Several years ago, US Bank wanted to improve its uplift modeling, an analytical method for finding the incremental impact of targeted marketing activities.
"It's a very difficult modeling objective," said Jane
As an alternative, US Bank turned to Portrait Software, an analytics software vendor, for its Uplift Optimizer and saw some good results. Those results were particularly strong in its Direct Deposit accounts, where it saw a 73% increase in incremental accounts opened from a single campaign, along with a 32% reduction in mailing volumes.
US Bank, with about 30 people in its marketing department, quickly expanded the project to other direct marketing initiatives.
"We started with the credit products and rolled the modeling out to the deposit side of the house, and we had a terrific year with the first year of uplift modeling," Muelhapt said.
Analytics are a ripe area for investment, particularly in the CRM arena. According to a recent Accenture survey, 31% of U.S. respondents and 34% of respondents in the U.K. and Ireland are targeting their analytics investments in sales, marketing and CRM. Additionally, when asked about the primary function of analytics efforts, 33% listed CRM, just behind the 35% who reported focusing on finance.
Seeing that demand, Accenture recently entered into a partnership with the SAS Institute to jointly develop, implement and manage predictive analytics software, building on its own experience with the technology.
"Whether it was in the management consulting or technology groups, we concluded that analytics was everywhere and nowhere," said Dave Rich, global head of analytics for Accenture, noting his firm's experience implementing infrastructure and ERP, CRM and SCM applications. "What we really needed to focus on next was how [to] help clients extract more value out of the underlying technology. It was pretty clear, pretty obvious we wanted to focus on predictive analytics."
IBM obviously sees a developing market for analytics as well, scooping up SPSS last summer. Oracle saw it way back when it acquired Siebel, citing Siebel's burgeoning analytics business as one of the main reasons for the deal.
Rich, not so coincidentally, is also head of Accenture's CRM practice. Many organizations are looking at analytics to improve the customer experience.
"Clearly, as you know, circumstance is everything," Rich said. "Last year was all about cost and cash management. Analytics was around the balance sheet. This year is all about driving growth, and that happens to be in the CRM space."
That doesn't necessarily mean that companies need to spend big on new analytics applications, however. Many CRM systems have at least some analytics functionality embedded into their software.
"This is sort of heresy, but there is a good business case for using some of these embedded business analytics tools," said Jill Dyche, co-founder of Baseline Consulting. "The issue is these operational CRM systems were not necessarily designed to be the proverbial 'single version of the truth,' so it's a lot more difficult to get non-native data into those systems."
Most organizations want to run analytics, even customer-centric analytics, on data that sits outside the CRM system – purchase history, for example.
"Who are my net new customers that signed up yesterday? That's a great question for a native operational CRM technology," Dyche said. "What's customer A's value over time given their product mix? That’s a really hard question to answer."
James Kobielus, analyst with Cambridge, Mass.-based Forrester Research, has begun researching the market for data mining and predictive analytics separately from the BI market. Companies investing in CRM analytics need to determine their maturity with analytics.
"[Companies should look at embedded analytics] if they've never done data mining before and they want to get into this and offer this capability to information workers and business analysts and grow their data mining ‘light’ practice," Kobielus said. "If they're using BI, and the BI vendor offers this capability integrated with visualization tools, then evaluate that."
Accenture's efforts also do not necessarily require gutting existing systems and starting over.
"Our take is -- if you don't have technology, you need to fix it, but it's not a technology rip out," Rich said. "It's a way to strip more out of existing systems."