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Customer Intelligence:
Suddenly, It's 2006

  Column published in DM Review Magazine
February 2006 Issue
 
  By Larry Goldman

Last year, when I had my first child, someone said to me, "The nights are long and the years are short." Well, the nights were extremely long, and they were loud, and sometimes they smelled really bad. Long nights typically led to long days, and I thought I would never get eight hours of sleep again. But I didn't truly understand the second part of the statement until I woke up on November 24 and realized that it was already  Thanksgiving. Where did the year go?

With 2005 history, I reflected on what happened in the last year and what could happen in 2006.

Data Integration

In 2005, we saw the concept of the single view of a customer become a reality. Many organizations finished the data integration needed to supply a holistic view of the customer. Organizations just embarking on large-scale customer intelligence issues took big-bang approaches, leveraging the newest data integration technology to provide the productivity to create data warehouses and customer data marts in record time.

On the product front, we saw Ascential (bought by IBM) and Informatica continuing to conform to each other. IT departments have given up trying to differentiate the products and have found comfort with either of the market leaders. Some organizations embarked on long-overdue metadata projects that provided context for their information architectures which sometimes helped scrutinize Informatica and IBM (Ascential) offerings. Customer data integration (CDI) became a buzzword, and many organizations asked themselves if they need an acronym for the customer data cleansing, merging and dedupping that they have been performing for years.

In 2006, we will see the largest push yet in leveraging data warehousing information into the operations of a company. Making sure that customer-facing employees have the information at their fingertips to make the right offer to a customer as well as manage customer profitability at the point of interaction will push data integration technology into new applications. The continued integration of extract, transform and load (ETL), enterprise application integration (EAI) and enterprise information integration (EII) technology will further ensure that customer value, offer management, sales activity management, information capture and best practices are available at each touchpoint. Sales, marketing and service organizations will find themselves at a disadvantage in 2006 if they don't know enough about a customer to move the sales process forward, resolve issues economically or make an offer to increase customer-level profitability and revenue.

Analytics

Corporate performance management, business performance management, dashboards and scorecards were all the rage in 2005. More than ever, users complained about information overload (but didn't you ask for free access to loads of information when we built your data warehouse?) and drowning in the sea of data that the organization has become. Fighting back were dashboards that consolidated information into easy-to-use graphical metaphors, customized home pages and consolidated metrics with several different delivery platforms (cell phones, email, application, intranet). Managers could check corporate, division, region or personal performance at a glance and let one of those "analyst people" dig into the detail with ad hoc tools, mining mountains of data.

On the product front, we saw Cognos solidify itself as a market leader to be reckoned with. With Business Objects starting to integrate its Crystal acquisition and leveraging its ETL tool to make information delivery sales, the war of who has the most holistic set of reporting applications between Business Objects and Cognos is at its height. Many organizations have also bought into Oracle's suite of portal and BI products enhanced by the acquisition of Siebel which was starting to establish itself as a packaged analytics vendor.

In 2006, we'll see an explosion of customer-facing analytics achieved by embedding your favorite reporting tool in your customer extranet. Whether you are a newspaper reaching advertisers, a consumer products company reaching retail buyers or a mortgage company reaching brokers, reporting tools are easy to embed in portals and applications. This capability allows customers to retrieve information around purchases, profitability, deals, fees and profit sharing as a value-added service from their suppliers. Customers are demanding information, and responsive sales information suppliers are providing analytic applications that raise switching barriers, leading to increased retention. Organizations successful with analytic portals will also try to crack integrating unstructured content with core metrics.

Marketing Automation

Marketing automation launched into the big time this year as Unica, a pure-play marketing software company, went public, proving at least to the financial markets that this is a space to watch. With DoubleClick being picked apart, Aprimo picking up the marketing automation pieces and Epiphany being bought, the product landscape changed dramatically. With Unica as a solid market leader, the battle for second place rages between everyone else. SAS continues to pour investment into its marketing automation solution, Chordiant has resurfaced with a great user interface and the ability to integrate its analytics and marketing modules make it a formidable competitor.

What will make the difference in 2006? The integration of analytics and the ability to optimize and manage offers across real-time touchpoints.

2005 showed market leaders challenged across all aspects of customer intelligence - ETL, reporting and marketing automation. Combinations of innovation and conformity are making it difficult to understand who provides the right application for robust requirements. The bottom line for organizations in 2006 will be who can deliver value to their customers and those dealing directly with customers (sales, service and support).

...............................................................................

For more information on related topics visit the following related portals...
Analytics, Data Integration and Market Segmentation.

Larry Goldman is president of AmberLeaf, a customer intelligence consultancy. He has more than 13 years of experience in database marketing, business intelligence and customer analytics, as well as customer and marketing strategy, customer experience optimization, sales force automation and call centers. He can be reached at larry@amberleaf.net.



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