Despite data analytics rarely being utilsed by B2B marketers, its proponents claim that it is the marketers’ single best tool for effective campaigns. Done sensibly, it enables marketers to find out mission-critical information like which companies resemble their best customers, what is the real scale of opportunity in a given region or sector, and how they can plan balanced sales territories, says Richard Payne Gill, new business leader at D&B. The answers that analytics provide, shape not just who they market to, but also which sales channel, creative application and media outlet they use.
Yet despite this it is very rarely used by B2B marketers. Richard Bush, MD at Base One, says, The reality is that most B2B marketers don’t use analysis, let alone analytics software. It’s down to ignorance. Most of them don’t know what is available, they don’t understand what it entails and they don’t realise the potential benefits to their businesses. It is then perhaps time for B2B marketers to find out more about data analytics and to start using it to its full potential.
What is data analytics?
The term data analytics encompasses three main activities. The first is data-profiling – understanding which customers spend the most, buy most frequently, pay on time, and so on. The second is comparing your data to an external database so you can append prospect and customer data, and gain information on your performance by sector, geography and company size. Finally there is financial profiling, which uses external providers of financial data such as Equifax to determine whether a prospect is a desirable customer.
Clive Longbottom, director at analysts Quocirca, says, Increasingly, data analytics is also becoming forward-looking. For example, once a B2B marketer knows what a company or database segment has done in the past, he or she can use this information to predict what will happen in the future whether the marketing department continues to do the same thing or changes what it is doing.
Data analytics is often confused with CRM and they are indeed very closely linked. Ray Welsh, head of sales and marketing at email marketing provider Mailtrack, explains, Data analysis is a component part of CRM. Whereas the objective of analysis is finding insight, CRM involves using the insight to develop the relationships with customers. In practice, this means that once there is a hypothesis that has been agreed on, it then needs to be implemented as a rule in the marketing system or processes of that company.
For B2B marketers, the intelligence analytics helps them to make informed decisions on who to target, what with and when. It helps to segment their customers and prospects and understand their market penetration. This knowledge allows them to balance their allocation of marketing resource between different geographical and sectoral segments of the prospect database. Marketers have performed this sort of data analysis for years, more often than not relying on their gut instinct. Increasingly however, they are investing in software to help them in this area.
A question of software
David Arrowsmith, strategy manager at data analytics software provider SAS, says, Most businesses have more data than they can get to grips with. Our software helps them understand it and use it. It allows them to use facts on past results, not only to make more accurate predictions about future sales, but also to increase those sales by improving their campaigns.
Until fairly recently there was very little analytics software available, specifically designed for marketers. The few options that did exist were prohibitively expensive, so marketers had to either rely on their own judgment or if they were lucky join the long queue for the services of their inhouse analyst. D&B’s Market Insight has been on the market longest. It analyses the data in question and then benchmarks it against the D&B universe, providing intelligence about customers, prospects, market-size and market penetration. Costs start at around £6500.
Many others are joining the market. Business Objects, Cognos, Microstrategy and KXEN all provide good analysis with some data mining and their products are easy for non-technical users to grasp. SAS and SPSS offer a broad range of more sophisticated analysis tools. There are also marketing specialists such as Information Arts and Data HQ, as well as online specialists such as Unica, Omniture and WebTrends.
While it is important to pick the right software in terms of function, ease of use and of course price, it is unlikely that your choice of software will be the most important factor determining whether or not you are successful in data analytics.
According to Colin Rickard, MD of DataFlux, provider of data solutions, data analytics software is, only as effective as the data being analysed. It’s an old adage, but garbage in gives you garbage out. It is essential to deploy data-quality software that removes duplicate customer records. You should also standardise records according to business requirements and put a data governance system in place.
Increasingly, B2B marketers are expecting their data suppliers to be able to provide them with not only clean data but also with analytics expertise. Charlie Humphreys, head of Nectar for Business, comments, We hold details on around one million SME buyers and through analysing purchase data, we can provide our clients with a rich data picture of what those buyers are doing. Those clients come to us because we have both the data and the analytics capabilities.
However, as well as the right software and data, you need the right people. Bal Chauhan, MD at marketing agency, Anorak, says, The more sophisticated your database, the more important it is that you have experts to maintain the system. You need someone who understands not only the information held on your system but also your strategy and analysis. It is better to hire a person, rather than just buy an analytics solution and put it in the hands of people who don’t know what they are doing.
Hiring a full time person to run the marketing data analytics system is not an option for most companies. Iain Robertson, analysis manager at marketing agency JDA, suggests hiring an agency to do it for you. He says, Businesses often drown in data. Rather than trying to make sense of it all themselves, in the future, most businesses will seek out partners that have specialist skills to do the job. At JDA, we’re seeing the beginning of this trend and have invested in highly skilled staff to exploit this emerging market.
Yet as the technology becomes ever simpler, so it becomes increasingly feasible for marketers to operate it without the need for expensive specialists. Carol Meyers, head of marketing at Unica, provider of marketing management solutions, says that most marketers should be able to use its Affinium software without too much difficulty. It’s always better to have a full-time person dedicated to analytics and working in tandem with a software solution to crunch data and ensure it is being used to its fullest, she says. However, this isn’t always possible, so companies need to ensure that they invest in software that is both simple and effective.
With the launch in November 2006 of Horizon, its online B2B analysis tool, B2B data provider Market Location believes it offers software that fits that description. Steve Cook, MD at Market Location, says, Traditionally B2B analytics systems have been designed for analysts, and this often limited analysis to the realm of the IT department as well as removing marketers from the process. Horizon was created to meet the needs of marketing and sales personnel, placing the power of analytics and insight in the hands of the people who need it most.
Looking ahead
Lee Gisbourne, data strategy manager at business communications specialist, Marketforce Communications, believes that data analytics software needs to evolve further before it is as useful to B2B marketers as it is to their B2C colleagues. A company that supplies IT software can target new purchasers based on simple variables such as the size of a company or how many PCs it has bought in the past five years, he explains. But a B2B public relations firm may wish to win work from a number of different businesses across a diverse range of industries.
He continues, Information about other firms that match their current clients in terms of, for example, annual turnover or size of workforce, isn’t going to be all that useful to those companies. Those who conduct analysis and those who sell software in this area must therefore refine their offering so that associations drawn between clients and prospects are more intelligent as well as being based upon increasingly sophisticated variables.
Despite these reservations, it is still clear that data analytics has significant and growing potential for the B2B marketing community. Quite simply, there are few B2B marketers who cannot benefit from using historical data to inform future strategy and predictions. Yet it is really only in web analytics that B2B marketers have begun to embrace the concept to any significant extent.
As Bush at Base One points out, A website is a great place to begin to realise the potential benefits of analytics. Any self-respecting web agency that is building and managing your site will also offer analytics services to help you understand what buyers are doing on your site and what changes you need to make in order to improve the effectiveness.
He concludes, Over the coming months and years I expect to see more marketers doing this and then beginning to think about how they can apply the same principles to the rest of their marketing activity. It could revolutionise B2B marketing.