Tuesday, February 12, 2008

Outsourcing analytics helps provide a high level of expertise

Source : www.btobonline.com

Marketing has to be able to show it knows the customer better than anyone. It's a new measure of marketing, centered on customer affinity and individual life cycle marketing, which is all database-driven. It's the whole issue of retention, targeting, segmenting and investing in customer data integration. But marketers by and large are flying blind. They cook up these campaigns but are not using customer data to make smarter decisions. They don't know who their most profitable customers are, so they need help.

Today, you can go to a company like Mu Sigma and outsource all your analytics to India, gaining insights from hundreds of mathematicians. Compared to database maintenance, analytics requires a higher level of expertise, where you're crunching a lot of data and extracting correlations, running models, simulations, scenarios and predictive models. Not all marketing departments can afford that, so it's a big opportunity for outsourcing companies.

If marketers invest in acquiring the data and unifying them, in having the tools to gain extra knowledge, they'll be far more equipped to make the argument for what should be done. They can say, "This is what the data are showing us. We need to add support here, modify our products there, change prices over there." That is a big shift; companies are becoming very focused on marketing performance management. Further, the joy of digital marketing programs is that you can constantly recalibrate and adjust.

What's happening is the dollars are moving agency expenditures to new hybrid hosted-solution providers. There's off-the-shelf middleware that helps integrate database mining, provided by people like SAS, SAP, Oracle and lots of niche providers. And of course you can outsource this expertise as well.