4 Steps to Better B-to-B Data Decisions
Making decisions with data requires a mysterious process called data mining. The term brings to mind a cadre of programmers in darkened rooms, illuminated only by the eerie glow of their monitors. The whole process sounds complicated and expensive. It can be, but getting started doesn't have to break the bank or require rocket scientists. In fact, introductory data mining is simple and cost effective. The key is starting with these four easy steps:
1. Compile a data inventory. Better data decisions start with figuring out what you have. Begin with a data inventory, which is a review of all of the fields of your database. Make sure you know exactly what every field means. Don't assume you know. Have your IT staff confirm any questionable pieces of information. You'll often be surprised at just how much information is at your fingertips.
2. Share your data across all departments. Let everyone within your marketing, sales, merchandising, creative, inventory and accounting departments know what's available. The more cross-discipline teams know what's available, the more likely the information will be used. Bring up the topic of data inventory regularly. Share with everyone what people learn.
3. Get curious about your data. You probably have your set of basic reports that you review weekly. Take the next step and look at what's behind those reports. For example, your zero to six-month house buyer file probably produces your best response. Take a look at the actual buyers within that file. What firmographic similarities do you see between them? Are there similarities between different customers that predict future behavior? Share what you find! For example, one employee noticed how certain types of banks purchase more quickly and frequently compared to financial institutions as a whole. Ironically, there was no data field that showed this — he just noticed it by the names of the banks in the six-month file. His casual comment led to a significant improvement in the company's prospect targeting.
4. Take risks. Too often companies don't run tests because they assume they'll fail. They're right. About 70 percent of them will. However, when you consider that one successful test can increase your response by 20 percent, a failure is worth the risk. Set aside budget for testing (e.g., 5 percent of your total marketing spend). Prioritize your test ideas in terms of the most likely to succeed and those with the biggest potential payback. And remember, just because a test fails doesn't mean you can't learn from it. Determine why it failed. This will help you figure out your next breakthrough.
A columnist for Retail Online Integration, George founded HAGUEdirect, a marketing agency. Previously he was a member of the Shawnee Mission, Kan.-based consulting and creative agency J. Schmid & Assoc. He has more than 10 years of experience in circulation, advertising, consulting and financial strategy in the catalog/retail industry. George's expertise includes circulation strategy, mailing execution, response analysis and financial planning. Before joining J. Schmid, George worked as catalog marketing director at Dynamic Resource Group, where he was responsible for marketing and merchandising for the Annie's Attic Needlecraft catalog, the Clotilde Sewing Notions catalog, the House of White Birches Quilter's catalog and three book clubs. George also worked on corporate acquisitions.