Live From NCDM: Building the Microsoft Warehouse

Microsoft, which was data-challenged only a few years ago, has boosted its consumer sales and taken a tentative stab at real-time data turnaround with a new data warehouse.

This year, it expects to generate $50 million in sales with the shiny new asset. “But we’re still another year from having CRM nirvana,” said Allison A. Cornia, group marketing manager at MSN Microsoft.

Budgeted in the low seven figures, the project was launched by the firm’s consumer marketing unit in June 2000. The task: to integrate data from many unlinked sources and departments, many of which were working at cross purposes.

“We had no infrastructure, no way to predict attrition, no integrated contact strategy,” Cornia noted, speaking at the National Center for Database Marketing conference in Orlando. “People got four pieces of mail from three product groups in a few weeks.”

Why bother at all? Microsoft was going through a “paradigm shift,” moving from strictly retail sales to a strategy known in-house as .NET, Cornia added.

And the stakes were high. Microsoft’s consumer sales total upwards of $2 billion a year, according to Cornia.

The first task in the two-stage process was to gather data from all the databases in the company. There were 25 million records, some dating back to 1996, and some “buried under rocks,” Cornia said.

Included were product registrations, online signups, newsletter subscriptions and promotional data. “The largest file was transaction-based,” Cornia said. “We had 60 million transaction records.” (That figure is now approaching 75 million).

Microsoft realized that simple merge/purge wouldn’t work with 2,000 records a day being added. So it opted for Consumer Data Integration (CDI). That meant bringing on Acxiom’s Abilitec product early in 2001. E.piphany was used as a campaign-management tool.

Don’t think Microsoft’s own technological savvy helped it much. “E.piphany and Acxiom are always faster than we are,” Cornia joked.

But technology was the least of the problems. The biggest pain was resistance in the silos, Cornia continued. “We’ve been trying to get data from one group for a year and a half,” she said.

To persuade people, Microsoft had to brand the effort in-house as CIQ (Customer Insight and Query). It also had to document that it would work, and that data would not be used without an owner’s permission. “We told them it would be like Switzerland,” Cornia said.

Different departments had different needs. “Some of our businesses are Internet-driven,” Cornia added. “They wanted to know who people were 48 hours after they registered.”

The results? The work-in-progress attracted 50-plus Microsoft users within the first week, and that number is now up to almost 100. Cornia is counting on the early adapters to become evangelists. The first big success was a holiday catalog mailing to 2.4 million names late in 2000. It generated $3 million in both direct and indirect sales. (Since then, Microsoft has stopped mailing paper catalogs to consumers. It now relies heavily on e-mail, 26 million pieces of which were sent in 2001. The total for this year is 60 million).

Better yet, the two-stage warehouse project, which was completed in 2001, broke even within six months, Cornia claimed. And it has helped the company maintain a uniform privacy policy.

The warehouse drove 20 campaigns during the first year, generating $3 million in direct sales. In the second year, the firm did 30 campaigns a month, generating $24 million (compared to an original goal of $12 million).

Moreover, campaigns are now meticulously coordinated and tracked (no small thing when you’re spending in the mid-seven figures every year on direct marketing).

Despite that record, silo paranoia is still a problem. And the firm is now working on getting its call center and wireless pieces into place.

And real-time turnaround? Microsoft is not quite there.

“We haven’t stepped up to use it yet,” Cornia said. “We can’t swallow data that fast.”