 Industry Directory 100%

2.5%/month decay rate on business establishments

Business Card TestBusiness Card Test• Pull out your business card (paper)• Check each element that has changed from one

year ago.– Name– Title and/or function– Company Name– Address– Phone number– E-mail addressIn return for your “checked” card we will place you on our “white paper”subscription list.

SIC to NAICS CodesSIC to NAICS Codes

• Coding is complete

• Early 1999 data on number of employees, establishments and revenue was completed

• March, 2000 data bridge built– 4-digit SIC to 6-digit NAICS– Conversion tables available from Dept. of

Commerce (www.doc.com)

• New UN sponsored world wide coding system on the drawing boards

NAICS DifferencesNAICS Differences

• New technology sectors

• More meaningful sectors

• NAFTA consistency

• 5 year vs. 10 year review

• Business process-based vs. based on companies output

B2B Data SourcesB2B Data Sources

• Compiled data

• Response lists

• Directories

• Trade Associations

• Co-op databases

• Internal sources - many

• Customer-provided

Internal Data – Common Internal Data – Common Sources and ProblemsSources and Problems

• Accounting/financial

• Sales force or business partners

• Marketing– Inquiries and leads– Trade shows/seminars– In bound call centers– Web responses

• Customer service

Frequently Encountered Data Frequently Encountered Data ProblemsProblems

• Different address/same company

• Characters inverted during data entry

• Different spellings/same name

• Last name only (no first name)

• Different company spellings

• No company name

• Missing information

• Duplicate records (customer files)

File Enhancement (Overlays)File Enhancement (Overlays)

• Match rates often lower than desired (65-70% but improving)– Service bureaus getting better at B2B

data processing– More enhancement data available

• Should be mission-specific

• Must be refreshed often due to decay

Compiled DataCompiled Data• Data gathered from diverse sources

and compiled into a common format

• For B2B data, refers to businesses, not individuals (except top person)

• Think of compiled data as an electronic directory of businesses

• Information often updated via phone survey (Experian called us last year)

Compiled Data ElementsCompiled Data Elements• Demographic

– Address and full postal– Location type (HQ, Franchise, plant)– Ownership type

• Geographic – several types

• Industry (up to 3 SIC/NAICS codes)

• Size in employees or dollars

• Credit score/risk: other financial info.

• Executive contact(s)

What’s Good About Compiled What’s Good About Compiled Data?Data?

• Widely available

• Selectable by an array of elements that cover the target market

• Elements often available for response analysis/profiling

• Access to quick counts on-line

• Relatively inexpensive

What’s Not So Good About What’s Not So Good About Compiled Data?Compiled Data?

• High rate of inaccuracy– Contact information highly inaccurate– Company information somewhat

inaccurate

• Not the fault of the data compiler– A reflection of business today– Source information is yellow pages– No business person NCOA

Response DataResponse Data

• Lists of individuals that have done something specific, such as:– Subscribed to a particular publication– Joined an industry organization– Attended a trade show– Attended a seminar– Added their name to an opt-in list– Responded to an offer– Purchased a product or service

What’s Good About Response What’s Good About Response Data?Data?

• Highly deliverable

• New names added frequently

• Contains product interest information

• Source often available as select• Direct mail, telemarketing, internet

• Offers for similar products or products in the same category often work well (affinity)

What’s Not So Good About What’s Not So Good About Response Data?Response Data?

• More expensive than compiled data

• May not work if specific “targeting” selects are not available

• Addressing problems (records not collected for DM purposes)

• Targeted universe may be incomplete

• Penetration within target companies likely incomplete (paid vs. controlled circulation)

A Word About eDataA Word About eData• Beware of non-opt-in lists

– Some double opt-in lists available– Make sure to offer “unsubscribe” option

• Do not assume that e-mail direct marketing is less expensive– Base conclusions on complete response

analysis (cost per sale vs. cost per response)

• Understand the “clutter factor”

• Test everything

Developed Lists:Developed Lists:The Best of Both WorldsThe Best of Both Worlds

• Driven by segmentation strategy

• Combine multiple data types and sources

– Compiled company information

– Individual response data

– Add data overlays

• Allow marketer to develop a list of individuals from specific companies who have exhibited desired behavior

Why Bother?Why Bother?

• Address many of the B2B data problems discussed earlier– “The list I need isn’t available anywhere”– Inaccurate, inappropriate or missing

contact name– Greatly enhanced selection criteria

• Increases response

• Facilitates more accurate response analysis, profiling and modeling

Building Developed ListsBuilding Developed Lists

• Requires merging (and purging) multiple files from multiple sources– Sophisticated B2B DP experience a

must

• Necessitates paying for data you won’t use– Higher response may justify additional

costs

• Consider outsourcing entire process

Developed List Value Developed List Value PropositionProposition

Low

Public Sourced Data

Basic Compiled Business Lists

Demographic Overlay Data

Response Lists Developed List

Co-op Data

The price to value ratio of a developedlist is based upon the increase in response (closed sales) it produces

Price

Value HighLow

High

Selecting An Outside VendorSelecting An Outside Vendor• Key questions to ask

– B2B specialization and understanding – Standard record layouts for B2B– Full description of capabilities

• Request a sample B2B merge/purge report package

• Ask for a trial run and inspect results

• Check client references

Data HygieneData Hygiene

• Who wants to be a hygienist?

• It’s everybody’s job

• There should be a budget for hygiene

• Standard methods of updating & cleaning B2B data

• Some unique approaches and ideas

• The Internet can play a powerful role

That’s all folksThat’s all folks

• White Papers in return for your card

• Fill out evaluations

• Questions and Answers

• John.coe@b2bmarketing.com