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The business-to-business side of the lists industry has been in bad need of a shake-up. Inaccurate information, duplicated entries and a lack of frequent updates are just some of the accusations that have been levelled at the industry in the past.

Yet B2B mailing volumes are actually on the increase (up by two per cent in 2004, according to figures from the Direct Mail Information Service). Demand is growing for data that is as detailed and as varied as its business-to-consumer counterpart. The industry seems determined to respond to this and some of the main players have launched new data sources recently (see box page 34). So will B2B lists finally prove their worth?

A question of quality

Experts agree that the quality of the data available has not improved significantly in recent years. Simon Lawrence, managing director of B2B marketing company Information Arts, says marketers must work with a very limited array of data that has remained much the same for the past 15 years.

"A lot of this data comes from the same source, such as BT directory enquiries," says Lawrence. "Although the amount of data we are dealing with on the B2B side is small compared with that of B2C, we are still looking at a couple of a million records. Most of these are shallow and enhancing them can be a very time-consuming process."

Lawrence believes that introducing a business census - something already in place in some European countries - would be one solution to the problem. Ultimately, however, data has to answer the questions of "how" and "why" - for example, in relation to a certain type of technology - rather than simply "how many".

Many practitioners blame a lack of database cleaning for poor quality data, with some commenting that the cleansing services available are relatively unused. Others argue that much database work is assumption-driven. If you are not getting gone-aways, for example, it is tempting to assume the company must still be there.

Overpricing is also an issue. Kelvin Langley, account director at Listbroker.com, the list division of MM Teleperformance, says that although research and maintenance take time and money, he is not convinced the quality and results warrant the price.

"To me, there's often a balancing act with B2B data," he says. "Do you go for cost-effective Thomson at an economic price and limit your mailing to the senior decision-maker? Or do you pay an additional £60/1,000-£80/1,000 more for data that offers a wider range of job titles but doesn't necessarily guarantee better results?"

Samantha Gray, database manager at Thomson Directories, believes marketers will be looking to the consumer side for tools and ways of improving the quality of B2B lists.

Propensity modelling, for example, is a method B2B data provider Mardev has been using to segment and further enhance data. Instead of building lists and databases focusing on companies, Mardev is looking to build a universe of decision-makers that examines an individual and the business in which he or she works to identify the best business prospects.

Intelligent interpretation

Steve Willcocks, managing director at business data provider Conduit, says it will always be difficult to get equivalent consumer lifestyle data into companies. The key is to interpret existing data more intelligently.

"Question what you are going to be doing with data such as profits and turnover. Company year-end dates, for example, will be much more valuable to businesses that may be selling high-end items," he says.

Conduit has been building up profiles of directors in the small and medium-sized enterprise end of the market, and moves by others indicate that the B2B lists focus is now being trained on such firms. Information Arts, for example, has developed a tool called DNA to help its clients target the SME sector. DNA uses data sources and primary research to map the personal values and lifestyle characteristics of business owners. Other companies are also turning to niche lists to build profiles on SMEs.

"There is a massive fragmentation in decision-making in small and medium-sized companies. For example, who do you target if you want to sell telephones? We use bespoke niche lists. We quite often go into associations such as the Institute of Directors - you may not be able to buy the data but you can work off the back of the lists they hold," comments Richard Glasson, managing director of Gyro, a B2B DM agency that has delivered B2B campaigns to the likes of American Express and Sun Microsystems.

Other industry experts believe that as well as enriching data, B2B marketers need to look at how they can do more with the data they have.

"A key consideration is who will actually open the mail," says Heather Westgate, managing director at TDA. "If you're targeting school teachers, for example, this will probably be the secretaries. So marketers need to find ways of triggering the recipient to hand the mail over, as well as inducing the desired response from the target."

And delving deeper into the business person's lifestyle is not the only answer. Studying customer behaviour, in terms of buying and interest levels, can be one of the most important elements of a successful B2B marketing campaign, enabling a profile, rather than a one-sided view, to be established.

Enhance existing data

There are also a variety of ways to enrich data, says Richard Lloyd, B2B marketing director at Experian. Even though the B2B world does not have the same critical mass as that of B2C, Lloyd believes resources such as surveys can prove an effective enhancer. But he draws the line at B2B marketers emulating their peers in the B2C world by sharing data.

"I've not seen a great move from verticals into shared data pools. In the B2B world, if data is shared, it's a bit like revealing the family silver to the competition," Lloyd asserts.

Marcus Oxlade, business development director at TRG Strata, agrees that the larger companies are reluctant to share their data because it would dilute their strength. However, he believes that smaller players that provide niche lists have complementary data. Abacus has created a data pool for the UK but the opinion from industry insiders is a resounding "let's wait and see if that works".

Using a telemarketing service can keep data clean and up to date but it comes at a cost that customers will be reluctant to bear. There is also a problem with consistency. With some companies, there is lots of information; with others, it is barely there. This can be extremely frustrating for marketers, says Suzanne Lewis, director of list broking services at HLB. She believes data tagging and predictive modelling are two practices that will be used increasingly to enhance B2B data.

While those in the industry believe a greater proliferation of files is coming on to the market, the downside is that not much of this information is new. Debbie Snewing, director of list management at Prospect Swetenhams, says the new information is available elsewhere - if there are new suppliers, the data is already out there.

