Learning From Mistakes, Pt. 2: Big Data Analytics

In this second segment of a three-part series, PointClear President and CEO Dan McDade discusses how distributors can learn from mistakes made by early adopters of big data analytics.

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This is the second segment of a three-part series on thought leadership, titled, "3 Painful Lessons Early Adopters of Marketing Technology Learned That You Can Avoid," by Dan McDade, President and CEO of PointClear, LLC. Read part one here.

If companies ran marketing and sales the way manufacturers and distributors run their supply chain, they would see substantially higher revenue at significantly lower cost. 

Manufacturers and distributors are focused on LEAN — where every step in their processes must add value for the customer. It is no coincidence that recent issues of Industrial Distribution include multiple articles about“automating for efficiency,” “your strategy for speed,” and “improving accuracy in the supply chain.”

When it comes to marketing technology, manufacturers and distributors are falling into the same traps technology companies, as an example, fell into years ago — and for the most part still have not climbed out of. However, when it comes to marketing technology, manufacturers and distributors are falling into the same traps technology companies, as an example, fell into years ago — and for the most part still have not climbed out of.

This three-part series will help distributors learn from the mistakes of early adopters of Marketing Automation, Big Data Analytics and CRM.

Here in Part Two, the topic is Big Data Analytics. While it’s all the rage these days, big data has the potential to complicate, instead of simplify, decision making. Big data analytics investments can be massive and provide very little return on investment. At the same time, modest investments in “little data” can provide huge returns. Let me explain.

I have been a data guy for more than 30 years. I once had three Ph.D. statisticians working for me, and all they did was data analysis. We routinely analyzed data on 100,000,000 prospects before deciding to whom we’d send 5,000, 10,000, 500,000 or even several million catalog offers. Our multivariate data analytics capabilities between 1985 and 1989 were more sophisticated than most B2B companies today.

All that to say, I am not naive about the potential for big data. My concern, however, is that companies are ignoring the “little data” already in front of them.

According to a December 2013 Harvard Business Review article:

The biggest reason that investments in big data fail to pay off, though, is that most companies don’t do a good job with the information they already have. They don’t know how to manage it, analyze it in ways that enhance their understanding, and then make changes in response to new insights. Companies don’t magically develop those competencies just because they’ve invested in high-end analytics tools. They first need to learn how to use the data already embedded in their core operating systems, much the way people must master arithmetic before they tackle algebra. Until a company learns how to use data and analysis to support its operating decisions, it will not be in a position to benefit from big data.

Marketers, consider these three specific recommendations regarding little data — before even thinking about big data:

1. According to Sirius Decisions, 25 percent of the average B2B database is inaccurate, 60 percent of companies surveyed had an overall data health scale of “unreliable,” and 80 percent of companies have “risky” phone contact records.

Sobering little data! The problem with most big data clean-up exercises is the money is gone before any value is recognized. In most cases, you can derive close to 100 percent of the value of database clean-up with about 20 to 30 percent of the investment. Specifically, you should divide your entire database into homogenous groups called cubes. Next, take a small segment of each cube and clean it up. Finally, test market to the cleaned-up segments using some intuition about which should be more heavily marketed to. You will find some segments are as much as nine times more productive than others. This indicates which cubes should take priority in your marketing efforts.

2. I have always said there is no such thing as a “good list.” We use multiple lists for almost every campaign. It always amazes me that the same executive who approves spending $25 on a “lumpy mailer” fights over 25 cents per name for a list. My point here is that lists are hard. Pay attention to the little data details because bad list decisions lead to ugly databases. No matter how smart your big data strategy, it will go nowhere with bad lists and data.

3. Apply laser-like focus on metrics as leads move from suspects to prospects to customers. On average, five percent of any given B2B market (for more complex products or solutions) is sales-qualified. Most companies start and stop there. In reality, however, another five percent of the same B2B target market is what we call “pipeline” — qualified (as much as 40 percent) and will be turned over as highly qualified sales opportunities in as few as one to two additional conversations. Another 25 to 30 percent of the same B2B target market is qualified from an environment perspective, but don’t have any interest or need at the current time and should be placed in a nurturing program.

All three outcomes are valuable and reside within little data. (This includes “not qualified” outcomes because you can cut marketing expense by eliminating them from your efforts.) But don’t stop there. A “judicial branch” in your company should be in place that makes sure no lead gets lost between marketing and sales, or within sales.

I can’t stop you from being smitten by the big data orgy going on, but if I were you I would give a little love to little data first and leave the bigger stuff until next quarter — or next year.

For more on this topic download “How Relational Segmentation Techniques Help Achieve Higher Sales at Lower Costs.”


Dan McDade is President and CEO of PointClear, LLC, a prospect development firm that helps B2B companies drive revenue by nurturing leads, engaging contacts and developing prospects until they’re ready to engage with sales. The Sales Lead Management Association named McDade one of the 50 most influential people in sales lead management for the last five consecutive years. His book, The Truth About Leads, is a practical, easy-to-read guide that helps B2B companies focus their lead-generation efforts, align their sales and marketing organizations, and drive revenue. Read McDade’s blog (ViewPoint l The Truth About Lead Generation) or contact him by email at[email protected]. Follow him at @dandade on Twitter.

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