Posted by Ajay Kelkar on Sun, Jul 26, 2009
Companies around the world
are literally drowning in data. A typical airline or retailer, for example, is
collecting data from many operational systems and storing terabytes, if not
petabytes, of data. But how closely do CMO’s and CIO’s actually work or are
they often at cross purposes! In India and I am sure in other furiously growing
markets as well, IT is so busy building the basic infrastructure to manage the
business that they often ignore the strategic priorities that Marketing is
trying to drive!
Paul
Barsch writes about how the chasm between Marketing & IT can be bridged in
this interesting article “Preparing for the Future: How the CIO and CMO Must
Collaborate to Win”
Paul
has some very interesting view points that you can have a look at http://paulbarsch.wordpress.com/
He has
this interesting take
“However, two powerful exponential trends (growth rates of data and
technology), will dramatically affect enterprise operations, forcing the
marketing and IT functions to communicate and collaborate like never before.
Moore's Law, conceptualized by Intel pioneer Gordon Moore, states that
the number of transistors per microprocessor will double every two years. This exponential
increase in processing speeds for various machines/devices will eventually
enable advances in economics, biology, technology, business, and other key
fields.
The second powerful exponential trend is the increasing amount of data
that companies must contend with on a daily basis. According to a Forrester
Research report titled "Data, Data Everywhere,"
the "volume of the world's data doubles approximately every three years"!
And for most companies data isn't conveniently stored in one central
location—it is often found on spreadsheets, data marts, and storage devices
strewn across the enterprise. In fact, in many organizations, marketers are a
key culprit in the creation and upkeep of separate "pocket databases"
containing customer lists and purchase histories.
And while capturing and storing relevant data is a challenge, an
additional obstacle is analyzing and translating this data into actionable
information to improve the customer experience or drive operational efficiencies.”
Paul makes this interesting comment: “Marketers need fresh and
accurate data for advanced marketing functions such as better segmentation,
more effective campaigns and offers, and relevant interactions with the
customer across multiple touchpoints. And CIOs realize that the benefits of
creating a single source of relevant and accurate data for business analytics
go far beyond helping marketers get closer to customers—and in fact benefit all
aspects of company operations. Both the CIO and CMO have a stake in the
development and implementation of an analytical infrastructure capable of
turning data into actionable information that in turn enables better
decision-making not just in marketing but across the enterprise.”
Our take at Cequity
1.
Are
you creating forums by which the IT department can better understand your
marketing agenda?
2.
Is
the CMO championing areas where there is an overlap with the CIO/CTO- eg Data
quality, Service oriented architecture etc?
Posted by Ajay Kelkar on Tue, Jul 21, 2009
Marketers
believe that creating “personalized communication” is important to drive a
relevant communication strategy. But often they do not have control over the personalization
process. Often very shoddy and “very personal” communication gets sent out by
local sales folk which does nothing to enhance the brand perception and even
less to the effectiveness of the communication. In a bank ,the billing process
is possibly as “personal as it can get” but rarely would you find anything but
mass communication tumbling out of your credit card bill envelopes. A lot of
this is to do with the economics-mass offset printing is still far more economical
than any form of personalized digital printing! Imagine the amount of truly
relevant information that can be sent to me as a credit card customer because
the bank knows my usage so intimately.
But this rarely happens and this is what
we at Cequity call “lazy marketing”.
A new study,
called ‘The Power of Personalization’, by the Chief Marketing Officer (CMO)
Council brings the discussion on personalization back to reality. It
focuses on the products, benefit and relevance of customized content and
communication which should make marketers rethinking their marketing
activities. The study surveyed over 700 senior executives ranging from CEO,
CMO, SVP, and VPs of Marketing from across different market sectors.
Short summary
on some important findings (by en-ovationblog)
- Over 56% of
marketers content that personalized communications out-perform traditional
mass-market delivery; digital, database-driven channels offer the most upside
potential for engaging in customized communications.
- Chief
marketing executives are seen as the primary owners of personalized marketing
initiatives. However, sales and customer relationship management groups most
frequently maintain control of the data that provides the foundation for these
campaigns.
- While many
marketers are still working at tracking the overall effectiveness and ROI of
personalized communications, almost 40% say they are generating either “extremely
effective and measurable ROI” or “better response rates than other programs.”
-
Individualized letters and email are the most common form of personalized
communication.
