Prospect pools

If you had been at the launch of Experian’s Fusion solution some years ago, you would have discovered a hosted solution intended to deliver prospect data wrapped in a campaign management solution. You would also have encountered one of its early adopters, BSkyB, seeing an opportunity for efficiency gains in its customer acquisition marketing.

Fastforward to the present day and you can still take Fusion in that form. But if you look at how Sky’s data environment has developed, you will find a company that is profoundly data-driven, has merged prospect and customer data to gain an holistic view of its market and worked very closely with its supplier to solve complex data-driven marketing challenges. In doing so, it has moved within 300,000 customers of its 2010 target of 10 million subscribers.

While there are still many companies which have yet to consider a prospect pool, the media company provides a prime example of what it takes to get the best out of this resource. A marketing and customer management process which fully leverages data and has outcomes looped back as learnings will deliver more value than a process which just sees an opportunity to mash data owner’s ratecards.

As Colin Grieves, director of strategy at Experian Integrated Marketing, says: “Just refering to a prospect pool as a set of data for acquisition is not where clients are at the moment. That is just 50 per cent of the story. You have to think of people as consumers, whether they are customers or prospects.”

The view being promoted by his company is not about just creating list selections for acquisition campaigns. It is about bringing together a rich set of data on consumers which can help the business to achieve its goals, whether that is through making the right propositions in the right channels to prospects or understanding up-sell opportunities to customers by enhancing records with extra variables.

“It depends where companies are on the maturity curve. We are seeing less and less examples where the client has separate customer management and acquisition teams and more integration. Decision making at chief marketing officer level is across both,” he says.

Getting to that position involves a journey which many organisations are still at the early stages of taking. For data owners like EIM, it also means changes, especially the provision of consultancy advice and support around how to develop best practice.

This is where a polarisation is happening in the marketplace. It is not hard to find prospect pools offering data on all 40 million adult consumers in the UK, with depth of variables ranging from 20 to 400. “We all have the same data – it is the approach that is different,” says Grieves. “Our job as a data owner is to be in a position to deliver value – we want data to pay for itself.”

The value-add for clients in working with a new generation prospect pool provider is most likely to come from the intelligence that can be wrapped around data. Data and even campaign management tools have become a commodity, but insight and analytics still command a premium.

Can we really say somebody is a customer or not? Is it that tidy?

With the explosion of channels on offer, support for multi-channel acquisition is also a key dimension of what suppliers can provide. At the very start of the prospecting phase, when many consumers are still only suspects, this is especially valuable.

“We’re getting a lot of interest around feedback and email,” says Paul Kennedy, head of consulting at Callcredit Marketing Solutions. “If somebody has clicked through, can we measure who has opened and clicked and forecast who will convert?”

As he points out, a new sale is never achieved from a single interaction, but a series of contacts. By ensuring each of those touchpoints is connected, tracked and aligned with the marketing objective, positive outcomes can be achieved with less resource. That is what many organisations are struggling to achieve but where outsourced service providers are often well placed to deliver value.

Another shift in process has resulted from the credit crunch. “There was a time a few years back when the focus flipped between acquisition and retention. What we are seeing now is being led from the credit side of the business where prospecting is seen as being as important as retention in customer management,” says Kennedy.

Lenders have learned the hard way that bringing on new customers who end up as a bad debt is not good business. So learning more about the financial profile of a prospect before pitching to them is starting to become embedded in the acquisition marketing cycle.

Kennedy also argues that for many companies, the simplistic division of consumers into two camps is not relevant. “Can we really say somebody is a customer or not? Is it that tidy? If they have a mortgage, it is pretty clear from their payment history. But for lots of businesses with intermittent purchase cycles it is blurred,” he says.

In those types of market, having event triggers within the prospect pool is becoming an important dimension. Seeing a consumer do something that puts them in market for a product or service and getting that data within a short period of time may be the only window of opportunity to move them from prospect to customer.

