For the uninitiated, the prospect of developing a business-to-business (B2B) database can be daunting. There are many business-to-business data suppliers, each claiming to own the best data and offer the best services.
There is also the tricky fact that business data decays much more quickly than its consumer counterpart.
Add to this the headache, present since last October, of new regulatory requirements for business data and you might be tempted to abandon the project before it starts. But whatever the difficulties posed by buying B2B data, it is still sensible to build up a database of your business customers, not only for prospecting, but also to maintain regular contact with them. There are certain rules of thumb you can follow to overcome the challenges - and they can help to maintain your sanity.
Rule 1 Do a database audit - make the best of what you already have
Given the amount of data your organisation is likely to be holding already, it is prudent to start by auditing that data. So the first step to the utopian world of an error-free database is to undertake a health-check.
This involves comparing your database against larger third-party data sets. You will need to send your database to a third party organisation so that they can match your data to their business universe.
Having matched your data they will be able to determine where the gaps are and where the data is 'dirty', point out 'gone-aways' and highlight how your data can be enhanced.
Rule 2 Data accuracy is imperative
Given that at least 10 per cent of companies are thought to change address each year, regular validation is a must. Sadly, most businesses will choose to update the accuracy of their data - at best once a year and at worst, never.
Now there's an even greater need for B2B database accuracy. Since last October, everyone who processes data has been required to fully comply with the Data Protection Act 1998. This applies to any data, records or information that can identify a living individual (either from a single or combined data source) and includes marketing databases, service records, accounting systems or any other computing or manual system.
The 1998 Act does not explicitly cover business data, but rather protects personal information about individuals in general. However, any data that allows you to identify an individual in a company is covered by the Act.
How so? Well, identification is mostly by name, but job titles and e-mail addresses can also distinguish an individual. And under the Act, personal data is deemed inaccurate if it is incorrect, incomplete, irrelevant, excessive or misleading in any way.
Rule 3 B2B data has fewer verification tools than consumer data, but this is changing
There may be 2.5 million companies in the UK but there is no such thing as a universal B2B file. Companies House comes the closest to a complete file with its 1.8 million registered businesses. Another near-comprehensive validation source is the Royal Mail's Postal Address File (PAF) which is available as a verification tool through various address management companies.
Relying on PAF verification alone is unlikely to be enough as it is incomplete on small businesses, several of which can be located under the same postcode.
This is where verifying against telephone directory listings comes in - data-sets such as BT's OSIS file which lists all current numbers. A combination of the Companies House, PAF and additional directories will give you accurate verification of most addresses.
The good news is that services and tools are increasingly being made available from B2B companies to combat data decay. These include applications such as Blue Sheep's Business Suppression File which contains a list of 700,000 business movers over the past two years, along with test samples and response analysis. The REaD Group has recently launched its Business Suppression File - a monthly-updated suppression set of 300,000 records under 18 months old. And another B2B suppression file, The Business Suppression File, has come on the market at the same time, courtesy of a consortium that includes the Direct Marketing Association, Mardev and The Prospect Shop.
Rule 4 Be discerning when acquiring B2B data through list and database rental
Your analysis may point to a need for data acquisition and, indeed, the majority of businesses tend to combine external lists with their internal data to create their database (see panel above). In the world of B2B, there are three types of list for rental: compiled, public and responsive.
If your strategy demands widespread coverage of your target market, you are better off using a compiled or public list. Compiled lists are self-explanatory, in that they are compiled for a specific purpose. The vertical markets covered by such lists include schools and architects.
Examples of public lists include Companies House data and the various business directories.
Compiled B2B lists may not prove well-targeted enough for your purposes.
If so, market-universe lists such as those provided by Dun & Bradstreet or Market Locations are a good start. You can refine such sources by overlaying them on your own business-customer file, to find prospects that match your customer profile.
For good B2B response rates, however, the best results will come from what the trade calls responsive lists - data on people who have actively bought a B2B product or subscribed to a magazine. Subscription lists are among the most widely used sources of business names.
Rule 5 Telemarketing - a good if expensive way to a DIY database
For depth and quality in your database, nothing quite beats researching customer details using in-house or outsourced telemarketing. The telephone can also be used to capture details from incoming calls which may be stored as part of your CRM programme.
When creating B2B records, bear in mind that many variables are needed, such as the postal address, phone number, nature of the premises, name of the individual and their job title. To enhance the real value of your B2B database, other factors may also need to be taken into consideration. These include the relevant demographics of the targeted business locations, the history and future potential of those target organisations and appropriate market segmentation.
These elements will help maximise your sales focus and ultimately transform the database into a working and evolving business tool. It is also possible to fine-tune the analysis of records to gain detailed subsets of the data revealing information on areas such as best/worst customers or specific contacts such as product buyers.
The problem with telemarketing a database is that it can be costly - up to £3 per call - and doesn't provide analytical information based on statistics or independent data. And more specific information can be harder to come by using telemarketing, as increasingly companies are adopting a 'no names' policy.
Rule 6 Discover the web
The world of e-communication now makes it possible to find a great deal of information on companies simply by browsing the web. This is an effective method for small-scale data capture which may provide contact and financial information useful to the sales analysis process.
As a tool for mass data collection and examination, however, the web would be considered a time-consuming research tool which only expresses information from the company's perspective. Nonetheless, any activity that captures relevant, up-to-date information, either in an indirect or focused way, has to be considered valuable.
With new cleaning products and data sources coming online, there has never been a more advantageous time to operate in B2B markets. And profit potential aside, the regulatory requirements for business data that were put in place last October make it essential to have good B2B data and ways of maintaining it. The guidelines presented here will hopefully help you to get started.
TOP TIPS: BUYING B2B LISTS
- Consider how the list fits within your overall communication strategy. You should be sure that it complements and supports the brand's ultimate communications goal.
- Confirm the source of data. How has it been compiled? When was the list last updated? What guarantee of accuracy is on offer?
- Confirm that the list has enough depth to really enhance your targeting. Look for fields such as line of business, size of company, age of company and determine what type of contact names are available.
- Be innovative - don't be afraid to use your list in new ways. A good data agency will have ideas on how you can do this
- Clarify your usage requirements from the outset, as this will have a significant impact on costs. Is it worth buying the list outright or will a single-use mailing be sufficient?
- Ensure the list is compliant with data protection legislation and that the list owners/managers are members of the DMA.
Source: Tim Holt, managing director, Data HQ
CASE STUDY: AINSCOUGH CRANE HIRE
Ainscough Crane Hire, the UK's largest crane-hire company, recently launched a major prospecting campaign aimed at increasing its share of the £300m UK crane-hire market. The campaign followed market analysis and customer profiles carried out by data consultancy Rocket Science.
Through analysis, Rocket Science provided Ainscough with customer profiles based on SIC business codes. This enabled Ainscough to understand the key sectors within the crane hire marketplace, as well as penetration of customers by area. It could then identify areas of customer saturation as well as areas with new business potential. Ainscough evidently had significant volume to aim for. Direct mail was sent to 30,000 prospects, targeted by SIC codes, to existing clients and prospects.
As well as directing the mail campaign, the analysis resulted in a restructure of the Ainscough sales force. Current customers are being reprioritised for receiving face-to-face calls according to potential revenue, and ensuring that there is sufficient sales coverage in geographical areas with high potential revenue.
Alan Timothy, CEO of Rocket Science, said: "By combining Ainscough's database with SIC information and telephone research we were able to uncover some very interesting facts about current and potential customers. It is always extremely important to look beyond what your own customer data tells you to understand what people do when they're not buying from you."