Having a CRM system doesn’t automatically mean you also have a marketing database. Despite what many marketers think, they are not one and the same.
Chief Marketer recently talked with John Coe, president of Sales & Marketing Institute, and Jim Wheaton, co-founder of Wheaton Group, about why it is essential for B-to-B marketers to have both a CRM system and a proper marketing database. Coe and Wheaton recently launched a new co-venture, B2BMarketing.com, specializing in business-to-business data driven marketing.
CHIEF MARKETER: What’s the danger of thinking that your CRM system is a marketing database?
JOHN COE: CRM basically grew out of salesmen wanting to put their information into a repository on their computers, and as these systems evolved, companies looked at them as a database. One of the trends I’m seeing is that people are beginning to realize the CRM system is not their database. It has a lot of data in it, and it supports sales, but it’s not a full-fledged operational system.
JIM WHEATON: To have a true marketing database, you want to start at the account level, and then look at the individual site and address, and then roll that up to the organizational umbrella level. All the data and linkages have to be complete and stay accurate and sound over time, as well as back in history. Otherwise, you can’t do the analytics that are necessary.
CM: Can you give me an example of this in action?
COE: When I was with IBM, we took the approach that the marketing database should be holistic in its view of the entire market. A CRM system is only a reactional database of activities that customers have engaged in, either at a trade show or during a sales call or somewhere else in the lead generation process. But it doesn’t include the entire marketplace. At IBM we needed the entire industry described, so we imported [information], because you couldn’t really do analytics and penetration studies unless you had a full-fledged database.
WHEATON: At the Wheaton Group, we’ve been working with Excelligence Learning Corp., a growing B-to-B company that sells supplies to elementary schools and day care chains. They’ve got sales representatives, they’ve got telemarketing, they’ve got a huge catalog/ecommerce program. We’ve been able to go in and look at specialized data sources and create the skeleton of [the market] and lists of teachers at specific prospect sites. The educational B-to-B market is huge. There’s your classic application of database marketing.
COE: One client we worked with last year makes steel buildings, like airplane hangars, and has been in business almost 40 years. All they had in their CRM system was the names their salespeople called on, so they had never brought into their database the entire scope of the market. Their CRM system was reactionary, and they never had an idea of their market share and who they should be targeting.
CM: Why do you think companies chose to accept the limits of their CRM systems, and not embrace the wider scope of database marketing? And why is that finally changing?
COE: History offers a good view here. In a lot of companies people weren’t quite sure what marketing did. Salespeople slowly began implementing CRM, but the attitude was, “No, I can’t put that information into a CRM system because, if I leave the company, I don’t want them to know who I’ve been calling on.”
Marketing used to be in the basement next to the boiler room, but now maybe they’re even next to the executive suite. Thanks to trade media, live events and the Internet, companies are drowning in data and it is just too much for their CRM systems. It’s evolutionary—data sources are, quite frankly, much better than in the past.
WHEATON: People have all this great data, but they really haven’t put it all together, and they just don’t know what a true marketing database can do.
COE: Right. And no matter how good your data is, it is always in flux. You have to be vigilant in terms of your data hygiene, particularly on the contact level. People leave companies, and they shift within [their existing companies], and new data sources can keep the contact level data accurate.