"What we need to do is encourage data owners to continually enhance and enrich existing data. We take much of our data from Companies House and uses call centres to verify that each address and main point of contact are correct," Snewing explains.

Prospect Swetenhams then includes information such as additional contact points within the organisation, and uses its sister company, ICC Business Lists, to carry out further analysis, which it then overlays on the data.

Importance of suppression

TRG's Oxlade says suppression products have been a great help in improving the quality of B2B lists. "There is a growing realisation that a blanket approach to mailing does not work on the B2B side. Suppression is definitely the way forward," he comments.

Sean Randalls, the head of data development at Royal Mail, says that the quality of data is improving. However, he emphasises that marketers need to be educated to recognise the changes in the industry. "It is almost a question of suppressing the data before matching and enhancing it," he comments.

Randalls also believes that publishers' databases will be the ones to exploit in the near future. "These will give you a much clearer and defined view of your audience - it is an area we are currently working in. And publishers are much more amenable to sharing information than, for instance, companies in the financial sector," Randalls acknowledges.

CASE STUDY: VIKING DIRECT

Office supplies business Viking Direct mails about two million business locations six times a year. Richard Carvell, the general manager, says that coverage of the business universe is critical because Viking is a bulk and high-volume mailer. However, this coverage must also be balanced with quality responses.

"We need to work with reputable suppliers. We work with a number of lists, both rented and on a pay-per-use basis, and with a couple of closely trusted brokers. We monitor at source level and look at response rates and gone away data, so we can try to understand how useful the lists are," maintains Carvell, who has been using suppression files from The REaD Group over the past year.

Carvell says Viking has been plagued by duplicate mail when running large campaigns. He warns that mail can still be delivered to the address of a company even after it has gone out of business. This means there is the risk of sending duplicate mailings to both the defunct company and the one that currently resides at the address.

"In terms of the data on the market, SIC is pretty poor," says Carvell. "I'm convinced that if the industry got together, it could develop some consumer-style business demographics to understand how a business is made up. You can get information on buying cycles, which works well with cars, but it's a lot harder to interpret if you are selling paperclips."

Carvell believes the most pressing problem will be the freshness of business data. "People are transient in their jobs - you'll have to keep ensuring you are talking to the right person," he says. "Make sure you are working with trusted people, who can offer genuine provenance for the data they provide.

"Five years ago, there were established players who were arrogant in their approach. Since then, some very interesting companies have come on board."

DATA SOURCES: WHAT'S NEW

- Conduit launched FTSE 350 this month. The database contains the names of chief executives, managing and financial directors in the top FTSE 350 companies. Alongside generic fields such as company name, address and website, the list will include FTSE classification, share price and date of incorporation. The list will be refreshed every quarter and contacts will be revalidated on no longer than a 12-month cycle.

- Information Arts has developed a data source called DNA, which targets small businesses and self-employed individuals. It profiles businesses using attributes such as line of business, size, financial performance and turnover, location and age of business. Individual business people are profiled using variables such as credit cards, income and financial worth, car ownership and newspaper readership.

- One Source Information Sources has introduced Express UK, which aims to provide sales, marketing and business professionals with information on companies and executives. The details can be used for market segmentation, lead generation, sales prospecting, customer management and competitive analysis. Express UK will offer job titles for multiple functions, detailed financial analysis, news and company background analysis such as ownership information. It covers more than two million public and private companies in the UK.

- Wegener DM launched REALsoho earlier this year, a database that targets small companies and home workers. It offers access to 1.7 million businesses and individuals. Data has been collected from the results of four million lifestyle questionnaires and 1.3 million B2B telephone calls. These surveys will be carried out every year and there will also be quarterly updates from Companies House and monthly updates from BT.

- Abacus introduced its B2B Alliance product last November. The cooperative database enables B2B marketers to pool data such as purchasing information. The alliance is a relatively new practice in the UK. In the US, where it is more established, the alliance holds 75 million active buyers and more than one billion of sales transactions worth $100bn.

THE SUPPLIER VIEW

Global business information provider Dun & Bradstreet gathers its data from a multitude of sources and enriches it using its Market Insight offering.

This consists of five modules. These include customer insight and segmentation, which recognises the best customers with the highest value combined with the lowest risk, Best Fit Prospects, which identifies the most profitable new customers, and Key Account Optimisation, which identifies large organisations and selects key accounts based on potential and risk.

"We take the data in its basic, raw form and analyse it against a series of benchmarks to give clients value-added information. Our Key Account Optimisation, for example, allows you to see how much risk you may be placing within organisations, so you can vary your cross- and up-sell opportunities accordingly," explains Adrian Cutcliffe, senior marketing manager at Dun & Bradstreet.

He says the company makes about half a million changes to its files on a daily basis, and works with smaller, niche suppliers that can complement Dun & Bradstreet's existing data.

Besides generic sources of data, such as SIC codes, line of business and geographic split, Cutcliffe adds that variables relating to behaviour are being used increasingly. These range from payment behaviour and balance sheet information to the amount of energy a business consumes a day.

This month, Dun & Bradstreet has also launched a file matching process to increase the search and match capabilities for customer database validations. The new process will include a further four detailed levels of validation , increasing the total to 11 individual checks.

"Customers will now benefit from much greater match rates. We are confident they will see a significant increase in match rates and, as a result, they will be able to take the data to new levels of decision-making," says Cutcliffe.