InformationWeek

Harbor Freight is taking that Web potential one step further, by integrating online data with the information it culls from other sources. The company has 8 million customer records in its database, and it uses them to plan marketing campaigns. Harbor Freight stores the records in an internally developed data warehouse, which it uses to separate slices of data, looking for trends. It then loads that data in E-mail campaign-management software from Delano Systems Inc. to send customers personalized information on subscriptions, sales, and in-store specials. A customer who bought a table saw in a retail store and a drill online might get E-mails with offers for saw blades, drill bits, and how-to books for the project he or she appears to be working on.

A true 360-degree customer view depends greatly on the the type of data a company is tracking. Basic information such as transaction data and customer names and addresses has its value, but it doesn't touch all facets of a customer. It doesn't take into account the customer's life outside the business, such as where else she shops, how many kids she has, and what she does for fun--and it doesn't provide nuances of the customer's character, like whether she's a saver or casual spender.

That's where third-party data comes in. 1-800-Flowers gathers plenty of data from its 8 million customers, then fleshes that out with data bought from Experian Information Solutions Inc. Experian has demographic and psychographic information that details lifestyles and personality traits; it adds that data to customer data, giving a client information about its customers outside of their interactions with the company. That data will help 1-800-Flowers plan campaigns to acquire and retain customers, especially as it looks for them in a prime demographic segment, such as 18-to 35-year-old males with more than $60,000 in income.

Businesses can also get detailed information about their customers by having them enter that data themselves, in registration forms, E-mail, and on Web sites. The process saves businesses money, and it gets them data that would be difficult to gather otherwise, such as job descriptions, income levels, and buying power. Cadence Design Systems Inc., a San Jose, Calif., engineering applications company, has been letting customers enter and change their own data on its Web site to register for products and receive product information. The system appeals to customers because they control what the company knows about them and can fill in information without having to interact with a service representative. That data is fed directly into Cadence's Onyx CRM software system.

But the process has its difficulties. For instance, customers can begin to resent the extra work they're asked to do simply for the privilege of buying a product. And they're often mistake-prone, which introduces errors into a company's records, such as typos and incorrect information. "We don't want to end up polluting our database," says Graham Sheldon, Cadence Design Systems' VP of strategic business systems.

Also, customers aren't necessarily following database rules. A customer could buy one product as Mike Jones, then enter his name as Michael K. Jones on his next purchase; Cadence wouldn't know the two Joneses are the same without more detailed investigation. So the Onyx system looks for common characters--such as the first three letters of the first name and the first five letters of the last name--to ensure Cadence doesn't enter the same person twice (see story, p. 136).

Some companies are looking for more innovative ways to collect customer data. General Motors Corp. is tracking customer activities through OnStar, the satellite network that acts as a concierge for GM car owners--opening locked car doors, offering maps and directions to restaurants, and delivering news and stock quotes on demand. OnStar can track information about the customer's car, alerting GM and the customer when a part needs to be replaced, or when the car is due for servicing based on how many miles it's been driven.

But OnStar is also the key to much more. Thanks to the type of services OnStar offers, GM gets an intimate look at its customers. "We have a direct linkage with the customer. We have their commute times. We can interact with them on a whim," says Tony LaCivita, director of customer experience and enterprise customer management at GM. The company's role as a concierge lets it know what restaurants its customers like, what stock quotes a customer watches, what news and content customers listen to, and where customers drive on weekends. What the company will do with that information is still under discussion--but the possibilities would make many sales and marketing managers envious.

OnStar is just part of a larger initiative to help GM understand its customers. The automaker has extensive data from its core automotive, service, and finance businesses. LaCivita says the company has captured 11 years of automotive history and nine years of financial history, and is using both to "cross-fertilize" its call centers with customer information. It can see how much customers make, what kinds of cars they buy, and how often they replace them. GM has integrated GMAC financial information, purchase history, vehicle information, and service records in a single system, all connected to its Web site. Now it's working on tighter integration to the data it collects from the OnStar system. "We used to talk about your father's Oldsmobile. The reality was, we never had information about your father's Oldsmobile," LaCivita says. Now GM does.

The automaker uses the information to interact with its customers across a variety of channels: dealers and branch offices, eGM Web portals, General Motors call centers, GMAC financing, GM interactive vehicles, auto shows, and direct mail. The data can help the company sell products across multiple channels and product lines--for instance, details on purchasing information and content preferences taken from OnStar could be used to sell services to a customer who might be interested in GM's DirecTV business. Wary of privacy issues, GM says it won't use the data for developing its marketing efforts. Rather, LaCivita says, the data will be used only when customers contact the company.

He calls it "trickle-down marketing": GM collects tidbits of information that can be useful during customer-service calls and sales. If a customer tells GM that she's expecting a baby, for example, the company can use that information the next time she calls to offer insurance aimed at families, or a four-door car to replace her compact model.

One of GM's biggest goals is to move beyond the individual to the household. It wants to learn not only about the person who has his or her name on a car's title, but also about spouses, children, parents, and siblings. By understanding the relationships among its customers, GM hopes to better understand the value of the household, and understand what services everyone in that household needs.

There are other ways for companies to expand their customer databases. American Airlines knows a lot about its customers because it gathers all the usual flight information: frequently traveled routes, payment history, home airports, and favored in-flight meals. But as the company teams with partners such as rental-car companies and hotels, the data starts to mount. Suddenly, the airline has the opportunity to know where its passengers go once they leave the airplane.

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