Ask a room full of B2B marketers to name their greatest challenge and they will almost all tell you it is data. In fact they’ll probably shout it at you. Or spit the word out with a fair degree of venom.
There are two main reasons for this. Firstly, B2B data is famously difficult to manage and maintain. As Neil Fox, business strategist at marketing agency TDA, comments, The problem with business data is the rate at which it corrodes. Factors such as staff turnover, promotions and changes in business structure all have an impact and it deteriorates much faster than consumer data.
Secondly, there are few good sources of B2B data. Simon Lawrence, MD at B2B data consultancy Information Arts, says, There is no universal census of UK business. The closest we have is Companies House records, but this only provides information on registered offices.
To date then, B2B marketers that need to supplement their own fast-decaying data have either had to use vague data from Companies House or highly niche data from list providers. The latter has always been of variable quality, and is often prohibitively expensive.
Some are beginning to explore an alternative option: data pooling. Quite simply, this involves contributing your data to a pool and in return withdrawing data from the pool. While not a new idea it has in fact been around for many years it is new to many B2B marketers and it is an idea that a growing number are looking at more seriously. While not everyone is persuaded of the benefits data pooling can offer, it is nonetheless a topic that few B2B marketers can afford to ignore.
Indoor pools
Perhaps the most obvious way to create a data pool is to do it yourself. This is what Robert Prime, director of marketing at Scottish life insurance firm Life Insure, did. He explains, We set up a four-way reciprocal arrangement with other companies who, whilst in the same sector as us, were not in competition with us.
At first the experiment worked well. As a small company initially we did very well from data pooling, says Prime. It allowed us access to a much wider range of customers than we would have otherwise reached on a tight budget. We made a lot more sales and formed strong alliances with companies in related industries.
However, Life Industries has since grown and Prime is now less keen on his data pool. The main problem we have found with B2B data pooling is trying to balance the data a company puts into it with what they get from it quality-wise, he explains. We have put in high-quality data from our customer base before, only to receive access to poor data with low contact percentages and lower conversions.
Indeed, achieving this balance is one of the main obstacles for any company to overcome when forming or joining a data pool. You might be able to accept that what you receive back will not be of the exact same value as what you put in, but it is hard to accept when it turns out to not even be close.
And yet, Prime is confident that data pooling will become more popular in the UK. He concludes, Data pooling in the USA is big business, and it will become more prominent in the UK. This is simply because many companies are struggling and are looking for ways to leverage the customer base they built up in more productive times.
Outdoor pools
Another way of pooling data is to go to an established pool. The best known of these is the Abacus B2B data cooperative. Launched four years ago specifically for those B2B companies with direct mail strategies there are now around 60 members, representing 50 million transactions and 2.5 million business contacts.
Richard Wright, marketing manager at Abacus, says, Successful marketers rely on a combination of data sources including compiled, vertical lists and transactional data that they integrate with their analytical efforts. The result is intelligent targeting built upon a data solution of enriched content that improves acquisition performance cost effectively.
The growing enthusiasm for data pooling means that Abacus is facing growing competition from data companies that are setting up their own pools. For example, Adare has set one up for clients such as The Economist Group, Wall Street Journal and Lyco Direct.
Andrew Woodger, data services director at Adare, explains, Single data sources simply aren’t good enough, so it makes a lot of sense for companies like those to pool their data. We can cross-validate the information they hold; we can gain access to multiple single licenses to mail, and of course we can grow their databases.
An alternative approach
Blue Sheep, another data company, has recently begun to look into this area, and is taking a subtly different approach. Head of client partnerships, Andy Champion, explains, Data pools have long been popular in the consumer marketing arena with Transactis. There’s Reciprocate in the charity sector, and I believe it’s starting to gain some traction in the business marketing field. However, the problem with them is that other people can see your data. So, instead we’ve set up a closed user-group.
He goes on to describe how this works. Companies put in their data and get back information on trends. They can then cross-reference this with data from our UK Business Universe. It’s free to join the group, but there are fees for applying the intelligence to their own customers, and for applying it to draw-down data from the UK Business Universe. It’s early days but I’ve already seen one instance where this sort of shared intelligence produced a 318 per cent uplift in return on investment in marketing.
Lipstick on a pig?
Not everyone is so sure that data pooling is the answer. Nick Washbourne, business development director at data provider Market Location, says, Data pools can be helpful, but they do suffer from several fundamental flaws. Firstly, they’re only as accurate and up-to-date as the data being placed in the pool, so overall quality is based on the varying and often poor refresh periods of the contributors. Secondly, by their very nature, data pools are not likely to benefit from a single overarching quality strategy, and could potentially offer organisations data that is out-of-date and therefore irrelevant.
Keith Smith is an account director at Upfront, a business development agency that has just launched its own news and CRM system to track new business opportunities for marketing agencies. He agrees that an untended pool made up of several companies’ dirty bathwater is unlikely to be much use to anyone. In the past, I’ve paid top dollar and cut-price and it’s hard to tell the results apart out-of-date is out-of-date. And therein lies the problem; data is compiled, de-duped, sold, re-sold and repackaged, but no matter how you dress it up, it’s still the equivalent of putting lipstick on a pig.
He continues, Data pooling is only going to exacerbate the problem. Any company with accurate data isn’t going to pony it up at the risk of getting back an equivalent number of contacts that are now on maternity leave or left four months ago to go back-packing around Argentina.
No easy answers
Smith has a simple point: If you want significant numbers of accurate records then you must be prepared to invest heavily in acquiring and maintaining them. There is no easy alternative.
Indeed, while data pooling can be useful for companies that have useful data to trade and can manage to find or create a suitable pool, it is not in any sense a solution to the data problem.
Fox at TDA concludes, Successful data pooling depends almost entirely on those contributing to the pool maintaining their data, regularly refreshing it and investing for the long term. It requires the brand to view the data as an asset rather than an overhead and this is something of a cultural shift for many organisations, both large and small.
