Turning numbers into people

When pressed for the 15 second "elevator" definition of datamining, Jonno Ingerson says, "It's finding nuggets of gold in customer data."

Datamining is a relatively new specialty in the marketing mix. The company Mr Ingerson works for, Datamine Ltd, was the first in New Zealand, established in 1995 in response to a developing trend in the United States.

"Basically, what I do is help companies' marketing departments discover who their customers are, what motivates different segments and how to make the most from this information.

"We identify what customers 'look like', how they behave and why.

"In other words, we turn numbers into people."

As an illustration of how datamining can work, Mr Ingerson refers to a 1996 case study in which the Department for Courts used datamining as a tool to help it collect unpaid fines.

At that date the department was owed more than $120 million in overdue fines and wanted to find out more about the types of people who were defaulting, Mr Ingerson explains.

"Once it had a profile of its 'clients', the department recognised it would be in a position to target its marketing activities more effectively."

Datamine built on to information from the department's fine's system with census information.

"We used a technique we developed in-house that provided the department with a visual dynamic segmentation that met both business needs," Mr Ingerson says. "When combined with detailed profiling, this segmentation provided the department, for the first time, with an accurate picture of its clients."

No "off the shelf" solutions are used - "We design an approach that is unique for each occasion and we like to develop a relationship with our clients and work with them strategically over the longterm. We understand their business strategies and objectives. That enables us to ask the right questions to get useful interpretable data."

Mr Ingerson says it's surprising how little most companies know about who their customers are and how they interact with their organisation.

"It's ironic that at a time when the level of face-to-face customer contact is dropping, business' digital information systems have made it possible to understand more about their customers than ever before."

Mr Ingerson says datamining techniques can be used to achieve a wide range of goals within different industries. He lists a number of ways in which his company has helped clients recently:

• Identifying profitable customers and their characteristics
• Cross-selling and upgrading customers based on past product purchases
• Effectively segmenting customers into manageable groups
• Focusing marketing efforts on prospects more likely to purchase
• Evaluating advertising effectiveness
• Evaluating and prioritising credit risks
• Estimating customer potential and commitment
• Ranking customer defection for effective retention programmes.

"The more people know about their clients, the better they can look after their needs," Mr Ingerson says.

Datamining is not just helpful for businesses and organisatons, it has benefits for consumers too, Mr Ingerson points out.

"As consumers, people benefit from better targeted campaigns. Companies don't send material to people who don't want it so there's less junk mail. Offers can be customised better so people aren't receiving irrelevant form letters and companies can save money on advertising campaigns. Instead of spending $1 million targeting people who don't want their product, they can spend $100,000 targeting people who do want it."

Dataminers acknowledge people's concerns about "the electronic footprint" or the role of "Big Brother".

Data security and privacy are important issues for both Datamine and the companies it works with. "We place great importance on protecting the privacy of customer information and this often extends well beyond the guidelines of the Privacy Act," Mr Ingerson says.

Because it is both a new and unique discipline, Mr Ingerson says there is a huge shortage of "miners". He himself was lucky to have discovered what he says is "the perfect job" for him.

As a boy, he rather fancied himself as the new Jacques Cousteau. With a first class honours Masters degree from Victoria University of Wellington, he joined NIWA as a marine biologist and spent five years doing fisheries research including stock modeling and fisheries management.

"But my romantic idea of fisheries research turned out to be highly analytical work and not particularly financially rewarding," he recalls.

So he took a job with Telecom's Human Resources department where they needed their business processes and systems redesigned.

"It turned out I was good at finding business needs and turning them into solutions," Mr Ingerson says.

This led to a several jobs in Telecom marketing including marketing analysis, product management, and customer contact strategy. Mr Ingerson later joined a small start up IT company to continue developing his mix of analytical and marketing skills. In the way of many start up companies at the time the company fell over, fortunately at the same time as he spotted an advertisement for a job at Datamine.

"I read it and couldn't believe it - it described me exactly."

That was over two years ago, and Mr Ingerson says he has never regretted his move.

"I started as one of the analysts but it was always my desire to move into a fully client facing account management role. I can now use my technical knowledge to help deliver the best possible marketing solution for our clients," Mr Ingerson says.

"It's a high pressure job. We work hard and there can be long hours - our clients know we will turn their jobs around quickly. But we also play hard. We're like a family here - we have lunches brought in and a pool table to play on. We get a subsidised massage every two weeks and there's a four wheel drive for the staff's use.

"It's a culture of caring."

Datamine has a vision, he says, with values including "innovation, excellence, partnership and whanau".

"We work to live up to that," Mr Ingerson says. "And we have fun doing it."