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Building an Information Warehouse

Do you know who your customers are? Do you know where they are? Would you know if one or more fell out of your portfolio? Can your company focus its resources on its best opportunities?

Corporations collect and process vast amounts of data all the time. Yet, few of them make good use of that data. Is your company data rich, yet information poor? In recent years, savvy companies have begun to aggregate their data, refine it and create valuable information warehouses that can be used to accomplish all of the following:

  • Retain existing customers.
  • Grow existing customers.
  • Attain new customers.

Integrating information that already exists in company databases can give it context and structure that marketing and sales personnel can use to manage and improve customer relationships. Surprisingly, relatively few companies that have attempted to build information warehouses have been successful. Why? Most often, it’s a matter of not capturing, interpreting or understanding the business intelligence present in the simple data. In cases where the information is successfully captured, companies are often unwilling or unable to act on what they have uncovered.

When structured properly, however, the information warehouses can dramatically improve the efficiency and profitability of sales organizations. Even relatively simple procedures, such as database rationalization, can yield impressive dividends.

For example, a leading national truck leasing operation with 2.9 million account numbers discovered through rationalization that it actually had only 133,000 customers. Of those customers, a surprisingly high percentage were listed in the furniture business. Armed with this information, the company had the ability to grow its business by developing short- and long-term leases tailored specifically for the furniture industry.

In addition, a leading manufacturer of telecommunications equipment was able to save $6 million in postage alone by aligning, rationalizing and cleaning its mailing lists. One of the world’s leading computer manufacturers revamped its entire sales structure after its information warehouse unearthed numerous sales channel conflicts. By reviewing and reorganizing its sales channels, the company was able to provide its customers greater value while improving its own profitability.

So, how do companies turn massive quantities of seemingly disparate legacy data in disparate structures and forms into intelligent and actionable information? Here are 10 steps to building a successful and profitable information warehouse:

  1. Focus on the three key business issues: retention, growth and new business.

    Of the three, client retention and growth of existing customer relationships are paramount. A 5 percent increase in customer retention typically leads to a 25 to 100 percent increase in profitability. Meanwhile, selling to a new customer is six to 13 times more expensive than selling to an existing customer.

    Typically, companies that use information warehouses for customer relationship management discover that the 90/10 rule applies to them – that is, 90 percent of their business comes from just 10 percent of their customers. For many, it’s a revelation. Smart companies act on the information by refocusing their attention on their major accounts while reducing support for unproductive accounts.

    After building its own information warehouse, a well-known maker of fine papers found that not only did the 90/10 hold true, but that 55 percent of its accounts were unprofitable. The company’s own information demonstrated that more customers don’t necessarily mean higher profits. Management culled unproductive accounts and was rewarded with near-instant profitability improvement.

  2. Identify and define data that will give you the answers.

    Before doing anything, determine what business problems you are trying solve. For example, are you trying to grow revenue through identifying and holding onto existing customers? Or, are you trying to understand the makeup of your customer base and how it relates to the market? Both questions require business information management processes. Don’t bother building an information warehouse unless you have viable data to use. For an information warehouse to provide value, it requires data that enables users to view information from different perspectives.

    A national office supply chain offers a good example. A series of southeast regional sales managers had been fired for failing to make their numbers. The newly appointed southeast sales manager engaged help to build an information warehouse in an effort to identify the problem. Using information that already existed in the company’s computer files, it became apparent that there was a dramatic disparity in sales opportunity. Though the southeast region had the same quotas as other regions, an analysis found there was only one-sixth the actual sales potential with that region. By looking at the problem from a different angle, the company better understood its business and acted on it.

  3. Build and maintain your data.

    Data by itself is of little use. When data is structured or transformed in certain ways it can be used answer questions. But even when shaped in the proper framework, data is useless unless accurate. One of the oldest rules in computer science – "garbage in, garbage out" – applies more than ever. Data must be accurate, timely and complete. Even when completely accurate, data decays at a rate of 2.5 to 3.5 percent per month.

    On the other hand, loading too much data can also be self-defeating, as it is expensive and time-consuming. Information may be outdated by the time it is entered. Databases must be actionable within relevant time frames.

  4. Identify a limited group to help refine the process and support the project through the growing pains.

    Gain buy-in for your information warehouse from the top. As is the case with any project, an information warehouse needs the support of senior management to succeed. Take care to include a wide range of talents in your development team. Like oil and water, technologists and marketing specialists traditionally don’t mix. Technologists want clearly defined objectives. Marketers, on the other hand, work intuitively with ill-defined objectives. When "shaken" together, however, their talents can generate a greater whole of valuable information that is easy to access and apply across all business units. Foremost, the project manager should have a appreciation of the value of good business information.

  5. Design the system to scale.

    Determine the size of the community to be served and then ensure you will be able to support it. Once word gets around that your system works, expect rapidly growing demand. Nothing succeeds like success.

  6. Test the system manually before investing in technology.

    The data is the number one priority; technology is a distant second. Before you put any technology together, check the viability of what you are trying to determine by testing it manually, then apply those business rules learned and set it up before the technology is implemented.

  7. Manage the expectations of users.

    Be clear about what your information warehouse will and will not do before building. Information warehouses must be able to scale both in the number of users and capacity to store the necessary data.

  8. Build the application.

    Use companies with experience. Hire people experienced in developing information warehouses. Again, technology is a secondary consideration. Successful information warehouses are those in which the marketers have specified the scope of their business issues and the technologists understand the questions and how to gather and organize the data.

  9. Test the application.

    Be ready for some teething troubles and outrageously ridiculous outcomes at first. Here’s where step number four pays off. It will be the team of technologists and marketers that will perfect and develop value for the application.

  10. Roll it out and act on information.

    Insurance companies are examples of companies that act on the information they gather. They collect vast amounts of data about their customers, keep careful track of the marketplace and then act – either by lowering premiums, increasing benefits or developing entirely new products.

Most important of all, use the information. Remember the information warehouse imperative: D I D B. That is, a change in the information requires a change in the way you do business. So, if the data shows your company should concentrate on your most profitable customers, then do so. If the data shows your company has misperceptions about your customers, then change them.

Encourage people to use your information warehouse. Demonstrate return on investment – both short term and long term – for continued support. Finally, bask in the glory. You may become extremely popular with the marketing and sales people.


Sandy Stoker is vice president of information marketing for Dun & Bradstreet, US. She is responsible for defining the data needs and standards for the company’s U.S. operations. The majority of Sandy's 17 years with D&B has been spent in the information resources unit, where she was responsible for managing the marketing database (DMI), the corporate affiliations file and more than 30 other niche files. She has been responsible for the D&B file-building process, managing Yellow Page compilation and use of third-party and public files for new business identification. She also managed Worldbase, D&B's global database of over 53 million businesses. Sandy joined marketing last year to establish the information marketing group.

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