Kaushik’s 10/90 Rule applied to B2B Data

Avinash Kaushik is the leading expert on Web Analytics basics. In his book Web Analytics: An Hour a Day he describes the baseline understanding you need to build and maintain an analytics driven website. I would highly recommend the read. In one section, Avinash describes his 10/90 rule, which he has also posted on his blog, Occam’s Razor. The shorthand version is Kaushik recommends spending 10% on tools and 90% on intelligently trained people to get the most return from your analytics investments.

How else can the 10/90 rule be applied? What about B2B Data? Are you getting the most value from the lifeblood of your outbound customer acquisition strategy? Are you paying too much for leads and focusing on quantity rather than quality. I know I’ve fallen into that trap.

Data Acquisition of B2B Leads

When planning your budget for Data Acquisition, you need to consider not only your list spend, but also the analysts empowered to develop your Leads Strategy. It’s easy to buy a 10MM row list of B2B Leads. All you need is money and a list broker to sell it to you. The more mature model is to understand your customer base and only buy prospect information for companies who have a high likelihood to purchase your product.

My title was previously “Director of Marketing Analytics.” I’m reminded of this daily when vendors call and leave messages for Mark Goloboy, Director of Marketing Analytics. My contact information was gathered from website and magazine subscriptions, webinars attended, and likely my LinkedIn profile. I’m on Jigsaw, Pipl, and ZoomInfo. Those companies gather and sell your data. That’s what they do. If you’re reading this, you are likely on several large aggregated lists that are built from dozens of smaller niche lists. I would recommend googling yourself and opting out of any services that look like aggregators, unless you enjoy hearing vendors’ sales pitches.

But wait. I buy list data. And you don’t want to hear from me just like I didn’t want to hear from you. And therein lies the problem. A vast majority of the leads you can purchase don’t want what you’re selling. No matter how good your sales people are, most of the leads you can provide them will never be sold. So how can you improve results? You need to understand your customer base through analytics, develop patterns of purchasing customers, and only buy those leads who have a high likelihood to purchase from you. That’s easy to say in two sentences, but it requires business analysts with deep understanding of your company and industry, statisticians who know your customer data and can transform it into insightful scoring analyses, and sales and marketing strategists who know how to work with your front line sales people and deliver complimentary messages to your customers.

The 10/90 Rule Applied

So to avoid overpaying for unfiltered B2B lists, you need to follow Kaushik’s rule. If you’re planning to pay $10 for data then you need to assume $90 worth of analytic commitment. That needs to be applied at four different stages.

1) You need to commit to analytics before the list purchase to determine which prospects are likely to become customers. Then you can avoid buying full data sets and instead buy targeted niche lists. Also at this stage you should develop program revenue projections and determine if the list is worth the purchase price. If not. Don’t buy it! Spend the money elsewhere.

2) Once you have the list in house, you need to score it based on previous buying patterns, filter out any existing customers, and prepare the list for distribution to your sales teams.

3) During the program you need to analyze results quickly and course correct if the campaign is not producing results.

4) Following the program you should analyze what worked and what didn’t. Did your models and projections hold up? What was the actual ROI? Was it better for some segments? All of these questions need to drive future programs.

And don’t forget…

Throughout the process, your analysts need to coordinate with Marketing and Sales leaders, CRM and SFA systems owners, and financial strategists to align with other programs and schedules. Following the process communicate with all constituents. Let them know where you’ve had success, and MORE IMPORTANTLY let them know where you can do better. You build credibility if you point out areas of improvement and show the ability to mature your programs.