Data You Can Take to the Bank

Sometimes, bad data can happen to good companies. As application service providers work to bring business intelligence to a wider market, many retailers and wholesalers are learning that their databases arent always stocked with the best information. "Data ages more quickly than retailers like to admit," said Malcolm Fowler, vice president of business development for Ernex Marketing Technologies, a Burnaby, British Columbia, electronic marketing company.

Now, some consumer goods companies, like The Coca-Cola Co. and Eddie Bauer Inc., are turning to Web-savvy companies like Ernex and the startup UPromise Inc., of Brookline, Mass., for help in collecting accurate data that will make business-intelligence analyses more effective.

Both Ernex and UPromise use customer affinity cards and loyalty programs to help them get the best customer information. Both companies believe that consumers will readily provide personal demographic information if they believe theyll receive some value in return. Thus, UPromise cleverly ties affinity programs in with what it says is the single biggest worry keeping parents awake at night: how to pay for their childrens college education.

Come January, UPromise goes live with its Web education savings site. First, parents sign up with a "529" college savings plan that more than 40 states now offer parents to sock away tax-free college savings. The UPromise twist is to induce consumer goods companies, ranging from soft-drink bottlers to automakers, to contribute to 529s. When Mom buys a six-pack of soda at the supermarket, a swipe of her store affinity card sends about 3 percent to 5 percent of the price (the amount is at the corporate participants discretion) into Juniors fund. Mom and Dad can visit UPromise to track company contributions and see estimates of the nest eggs future worth.

"We see this as a flip of our traditional marketing strategy," said Jackson Cosey, a vice president for Atlanta-based Coca-Cola, one of the first companies to sign on with UPromise. "Weve always tried to bring people into the Coke world; this brings Coke into the consumers world." Of course, Coke will also get a gold mine of instant marketing information—although UPromise says it will supply only aggregate spending data, not the buying habits of individuals.

Ernex manages loyalty programs, collecting spending information and using data analysis software from Cognos Inc. to alert customers to marketing opportunities. Ernex also collects customer data when a retailer scans a shoppers affinity card at the cash register. "Were dealing with people at the retail touch points," Fowler said. "Our clients then may want to blend this data with other CRM [customer relationship management] information to layer our stuff on top of their own [business- intelligence] systems." He added that about 30 retailers use Ernexs outsourcing services, including Royal Bank of Canada, RadioShack Corp., Eddie Bauer and Nike Inc.

Affinity cards and loyalty programs may help in the battle to turn information into knowledge. "Information has overwhelmed many retailers," Fowler said. "Now theyre starting to use it to tune their promotions to get closer to one-to-one marketing."