A quality database is the key to building one-to-one business relationships
Those who sell into business-to-business (B-to-B) markets see great promise in one-to-one marketing, a systematic approach to forming relationships with worthwhile prospects that builds on previous communications and delivers them to the sales team when they are primed for contact.
However, many who have strived to make one-to-one marketing work in their B-to-B campaigns have been met with disappointment: too few leads, very high cost per lead and/or sales force resistance to lead follow-up.
The marketing database is the most critical factor in determining the success of a one-to-one marketing effort, providing the targeting information and acting as the institutional memory for the interactions between a company and its prospects. The key is to ensure the quality of the data within the marketing database. To do so, the data must be consistent, complete and well maintained.
Integrate Data Sources
When the process of implementing a one-to-one marketing program begins, the marketing team often finds itself staring at reams of raw data from disparate sources. There might be several different databases and subdatabases, some with different conventions for input fields, some kept current, some poorly maintained.
The first logical step in making the data consistent is to merge and normalize the data, seeking to arrive at one set of accounts and one set of customer locations (defined here as “sites”), with each unique contact name linked to a site and account. Data aging must be a consideration as well; every month, 2 percent of the data in a prospect database become useless. Take this into account when determining whether to continue to work with older data sets.
The next step is to standardize and grade contacts. To ensure reliable data, each field must be internally consistent (containing the same type of data, in the same format, for each record). Also, the data should be validated using third-party tools, including the U.S. Postal Service’s Coding Accuracy Support System (CASS) and National Change of Address (NCOA), and DUNS number matching service from D&B (a unique nine-digit identifier for individual sites, including a relational hierarchy to other corporate entities).
There are several types of data issues that these tools might identify, and these issues must be resolved, or the suspect records must be eliminated from the “usable” list:
• Invalid address, based on either CASS or NCOA.
• Duplicate record. For example, consider a company with IBM as a primary customer. Its newly merged database might hold 40 different IBM sites. However, for a number of those sites the only difference could be the way the name is represented (i.e., for some sites, the corporate name is IBM, while for others, it’s Inter-national Business Machines, Int’l. Business Machines or I.B.M.). These inconsistencies must be resolved. In this example, while you thought you were starting with 40 unique sites, you could end up with only 15 unique sites.
• Invalid company, based on inability to match to a valid DUNS number.
In going through this process, a typical Massini Group client might start with 150,000 records spread across 10 to 15 data sources and end the process with 50,000 usable records. While this result could be considered disappointing, it is better to concentrate future investment in 50,000 known valid records than to spread it over 150,000 records, wasting two-thirds of the investment.
The result of this initial set of steps is that an unstructured set of data is transformed into a usable database with a single format, in which all relationships are connected and each usable record is verified to offer a high probability of sales success.
Identify the Customer Universe
The data are now well structured and consistent. It is safe to presume, however, the database remains incomplete. Based on Massini Group’s experience working with Fortune 1000 B-to-B technology companies, the sites in a B-to-B enterprise’s marketing database represent only 25 to 40 percent of the potential sites in its target universe.
There are several steps to effectively build out a database to encompass the market universe. To begin, the existing sites in the database should be segmented, perhaps as simply as by assigning SIC codes. One application of this step is to correlate the SIC codes to historical sales data, allowing the marketing team to better understand where the company has had its greatest success.
Another input to the process should be to identify new markets seen as representing future opportunity. For example, data storage company StorageTek identified medical imaging applications within large hospitals as a new market opportunity for its new generation of storage subsystems. The current marketing database contained only 238 records within the hospital segment. By working with third-party sources, StorageTek was able to add to the database another 2,500 qualified, nonduplicated hospitals to target for additional marketing investment. This approach enables marketing to build out the database in a prioritized way, setting parameters around areas of greatest business opportunity.
Identify the Individual Customer
Once the universe of sites has been defined, your program is positioned to work. But savvy marketers know that selling occurs on an individual level—not a site-based level. Therefore, those individual decision-makers must be properly identified to initiate dialogue. The most efficient approach is to identify the job titles of those who are most relevant to the sales process, defined by receptivity, pain and authority:
1. Receptivity: What title most often gets you in the door at a prospect site?
2. Pain: What title most often has a need for your product or service?
3. Authority: What title most often signs off on the purchase?
From this, sales and marketing can work together to define a key player map—an organizational chart that identifies the titles and positions in the hierarchy of a typical site, who reports to them and to whom they report. With this information, the database can be coded with the titles as defined above.
The Public Sector Business unit of Dell Computer provides an example of how this key player identification process can generate excellent results. Several years ago, the Dell Public marketing team realized, following the key player identification process, that it had at least one key player relationship with only 31 percent of the sites in its highest potential segments (see Figure 2, above). The Dell team, working with Massini Group, initiated a three-phase process to increase revenue from these segments. Phase one focused on the use of telemarketing to identify key players at a high percentage of sites. Over the next six quarters, systematic work in this area raised key player penetration to close to 90 percent—a significant increase.
If the value of the database is to be maintained, consistent approaches to data entry and data capture, along with systematic processes to filter the data to maintain database order and integrity, must be established and followed. Of paramount importance: Each instance of contact with a prospect must be recorded promptly and accurately.
To illustrate this, consider again the Dell Computer case study. Success in phase one meant a new key player name was added to the database. Phase two then used a combination of telemarketing and direct mail to cause opt-in, (i.e., an individual agreeing to receive further communication from Dell). This obviously is a critical new piece of information that needs to be recorded accurately and maintained in the database.
Phase three used e-mail and other electronic communication to continue to make offers and generate response from the client. This example illustrates that each action must be connected to the correct contact, which must then be connected to the correct site. If these steps successfully occur over time, increasingly effective communication can result, which will motivate the prospect to have a tighter relationship with the company.
At every point of customer contact, the loss or misapplication of data can turn a sales opportunity into a lost opportunity. But when the marketing database is created and maintained correctly, the full potential of one-to-one marketing can be realized, as can the synergy between the marketing department and the sales department. The sales team gets sites it wants to sell to, titles that are of value and prospective clients who are receptive to viewing offers for a particular product or category, while the marketing department fulfills its role in delivering well-qualified leads to sales, with a system that does so reliably over the long term.
Kermit Yensen is CEO of Massini Group, an Oregon-based direct marketing company that provides sales-funnel acceleration solutions. He can be reached at (503) 640-9800 or via e-mail at email@example.com.