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Extend the Corporate Hierarchy in a Marketing Database
Sudip Chakraborty Principal Inductis

This hierarchy was primarily developed from a risk management perspective and while it has been used by marketing organizations, it does not fit there very well. Marketing organizations are concerned with identifying as large a universe of decision makers as possible and identifying all possible contact points for each of them which this hierarchy does not provide. We propose an alternate or extended hierarchy that addresses these concerns.

The extended hierarchy can be considered at the following 3 levels for each business at a location:

Business Contact Points (B-CP)
Business Decision Makers (BDM)
BDM Contact Points (BDM-CP)

Some of this information, e.g. Business Contact Points, is traditionally available for businesses. However, due to the multiple types and numbers of contact points available for both businesses and people, the information may not be used optimally unless it is structured appropriately. Structuring the corporate hierarchy in this manner by integrating available information will enable marketers to make marketing decisions in a more targeted manner. For example, a marketing manager may decide to test response effectiveness at BDM contact points to understand which contact points (e.g. home address or business address) generate higher response rate.

Business Contact Points (B-CP)

Each business can be contacted at multiple locations. Contact points include address, phone, fax and email. By far, the most commonly used by direct marketers is address. A business can have a physical address as well as a mailing address. Some businesses will have a delivery address which is different from the physical address. It is useful to separate these out so that you can measure whether specific contact points are more effective than others.

Business Decision Makers (BDM)

Each business can have multiple decision makers. From a marketing point of view, it is important that all of them are identified. Data is available from various sources that show for each business who the decision makers are. In many cases, titles are also provided. This is important since you want to target the right level of people. This is where the combined corporate hierarchy as well as the marketing hierarchy can be very effective. For maximum effectiveness, it is important to know where in the corporate hierarchy the BDM has decision-making authority. For example, a credit card company may want to target the CFO in the Ultimate Company for marketing a corporate card, while Principals in each branch may be targeted for a small business card.

BDM Contact Points (BDM-CP)

Each decision maker can be contacted at multiple locations. Contact point types include address, phone, fax and email. By far the most common is address. A person can be contacted at multiple points including his/her business address, primary residence address, vacation home address. Similarly, a person can be contacted by phone at his/her business, his primary or vacation residence or by his/her cell. It is important to be able to capture these so that you as a marketing manager can decide what contact points are most effective, and just as importantly, which contact points are NOT effective.

Differences between corporate hierarchy and extended hierarchy

It is important to note that the extended hierarchy is applicable to the entire universe of businesses as opposed to the corporate hierarchy which is applicable to only about 10% of the businesses (since nearly 90% of businesses in the US are stand-alone or have a single location). Also, while the traditional corporate hierarchy contains legal relationships, the extended hierarchy contains both legal (e.g. a BDM relationship to a company) as well as non-legal (e.g. a BDM-CP relationship to a BDM).

Traditional corporate hierarchies look like the following:

Corporate Hierarchy Tree

In the extended hierarchy, in addition to ultimates, subsidiaries and branches, Business Decision Makers (BDM) Business Contact Points (BCP) and BDM Contact Points (BDM-CP) are also identified.

Extended Corporate Hierarchy Tree

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