The Devil Is In The Data

1
The Devil Is In The Data

• DMB Conference
• March, 2001
• JOHN M. COE, President
• Database Marketing Associates, Inc.
• 480-778-9900

2
The 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)

3
The 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

4
The 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

5
Job 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

6
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 Inaccuracies
• B2B Trade Assn. Members 40
• B2B Data Compiler 50
• Year 2000 Industry Directory 100
• 2.5/month decay rate on business establishments

7
Business 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 address
• In return for your checked card we will
• place you on our white paper
• subscription list.

8
SIC 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

9
NAICS Differences

• New technology sectors
• More meaningful sectors
• NAFTA consistency
• 5 year vs. 10 year review
• Business process-based vs. based on companies
  output

10
B2B Data Sources

• Compiled data
• Response lists
• Directories
• Trade Associations
• Co-op databases
• Internal sources - many
• Customer-provided

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Internal Data Common Sources and Problems

• Accounting/financial
• Sales force or business partners
• Marketing
• Inquiries and leads
• Trade shows/seminars
• In bound call centers
• Web responses
• Customer service

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Frequently Encountered Data Problems

• 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)

13
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

14
Compiled 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)

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Compiled 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)

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Whats Good About Compiled 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

17
Whats Not So Good About 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

18
Response 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

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Whats Good About Response 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)

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Whats Not So Good About 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)

21
A 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

22
Developed ListsThe 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

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Why Bother?

• Address many of the B2B data problems discussed
  earlier
• The list I need isnt available anywhere
• Inaccurate, inappropriate or missing contact name
• Greatly enhanced selection criteria
• Increases response
• Facilitates more accurate response analysis,
  profiling and modeling

24
Building Developed Lists

• Requires merging (and purging) multiple files
  from multiple sources
• Sophisticated B2B DP experience a must
• Necessitates paying for data you wont use
• Higher response may justify additional costs
• Consider outsourcing entire process

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Developed List Value Proposition
High
Developed List
Response Lists
Price
Co-op Data
Demographic Overlay Data
Basic Compiled Business Lists
The price to value ratio of a developed list is
based upon the increase in response (closed
sales) it produces
Public Sourced Data
Low
Low
Value
High
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Selecting 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

27
Data Hygiene

• Who wants to be a hygienist?
• Its everybodys 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

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Thats all folks

• White Papers in return for your card
• Fill out evaluations
• Questions and Answers
• John.coe_at_b2bmarketing.com