Thursday, August 24, 2006

Would you consider a SaaS/on-demand solution for marketing analytics?

By normal conventions for my job, I'm supposed to answer a "hell, yes!" to this question because I work for a company that does on-demand marketing analytics. But all hype aside, let's explore this and see where it makes sense.

We all know, specially the direct marketers, that data can be leveraged to get a better understanding of customers/prospects which results to more targeted and effective marketing programs. This concept has been around for decades and generally well accepted. For a while, data used to be the challenge where an organization wouldn't have much data on its customers -- but in the age of web, RFID, CRM explosion, etc. -- people have way too much data to know what to do with it. Still then, why are we being bombarded with spam and other irrelevant marketing messages?

A lot of marketers, specially in the SMB sector would answer -- well, it's hard to do this. Analytical solutions to leverage your customer data are tough to implement. It's either some expensive software/hardware (think BI/CRM/Analytics solution providers), or some elaborate marketing service provider (agencies, mailhouses, etc.) with heavy-duty hourly rates, or else you left with your own devices to put together an analytics team who has:
  1. Technology know-how to deal with large datasets and apply heavy-duty analytics
  2. Business know-how to understand vital issues challenging your business and marketing
  3. Strategic approach to analysis to avoid not seeing the forest for the trees
Sounds familiar?

What direct marketers, and a lot of other data-driven decision makers, seem to be lacking is an agile yet reliable set of tools that help them "see through" their data without having to own expensive hardware/software infrastructures, or having to pay for service provider hours throught the nose. And I think, a Sofware-as-a-Service (SaaS) or on-demand approach can be a very valid alternative approach to get there.

Because let's say you had an option to go with a SaaS solution provider for analytics, someone who had an easy way for you to upload all your marketing data securely and reliabley, and then let you define what exact answers you were looking for, and based on that apply the relevant analytical models and provide you the answers in a form you can actually understand. I am not talking about showing a bunch of fancy charts, graphs, and (yes) the dreaded dashboards -- but actually providing you with deliverables you can use.

Things like a downloadable list of all customers who are likely to bail out on you in the next 30 days. Plus the optimal set of retention tactics derived via a set of data mining models that analyze all past retention programs. Or, it could be a list of customers who are most likely to purchase a certain product -- or conversely, list of customers who will be really upset if you try to direct market them.

Now, I know these deliverables may sound simple, or "gee, everyone can do that" -- but at most of the companies I have worked with, I still don't see this. It baffles me as well, but most companies aren't even at this level of understanding.

Yes, I am biased because my job is to build and promote SaaS or on-demand analytics; but I also know that market will only buy a solution if it makes sense, only if it is truly a better alternative to other solutions. I don't know that. I have confidence in our approach, and with the different customers who we have been able serve via this model, but honestly, that's not enough data points. And as a solutions provider, I sure would like to make sure we are building/providing things to our customers that add a great deal of value.

So, what do you think? Do you feel SaaS/on-demand is a viable model for analytics? If you were in a situation to choose, would you go with an on-demand analytics solution (provided analytics is not the core competency of your businees)?

I think it's surely worth a shot to consider.

1 comment:

gordon said...

I'm surprised no one has responded to your question. I am doing some research in the area of on-demand customer analytics and would like to connect with others who also care about this subject