By Chris Lucas, D&B Sales & Marketing Solutions
Oct. 1, 2002 — Today’s economy has forced companies in many industries to examine revenue streams and identify ways to increase the bottom line. Thanks to deregulation, utilities have not been spared this challenge.
Whether a giant metropolitan supplier or a small division of large corporation, utilities today must create a sales and marketing plan that will increase revenues, while remaining within a strict and largely stagnant budget. While understanding who your customers are and how to market to them makes sense no matter what the business climate, deregulation has clearly accelerated this necessity.
One such company that was in need of better serving its customers through a successful sales and marketing plan was Tacoma Power, a mid-sized municipal utility providing electricity to 136,000 residential and 14,000 commercial accounts in Tacoma, Wash.
However, Tacoma struggled to develop a strong understanding of its customer base-the key to implementing successful sales and marketing plans-because its customer information system (CIS) was antiquated and did not provide valuable information that the company needed to drive its efforts.
Tacoma’s 20-year-old CIS provided basic billing information but did not go into detail on the type of business the customers were in, or demographic information such as number of employees or annual revenue.
To begin a marketing campaign, Tacoma first needed a cost-effective way to obtain this vital information. One option was to rebuild Tacoma’s CIS, a costly endeavor that would take several years to fully implement.
The other option was to seek help from an outside company to assist in compiling this important customer information. Tacoma chose the latter option and turned to D&B, who provided data for roughly 70 percent of Tacoma’s commercial customer list.
The data improvements included adding nearly a dozen additional data fields including such valuable information as: primary and secondary SIC (standard industrial classification) code, number of employees, company linkage information, annual revenue and key contact information.
While Tacoma now knew a good deal more about its customers than it ever had before, just having the data was only part of the equation. It was also important for Tacoma to have the correct data.
Data quality can be measured in a variety of ways: How many of your direct mail pieces make it to the intended recipient? Have you identified the appropriate contact within the right organization? Do you have the correct phone number? In short, the more rich and accurate your data, the more likely you are to reach your desired audience.
However, quality data goes far beyond whether the contact information is correct and up-to-date. It is also reflected in your ability to segment your database to identify your best prospects at any given time, for any given offer. You must be able to select different subsets of the data to ensure the information closely resembles the audience you are trying to reach.
Having an accurate phone number is obviously important, but it’s more important to have an accurate phone number for a contact who fits your criteria.
In order to ensure quality data over time, which in turn drives consistently successful sales and marketing programs, Tacoma put a customer information management (CIM) strategy in place.
CIM is designed to help companies cleanse, integrate, organize and enhance information so they can make better business decisions, optimize customer relationship management (CRM) and other data-dependent applications, and discover new business opportunities. By developing a CIM strategy, sales and marketing efforts will begin to provide the return that is necessary to stay afloat in the sea of competition.
To effectively develop a CIM strategy, you must incorporate the following six steps. By putting these steps into use, a utility company can work with a data provider to turn that tired customer information system into a useful and productive tool for increasing sales.
These six steps of CIM are:
* Analyze. Understand the quality of your data and learn more about your customers and prospects.
* Cleanse. Standardize, correct and update customer addresses using sophisticated domestic and global processes.
* Integrate. Consolidate customer records to obtain a 360-degress view of your business customers.
* Enrich. Enhance your knowledge of your customers and prospects by appending key data elements.
* Organize. Design a system to support multiple views of the customer to ensure better service and resource planning.
* Synchronize. Update and maintain customer information to ensure that your business consistently makes sound business decisions.
Working with D&B to implement a CIM strategy has allowed Tacoma to conduct marketing campaigns that in the past seemed not only out of reach, but downright impossible. In fact, Tacoma Power has been able to obtain detailed information on the majority of its commercial customers, representing 90 percent of its electricity sales.
This has allowed Tacoma to become much more strategic and targeted in its approach. It has already conducted mailings to small retailers and conservation program target customers with specific offers and services for those market segments.
As deregulation continues to be the rule rather than the exception, more and more utilities will need to follow Tacoma’s lead. The ability to increase sales and better market to your customers and potential customers could very well mean the difference between a high-voltage sales and marketing campaign or one that can’t even light a spark.
Chris Lucas is vice president of D&B Sales and Marketing Solutions. He has more than 15 years of B2B information and information technology experience and is considered an expert in the areas of customer relationship management (CRM) and customer information management (CIM). For more information on D&B, visit www.dnb.com