DATA

ENHANCEMENT

HOW-TO GUIDE
 Data Enhancement
HOW-TO GUIDE

Marketing has changed radically in the past two decades. Instead of blasting messages to
anonymous consumers of mass media, marketers increasingly manage direct interactions with
known individuals. This change presents a huge opportunity to improve the effectiveness of
marketing messages by tailoring each message to the person who will receive it. But it also means
that marketers who fail to accurately target their communications increasingly risk being ignored
by consumers who react only to relevant content.

Simply put, individualized customer treatments are quickly changing from competitive advan-
tage to baseline requirement. Marketers no longer have a choice about whether to do them,
although they still control how well they are done.

The foundation of effective targeting is customer data. Data drives the rules that determine who
gets what treatment at what time. Other resources are also needed, including analytics to under-
stand the data and execution systems capable of managing the interactions. But without adequate
data, these other resources are like an actor without a script: they may look great, but they don’t
know what to say.

Most customer data is generated within the company itself, including contact information,
response history, purchases, and customer service interactions. However, other important infor-
mation exists outside the company. This includes personal or business details that the customer
has not provided directly, as well as behaviors such as social media comments or visits to other
companies’ Web sites.

This information provides insights used to target communications based on each customer’s
long-term needs and immediate interests. External data is most helpful for prospects and new
customers, who have generated little or no data within company systems.

This guide describes the kinds of external data available to marketers, how they can acquire this
data, and how they can put it to best use. It will help you to improve the effectiveness of your
marketing programs by expanding the base of information available for segmentation, targeting,
and analysis.

Let’s get started.

2 DATA ENHANCEMENT HOW-TO GUIDE

What’s Available
Enhancement data falls into two broad categories:

Attributes – Provide information that is more or less constant, such as birthdate for individuals
and industry for businesses. Attributes that are stable in the short term but may change over
time include marital status, household income, home value, company revenue, personal or
business address, and employee job title.

This type of information has long been available from traditional marketing data sources such
as list compilers and directories. It is often based on a combination of sources, including public
records, surveys, loyalty programs, and census data. Some of the information is originally
provided for specific individuals, while other information, such as geo-demographic cluster
codes based on census data, is inferred from geography. Attributes are now also gathered by
scanning public Web sites and social media profiles.

Behaviors – Provide information that changes constantly. Catalog purchases and recent
address changes are examples of behavioral data that have long been available. Digital inter-
actions have recently provided a new and richer source of behaviors, including search terms,
Web sites visited, products considered but not purchased, emails opened, blog post topics,
physical location, and social media comments or recommendations. Although digital inter-
actions are all based on the actions of individuals, the identity is not always known: it could be
an anonymous Web site visitor linked only to a cookie or corporate Internet address.

By their nature, behaviors reflect current interests, so their relevance decays much more
rapidly than attributes. But behaviors are often extremely predictive of important states,
such as actively shopping for a particular product. This can make them more valuable than
most attribute data during the period the behaviors remain accurate.

Changes in attributes can also signal major business opportunities. Technical data gleaned during
Web interactions can provide information on, for example, a consumer who is moving to a new
home getting married, or on a business that is launching a new product or hiring new managers.

3 DATA ENHANCEMENT HOW-TO GUIDE

Linking With Customers
Most companies find it hard to link their internal data relating to each customer, so it’s no
surprise that linking external data is also a challenge. However, the vendors providing external
data typically include linking as part of their service, so marketers can usually rely on them for
help. The nature of the linking depends in part on the type of data, such as

Mailing addresses are typically linked through “fuzzy” matches that find similarities between
the name and address in the company’s customer file and the name and address provided by
the vendor. Both sets of data are first run through standardization routines that correct obvious
input errors and place them into consistent formats. The matching process itself typically can
overcome slight variations in spelling, missing words, or word order. Matching rules are often
very elaborate and may be different for different countries, languages, or ethnicities. Some
vendors also apply address change and name change files so they can link records for the
same person at two locations or before and after marriage.

Multiple identifiers may be provided directly to the company by the customer, such as
address, telephone number, and email entered while placing an order or setting up an account.
Any external data that provides one of those identifiers can then be linked to the master profile
record. If the external data includes previously unknown identifiers, such as a second phone
number, then this is added to the master record and becomes available to build additional
linkages. Fuzzy matching may further expand the set of identifiers linked to one master record,
although care is needed to avoid false matches.

Identifiers may be provided by indirect permission, such as accepting a social network rela-
tionship that lets the company access the customer’s full profile on that network. These profiles
often contain identifiers that the customer hasn’t provided directly, such as a secondary email
address or employer. “Social sign-in” programs, where customers use their social network
credentials to sign into accounts at other companies, are a particularly good method of gaining
access to social profiles.

Linkages may be inferred from usage across multiple devices, such as signing into an account
from different computers, smart phones, or tablets. All of those devices can then be associated
with the same individual and added to the master record. This is a particularly useful approach
for linking cookies on different devices to the same person.

4 DATA ENHANCEMENT HOW-TO GUIDE

 Identifiers may be purchased from vendors who specialize in providing them, for example by
appending an email address or phone number to a known mailing address. Government regu-
lations, company policies, and consumer attitudes towards privacy impose some constraints on
this type of matching. Government rules in particular vary by country. But, where permitted, this
sort of matching can expand the set of identifiers on the master record and may let marketers
deliver targeted messages to known customers in new channels.

Identifiers may link customers to anonymous audiences without explicitly revealing their
identities. This happens on Web advertising networks, which maintain lists of cookies asso-
ciated with specified behaviors, such as visiting a particular Web site or showing interest
in a particular type of product. These cookies are not linked to a specific individual using
personally identifiable information (PII) such as name or address. In some cases, the network
can associate its own cookies with cookies the marketer’s company has linked to its own
customers. This allows the ad network to deliver targeted advertising without knowing which
individual is associated with each cookie.

