Mining Data To Create a Marketing Campaign
For Dialpad, a Santa Clara, California-based Web telephony service, harnessing the information generated by over 12 million worldwide users was a necessary and daunting task. There was a wealth of useful information in its database that increased by 12 gigabytes daily. "It was clear that we needed demographic statistics," says Christina Pate, manager market research.
But the firm did not have the capability to analyze the data or generate automated reports. It ordered ad hoc queries, then manually translated the results into spreadsheets or presentations. "We were doing nothing regarding demographics," says Pate.
The time element was a big factor for a new, dynamic industry with a limited demographic track record. Pate estimates it would have taken Dialpad at least six months to a year to reach the level of data analysis and presentation it needed. And it would have had to add full-time staff to do the work or spend scarce capital on hardware or software.
Speed to market was also an issue. With the industry's rapidly evolving business strategies, time was of the essence. Dialpad had to harvest the needed information locked in its voluminous database ASAP.
Digging For Gold
Outsourcing was the solution that produced savings in two valuable commodities - time and money. Dialpad selected digiMine of Bellevue, Washington, in May 2000 to provide the needed expertise in the analytic service known as data mining. digiMine corporate communication manager Joel Sider explains that "data mining applies mathematics to large sets of data to reveal unknown or hidden patterns and relationships."
Data mining delves into three areas. Segmentation breaks down a database into groups based upon behaviors or demographics. Another is affinity. These are combinations or relationships with two or more things such as related products or Web pages. The third is predictive data mining. These determine trends over time that companies can use for projections.
"Many people are overwhelmed with the amount of data generated in the Web environment. We take very large amounts of data, divide it into groups and segments so our clients can leverage it for intelligent decision-making," says John Samuel, digiMine vice president of marketing and product planning.
Reaping The Harvest
The outsourcing solution was quick. Samuel says digiMine deployed a data warehouse, analyzed the data and had reports ready for Dialpad "in less than a week." These reports included a wide variety of data analysis on customers, marketing, transactions and product information. Pate adds, "digiMine generated reports for us as soon as we sent them the log files."
digiMine assimilates the data and then translates it into reports when requested or automatically delivers those reports as scheduled. Samuel explains that the reports provide the information in a very interactive way. "The whole idea is for users to be able to ask questions and find the information that they need. Much of this is just point and click," says Samuel. Customer support is readily available, he adds.
While digiMine's program must be simple for beginners, it has to have sophisticated options for its power users. The outsourcing supplier allows this user group to create custom views as well as configure questions using their own variables.
Pate says the digiMine reports are so inclusive they have become the company's "only regular source of data on its Web site activity." Almost all of digiMine's reports are now broken down by product. Dialpad executives receive daily reports at the beginning of the next working day. Each report has several query options, so different users can customize the reports. "This speeds up the generation of internal and external presentations considerably," says the Dialpad executive.
Dialpad uses digiMine's reports to integrate all aspects of its Web site activity into Dialpad's business planning. "They help us think about what kind of customers we have. We can now analyze our call data," say Pate. The information allows Dialpad's marketing department to track the usage of its help pages, particularly the "Frequently Asked Questions" or FAQs. The company is also using digiMine's customized call reports to identify light, medium and heavy callers for internal marketing campaigns.
With this information in mind, Dialpad launched pay services in April 2001. At the same time there was a decline in the online advertising industry. Dialpad shifted focus to accommodate the change in the marketplace. Now it is interested in funnel and conversion data, for example. "digiMine was right there with us," says Pate.
Dialpad has also used digiMine to identify "cliffs" on its Web site. This is a place where the company loses customers, which can be in the registration or purchase process. "We are learning about these customers. digiMine reports help us understand them and what their behavior is," says Pate. Dialpad has used this understand to implement improvements in response.
Uncovering valuable information was an eye opener, according to Pate. "The extent of the international interest in our Web site from early on was a revelation," she says. digiMine's geographic analysis helped identify the top countries where Dialpad had users and potential customers. For example, Peru and Colombia were among the top five countries hitting the site. This knowledge prompted the company to launch Spanish language marketing campaigns and translate parts of its Web site into Spanish.
Pate says she cannot overestimate the advantage of having a supplier perform the company's data mining. "With changing priorities and workloads, an outsourced solution like digiMine remains constant. Those reports have improved our speed in recognizing both trends to exploit and problems to address. This has contributed to our understanding of our market and our ability to respond to it effectively. We have been able to focus scarce resources on growing our core business, which is telecommunications, not data analysis," she concludes.
Lessons from the Outsourcing Primer:
- Companies trying to compete in the new economy can outsource to an experienced supplier offering a solution with proven technology.
- Outsourcing cuts time to deployment.
- Outsourcing saves upfront development and capital investment costs in a crucial but non-core process.
- Knowledge of your customer base is crucial. An experienced outsourcing supplier can help you mine your data to take advantage of hidden trends
- Data mining allows you to solve problems early on.