Using Data for the Long Term

More than a day-to-day scorecard, your data plays an essential role in strategic business evolution.

Much of what I read (and write) regarding customer data focuses on using data to optimize/improve ongoing online marketing activities, such as campaign performance. How did my campaigns perform yesterday? What was my shopping cart abandon rate? We use our data as a benchmark or scorecard of sorts on a day-to-day basis.

A less-discussed aspect of analyzing customer data is its longer-term value in making higher-level business decisions regarding new product ideas, pricing and packaging opportunities, even new target markets. From that perspective, I chose a former employer, KnowX.com, as a case study.

KnowX began as the online arm of a public records service for attorneys. A huge market existed, comprising sole practitioners and small law firms. But it was impractical to reach them using a traditional sales approach, which entailed a personal visit with the law librarian at each firm. Instead, these small firms sent staffers to the courthouse to manually search the records.

In 1996, with the Internet rapidly gaining adoption, KnowX was conceived as an efficient way to capture the small law firm market by enabling Internet access to public records, billed to a credit card rather than the traditional monthly invoice.

From the beginning, KnowX relied on data to help make decisions, small and large. Prelaunch research helped determine the products and price points that would appeal most to the small law firms. As this was a new marketplace for public records, postlaunch data was critical to determine where adjustments were needed to appeal to this previously underserved market.

KnowX planned data-capturing every step of the way as it planned for the launch. As expected, some tweaks were needed. Behavioral data, survey results, and purchase trends revealed pricing had to change in a few areas to appeal to these small firms.

Because of KnowX’s early commitment to data collection and analysis, I checked in with Jane Rafeedie, vice president and general manager, to see how the business has progressed and what role, if any, customer data played in that progress.

Says Rafeedie, “We use our data for all the usual purposes. Tweaking our site, testing new campaigns, prices, products. But several times, our data has really helped us identify and enter new markets, to take larger leaps forward. It started with the consumer market.”

KnowX knew from day one consumers were hitting the site. But consumers weren’t a viable market at the time because the expectation was all Web content should be free. Consumers would need plenty of hand-holding to understand public records. They’d have to be convinced they needed the data. Too many obstacles; not enough demand.

Over time, consumers became more comfortable with the concept of purchasing over the Internet, and things began to change for KnowX. The company merged with ChoicePoint, an information services company.

“Our site was completely geared towards experienced public record users,” says Rafeedie. “But our data showed that consumers were starting to make purchases. They were educating themselves about our data, regardless of our legal-market focus. So we started talking to them.

“They were using public records to locate long-lost friends and family members, and we came to understand that these folks were turning to KnowX only after exhausting the Web’s free resources first. It eventually led to a lot of publicity for us because before the Internet came along, consumers really had no practical way to locate people.”

Again, KnowX was dealing with an unknown, never-before-served market for public records. And again, it used its customer data to navigate the complex process of fine-tuning an initial product offering and pricing.

Monitoring registration rates in response to varying product descriptions helped pinpoint the right method for presenting public records to consumers. Testing and measuring the impact of different price points helped strike a balance between consumers’ “everything for free” expectation and KnowX’s desire to make a profit. Because the two markets’ behavior and needs were so different, the home page was changed to funnel consumer traffic in one direction and attorney traffic in another.

In the meantime, KnowX had identified product applications that would be helpful for small businesses. Again, it needed to convince the target market it actually needed the product.

“We were keeping an eye on our two markets, the consumers and the law firms, and beginning to test small business product offerings” says Rafeedie. “This is another instance of our data playing a role. When we started testing the small business offerings, we noticed a subset of our consumers using the products.”

Turns out a lot of these consumers were owners or employees of small businesses. Within their existing customer base, KnowX had the beginnings of a hybrid third market.

“This gave us a new challenge,” says Rafeedie. “Three markets, with a lot of overlap between two of them. We were going to have to change our ‘consumer versus attorney’ approach or we’d miss the market opportunity.”

Today, the KnowX home page focuses on product applications rather than consumer-versus-attorney categorization. Says Rafeedie: “Public records aren’t new any more. The market’s gotten more crowded and niche competitors have popped up everywhere. So we rely on our data to identify the applications people are using, and use that information to develop product-focused marketing campaigns. Retention and up-sell are a bigger focus for us now.”

In KnowX’s case, it paid to dig deep in the data and go beyond monitoring daily marketing efforts. And KnowX did this without a fancy analytics software package. More important than the tool is the commitment to collecting and using the data; the belief at the highest levels that it’s essential to running a business.

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