For the data owners, this is creating a new set of pressures. Kennedy admits that, “where a prospect pool took five to seven days to build through data processing, you can’t make event triggers work. You have got to be capable of updating it every night. That is the basis of our proposition, Core. It is processed lights out to ensure we deliver economies of time.”

Leveraging this kind of prospect pool does require the client to have the right processes in place. There is very little point being able to identify potential buying triggers if the company can not act straightaway by getting a marketing message out to that prospect.

As the lead generation market has revealed, hot leads need to be used before they cool off. Yet many companies are still buying data designed for a more rapid turnaround than they are able to achieve. Not that this is necessarily the fault of the marketing department.

“What happens is that a marketer gets the idea and becomes excited about what they are going to do, walks into the organisation to find the chief technology officer and operations director who say, you can’t do that and it isn’t possible. The energy gets beaten out of them,” says Steven Plimsoll, vice-president, multi-channel marketing, Europe for Acxiom.

As his job title indicates, clients want to be able to leverage data in a cross-platform environment. “That is not a technical issue unless the CTO wants it to be,” warns Plimsoll. Changing internal systems can be expensive and difficult, however, which is why alternative approaches through outsourced service providers have increasing appeal in the market.

“What we are seeing in the US and Europe is growing take-up of our MarketEdge-X software-as-a-service offering. For £100,000 per year upwards with no set-up fee, you can get a single customer view with data integration and multi-channel marketing integration,” he says.

Avoiding capital expenditure has been an important factor in deciding how marketers operate in the current environment. Taking the outsourced approach does require more consultancy support. “Technology is easily available and anybody can pick up a supplier directory to get help. But a black box is only a box – you need to change the way the organisation functions,” says Plimsoll.

Getting this culture shift to happen is not just a challenge in prospecting to consumers. In the B2B market, the division between sales and marketing is often more deeply entrenched, while the benefits of a more seamless approach can be even greater.

Businesses are also more likely to be both customer and prospect at the same time, given the breadth of products and services they may be using and the number of lines of business who can be purchasing at any given time. For that reason, managing business leads the right way is essential.

“Our customers are at different places on the maturity curve,” says Stuart Wheldon, director of client services at Eloqua. “We take them on a journey and build out as they learn more and gain confidence over time. But we recommend they start simple.”

To help clients move up the curve, Eloqua has a Smart Exchange area on its website where clients can find and share best practice templates intended to increase the “time to value” of their data. One of things the company recommends is that marketing and sales departments put in place formal service level agreements and common data definitions to ensure the process is properly aligned between the two.

The CTO and operations director say, you can’t do that and it isn’t possible.

If there has been a single major driver of prospect pools as a concept, it has been an attempt by marketing to simplify the way it accesses and uses acquisition data. Especially for any high-volume direct marketing operation, the sheer logistics of data sourcing can be a challenge. While some have opted to leave it all to their agency, others want to work with more data-literate operations.

Richard Payne-Gill, commercial director at Qbase, says: “High volume users collate data from a wide variety of sources, not one, however complete it says it is. If you are one of those data suppliers, you want to be top of the hierarchy of performance and cost.”

The classic approach to data mergers has been to rank by performance (however this is scored) first and then by price. What can happen as a result is that a valuable piece of data which gets ranked lower due to a higher price is not included in the final selection. (Those data owners who accuse database bureaux of operating dark arts also believe a highly performing piece of expensive data may actually get used, but be claimed to have been matched to a less costly source.)

Payne-Gill says his company focuses on the scoring, rather than the ranking. “It is not about where data appears in the hierarchy. If it has got the right characteristics in the model, it will score relatively highly. So an item of data that might have been left out in a list hierarchy will appear higher up and is more likely to be selected,” he says.

If the real purpose of a prospect pool is to improve the performance of marketing, then this is exactly what should happen. As more organisations understand that the acquisition cycle needs to be fed with quality data, not just cheap leads, the number of prospect pools being built is growing. But don’t rule out their being used just to drive down data costs