The mechanics of the linking process are generally similar across all linking techniques. First, the
marketer’s company sends a list of customer identifiers (name, address, phone number, email,
etc.) to the data vendor. The vendor then finds matches with its own files. Finally, the vendor
returns the original customer list with additional data appended.

This approach avoids the enhancement vendor having to share information on unmatched
customers and limits the data that the company must share with the vendor. Sometimes the
matching is done by a “trusted third party” so neither participant shares its customer identifiers
with the other. This matching may be done in a periodic process involving a batch of customer
records, or it may be done on demand for a one customer record at a time.

Because different enhancement data may be matched on different identifiers, it’s still up to the
marketer’s company to build the master record that holds all identifiers linked to each individual
and links that individual to the enhancement data from all different sources. When the same data
element comes from multiple sources, the company system also typically decides which value to
use if the sources provide different answers.

5 DATA ENHANCEMENT HOW-TO GUIDE

Using the Data
It’s great that all this new data is available, but you still need a reason to assemble it. Marketers must
have specific uses in mind before they make the necessary investments. Typical applications include

Identifying opportunities – Behaviors are a particularly powerful tool for identifying oppor-
tunities for new sales, among both prospects and existing customers. Key behaviors include
Web searches for relevant terms, visits to relevant Web sites, and downloading relevant
content. Attributes are generally less useful, although attribute changes such as a new
address or product launch can be significant. When behaviors identify a prospect who is not
already a customer, for the information to be useful the data vendor must also provide a way
for the company to contact them.
Assigning segments and personas – Most marketers divide their customers and prospects
into multiple segments and personas, each having different needs, responding to different
treatments, and presenting different potential values. These distinctions are based primarily
on static attributes such as income, life stage, industry, job title, and location. Because the
attributes are often used to customize Web treatments, marketers often want to identify
them immediately when a new visitor reaches their Web site. Some, but not all, enhance-
ment vendors can do this by using identifiers such as the visitor’s corporate Web address or
existing cookies on their browser.
Tracking customer life stages – Behaviors such as email clicks and Web pages viewed are
good measures of engagement and a customer’s specific stage in the buying cycle. Many of
these behaviors involve the company’s own Web site and email, where external data is not
needed. But information on what a prospect is doing on other Web sites and social media
gives a more complete picture of what’s on their mind.
Selecting offers – Perhaps the most important application for external data is targeting offers
based on the combination of attributes and behaviors. Attributes help determine which prod-
ucts a customer might want, the most suitable price and service levels, and what types of
messages they would best respond to. Behaviors can help marketers refine those selections,
react to specific events, and take advantage of new opportunities. They may also be used
as content in personalized messages, although it can be dangerous to show customers you
know things about them that they didn’t tell you directly.

Finding advocates and detractors – External behaviors are especially useful in finding
customers who are active participants in social media and, thus, potentially powerful advo-
cates if they’re happy or detractors if they’re dissatisfied. This enables marketers to focus
outreach on the most productive targets. Social messages can also identify specific issues
that represent strengths or weaknesses and can identify customers who might be at risk of
taking their business elsewhere.

6 DATA ENHANCEMENT HOW-TO GUIDE

When Data Enhancement Makes Sense
Data enhancement isn’t necessarily for everyone. Costs are substantial for the data itself and for
an infrastructure that can use it effectively. Consider external data enhancement if

You’re selling to high value customers – External data can increase the value you receive from
prospects and existing customers, but it won’t be worth the investment if each customer adds
little profit to begin with. Industries with high customer value include financial services, retail,
travel, telecommunications, technology, and manufacturing. Lower customer value industries
include consumer packaged goods, restaurants, and utilities.

Targeting and differentiated treatment make sense – External data is used primarily to guide
differentiated treatments for individual customers. If your customers all have the same needs
and generate the same value, you’ll probably treat them the same regardless of what much you
know about them. In that case, you’d gain little return from adding external data.

You can interact with customers directly – You must be able to act on the knowledge that
external data provides. This means you need to be in an industry that can identify its customers
as it interacts with them, your company must have the systems and processes to execute person-
alized interactions and those systems must be able to integrate and apply the external data

External data adds value – The information provided by external data must actually make a
difference. This means that treatments using the data must generate more value than treat-
ments selected without the data. It assumes the external data contains significant information
that would otherwise not be available. This is most likely the case with prospects and new
customers, for whom little internal data is available. It may also be true if the external data
captures substantially different information from internal systems.

Bottom Line
Marketing today is increasingly driven by data and some of the most useful data is outside of your
company. Taking advantage of this data requires adequate systems to manage it and creative
marketing programs use it effectively. Follow a careful process to ensure that you acquire the right
data, have the tools to deploy it, and can measure your results.
Used correctly, external data can be an important tool in your company’s struggle to capture
the business of current and future customers.

7 DATA ENHANCEMENT HOW-TO GUIDE

 Action Plan
STEP 1 - Identify Use Cases

Identify Use The Balance of Cost and

1 Cases Benefit

Define specific marketing

Define the Data
programs that would benefit
2 You’ll Need
from external data. Identify the
specific data they would use and
the systems that would deliver
the programs.

Check Your Then make sure the data you

3 Infrastructure want is actually available and
your systems could use it as
intended.

Finally, estimate the value that

Assess the those programs might create
4 Available Data and compare it to estimated
costs. Neither estimate will be
very accurate at this stage, but
you want to confirm that there is
a reasonable balance between
Build a
5 Business Case
cost and benefit.

Deploy,
6 Measure and
Expand

8 DATA ENHANCEMENT HOW-TO GUIDE

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