- Conversion
and close rates are the primary measure of success, followed by email actioning,
website traffic/page views, and impact on retention and churn.
The executive
summary of ‘The Power of Personalization’ can be downloaded here.
Posted by Ajay Kelkar on Mon, Jul 13, 2009
Netflix has a computerized recommendation system which seeks
to find the common threads in millions of people’s recommendations and throw up
“what’s best for you”? A lot of Online commerce sites have this kind of
recommendation engine at work and Amazon is another well known example.
Netflix had a unique challenge: they wanted to improve
Cinematch , their “recommendation
engine.” Cinematch is the bit of software embedded in the Netflix Web site that
analyzes each customer’s movie-viewing habits and recommends other movies that
the customer might enjoy.
Netflix wanted Cinematch to compete with the best minds “out
there” and anyone who showed a 10% improvement over Cinematch would stand to win $ 1 million!
Breaking
news:
On Friday, Netflix Prize team “BellKor’s Pragmatic Chaos” passed the mark,
qualifying for the $1,000,000 prize. The team includes engineers from AT&T.
Now, according to Netflix, Pragmatic Chaos — a coalition of employees from
AT&T, Commendo, Pragmatic Theory, and Yahoo Research — has figured out the
winning formula. Just last week , Pragmatic Theory submitted an engine that
showed an improvement of 9.78%, just a sliver off the 10% mark. Today, however,
with the 10.05% submission from Pragmatic Chaos, we could see this contest
finally rewarding the true genius of these scientists.
But they haven’t won yet. Their qualification triggers a
30-day count-down during which all teams have a final chance to improve their
efforts.
Clive Thompson has written this fascinating piece for The
New York Times
http://www.nytimes.com/2008/11/23/magazine/23Netflix-t.html?pagewanted=1&_r=2
Robert Grossman has this interesting piece on how companies
can learn from this regarding Analytics strategy.
http://blog.rgrossman.com/
Posted by Ajay Kelkar on Sun, Jul 05, 2009
Many businesses do not have direct interactions with their customers. Service industries like Retailers, Banks & Telecom companies have millions of customer interactions which give them the customer’s pulse! How do packaged consumer goods companies achieve the same customer intimacy?
Coke has done a fantastic job of creating a strong connection with its consumers. Coke’s marketing team first asked themselves three questions: 1)How can we connect with consumers? 2)How can we collect relevant information from consumers? 3) And finally, How can we perfect those relationships over time?
This led to a path breaking program called My Coke Rewards. Read more about this and the unique technology platform they used at:
http://www.edmblog.com/weblog/files/MyCokeRewards.pdf
Coke has now taken this data led thinking to yet another marketing innovation!
Coca-Cola doesn't think its customers have enough drink choices. Recently diners at some California, Georgia, and Utah fast-food joints got to try a self-serve drink dispenser that pours more than 100 varieties of sodas, juices, teas, and flavored waters.
Coke plans to roll out the Freestyle drink dispenser nationwide, eventually putting tens of thousands of them in places such as McDonald's, Burger King, and Willy's Mexican Grill. And while the machine is taking the concept of customer choice to new heights, the most interesting aspect is the technology it's built on. Freestyle will become Coke's front-line robotic army for business intelligence, sending massive amounts of consumption data back to the beverage company's Atlanta headquarters.
But what's more important is that Coke will be collecting data on every pour, to gain intelligence on what brands and flavors are most popular. According to Information Week:
Freestyle will let Coke more easily test new drink flavors and new beverage concepts, such as adding various vitamin combinations to flavored waters and juices. The dispensers each contain 30 cartridges of flavorings that mix up 100 different drink combinations. The cartridges are tagged with radio frequency ID chips, and each dispenser contains an RFID reader. The dispensers collect data on what customers are drinking and how much, and transmit that information each night over a private Verizon wireless network to Coke's SAP data warehouse system in Atlanta. The company will use the data to develop reports that assess how new drinks are doing in the market, identify differences in regional tastes, and help fast-food outlets decide which drinks to serve.
Instead of focus groups and customer surveys, Coke will use technology (RFID, wireless connections) to gain actual consumption information.
Definitely other Consumer goods companies will take notice as they look to gain customer insight from anonymous customers.
Read more about this interesting analytics led marketing innovation at:
http://www.informationweek.com/news/mobility/RFID/showArticle.jhtml?articleID=217701971&pgno=1&queryText=&isPrev=