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Verizon Information Services was experiencing high attrition in its sales of Yellow Pages advertising. The annual attrition ranged from 10 percent among long-term advertisers to 27 percent among new advertisers. The attrition amounted to over $250 million per year, which translated to over $1.4 billion over the life of the lost advertisers. This loss plus a lower than average acquisition rate was reducing Verizon s penetration in the marketplace. A study by the Verizon Database Marketing staff showed that there appeared to be two reasons for the high attrition rate: 1. Many small- to medium-sized businesses felt that Verizon had not established a satisfactory relationship with them. The Verizon sales representatives would make contact with their clients only once or twice a year. As a result, some business owners felt that they lacked a close working relationship with Verizon. 2. Small businesses often had dif culty understanding and calculating the value of Yellow Pages advertising. Figuring out how to assess their return on investment was dif cult for them.
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To address these issues, Verizon wanted to create a retention communications program with these objectives: Position Verizon as a business partner for the small-business owner, not just another Yellow Pages provider looking to sell some ad space. Educate advertisers about the value of Yellow Pages. Target offers and messages to customers providing useful business information. Verizon s challenge, like that of many other companies, was to get its hands on good customer information in a timely manner. There was an abundance of data on the customers in Verizon s data warehouse, but it was dif cult to make that information available quickly enough to enable the company to carry out time-sensitive campaigns. Some of the issues facing Verizon included the following: Verizon was unable to coordinate the data with the sales cycle and customer pro le. The sales cycle is dif cult because Verizon produces more than 1500 different books during the year, with varying closing dates. Some advertisers are in only one book, but many are in two or more books that have different closing dates. It was dif cult to determine the correct address for advertisers with multiple locations. There was no place in the existing database to store model scores or to segment categories. There was no process for communicating pro le and research information to the supporting groups and departments. The Verizon Database Marketing staff decided to launch a new program to solve these problems. When the staff began, several solutions were under development or already in place. Behavioral models had been built to predict advertising purchase behavior, including models showing Propensity to acquire Propensity to cancel, decrease, or increase current spending
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Propensity to buy additional products Lifetime value Some preliminary work had been done on building a data mart, using periodic feeds from the data warehouse. This data mart would be used to organize, summarize, and analyze customer information. Finally, some direct-mail testing had been done, with varying levels of success. Since there was no formalized program in place, these elements were considered nothing more than research and development projects that might or might not yield some long-term value.
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The breakthrough solution came as a result of cooperation between information technology (IT) and marketing. A cross-functional team consisting of marketing and IT professionals came together in order to create a Best in Class database marketing program. In order to launch the program, IT revised the data mart so that it could Aggregate customer transaction data to an annual level to match the sales cycle. Tag customer performance versus the previous year (increase, decrease, cancel, etc.). Overlay business demographics (SIC code, number of employees, annual sales, etc.). Attach model scores to each customer record. Record campaign results attached at the customer level. When this data mart was combined with campaign management software, it became a powerful tool for direct marketing and marketing research. While the data mart was being built, customer models were updated and made ready for use in segmentation and targeting. This gave the marketing team the ability to analyze and segment the customer base, design
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