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DIRECT: From which industries are you seeing the most interest from mom-and-pops?

KHANNA: There's B-to-B. A lot of small businesses provide services to other businesses.

CONNOLLY: We've found it beneficial to identify home business owners on the consumer side. Linking those together gives you firmograpahics and demographics about that small owner.

DIRECT: You've mentioned that you're getting more granular. Yet most of you offer some sort of clustering analysis. Are both still equally important?

CONNOLLY: They actually go together. Sure, you want the more granular level — transaction data — that will allow you to tell what people are doing. Then you can use that to generate models. And granular data can help when you're dealing with a client file. You can use it to model data parts that don't match.

KHANNA: Part of it is also transitioning from a total clustering mentality to being able to use individual lifestyle indicators. It will take time, because historically there hasn't been good coverage. Previously, if you wanted to target golfers, you'd be going after a particular cluster. But a 30-year-old golfer with a certain income is a different buyer from a 60-year-old golfer with the same income.

BOWMAN: Clustering systems are a beginning framework for managing your view of a customer relationship. But you need to get granular to execute. This is something that's difficult to explain to marketers. When you use a clustering nickname with associated behaviors, it provides a common language for talking about a profile of a particular segment. But you've got to get other data to slice those clusters a little bit thinner.

KOWALSKI: It used to be that we could just take and label everybody over 65 as a senior. But now you've got clusters within that group. For example, you can't just call somebody a boomer now and know what their attributes are going to be. Are they an aging boomer, are they an emerging boomer? Are they a boomer who has extra money to spend? You've got to take all that stuff and make clusters within that.

BOWMAN: A best practice with clustering systems is to use them in conjunction with customer models. Off-the-shelf segmentation can be overlaid to dig deeper into low-performing deciles.

DIRECT: What are the challenges in business-to-business compiling?

KHANNA: Historically, you could compile B-to-B information from the yellow pages and then verify it by phone every year. We've used a multisourced approach for five years to prepare for shrinkage in yellow pages coverage. To give you some sense of metrics, a few years ago we noticed a slight drop in our physicians' coverage. It fell to about slightly over 500,000, where historically it had been 650,000. Yellow pages advertisers are realizing that if they're going to be fiftieth in a category, maybe they don't want to advertise there. So we've added a lot more sources to our business file and our phone-calling process now is really for both verification and research. Five years ago, we'd barely do about 15 million phone calls annually to verify the database; last year we made 25 million calls. To some extent it's becoming like consumer data.

ROVELSTAD: We're seeing more people applying techniques they've used on the consumer side to the business side. They're creating business-like clusters as well as using traditional modeling within the set of available selection items.

KOWALSKI: Our B-to-B customers are using a push/pull strategy in the healthcare market. They're not only marketing on the consumer side but to physicians as well.

CONNOLLY: Much of our focus is on smaller businesses. We apply analytics to business files too, and that's going to happen more and more. You'll need to have more sources and verification. And you'll have to do more segmentation, modeling and firmographics.

BOWMAN: What we're seeing from clients is a blurring of the consumer and business worlds, linking consumers to where they work and vice versa.

KHANNA: The Internet is an interesting way for businesses to give us information. They can say, ‘Hey, I'm not being listed on many of the search engines. Can you make sure my business is there?’ They give us that information, and we'll research it and phone-verify it to complete that record and provide it to our partners. It's becoming an important way for us to validate our information and get the coverage. Small businesses want to be sure they're included in directories because that's a way for them to get customers. As for firmographics, one key variable is the number of employees. With that you can judge the size of the business.

DIRECT: We've covered almost everything. What else is new and interesting?

KHANNA: Photographs of businesses. We're taking them. If you have a particular destination, a search engine can give you the routing to find it and also show what the area looks like. We're taking both wide-angle photos of the buildings as well as close-ups of the entrances. On the consumer side, it's lifestyle and behaviors. Our strategy is to collect that information through the companies we've acquired in the mailing list brokerage and management space.

GREENBAUM: For my niche market, it's the cell phones and VoIP, and not so much because of the actual phone numbers themselves. New households are springing up with cell phones and [no land lines], so we're not getting an actual address, we're not getting a listing anywhere. Combine that with the loss of the NCOA files, and [it's hard] to tell if people are moving. If someone has a cell-phone family plan with five or six members and you can only identify one member of the household, that makes it a challenge to integrate information about that household into your database.

CONNOLLY: Land lines are dropping at 4% or 5% a year and the do-not-call list restricts who we can call. [It's a problem] because for years the telephone was key to us [being able to maintain] up-to-date or renewable data.

ROVELSTAD: Something we're seeing in its infancy is that quite a few of our printer customers are trying to match trigger information with variable-data print solutions.

KOWALSKI: Customers are asking for transaction data, not so much for the transaction but for the fact that it shows a person is at an address at a certain time. And that's probably a function of public-record information being restricted. Activity at an address can help you verify if a person has or hasn't moved.

BOWMAN: From a compiling perspective, we [need to consider our] relationships with consumers. Much like the credit bureaus have had to become transparent to consumers, giving them access to their own data — and they're actually making a lot of money providing access to the data — I think our industry needs to focus on doing that. We need to understand how we can fortify our relationships with consumers, show them direct marketing's value proposition and make our data assets better.

PARTICIPANTS:

LYNN ROVELSTAD
President, AccuData Integrated Marketing

RICHARD H. LEVEY
Senior writer, Direct (moderator)

DEREK BOWMAN
Product leader, Acxiom

AMIT KHANNA
President, database compilation, InfoUSA

CASEY J. KOWALSKI
Director of data acquisition, KnowledgeBase Marketing

JULIE A. GREENBAUM
Vice president for sales, HomeData