My colleague at Fair Isaac, Jeff Zabin - noted marketing author and bon vivant - has been publishing a quarterly newsletter for Fair Isaac's Precision Marketing Group. Aptly it is called Marketing Decisions, since it focuses on the application of Enterprise Decision Management techniques to the marketing domain.
Marketing Decisions provides us with a great opportunity to showcase the great work that is being done by firms such as Best Buy, Con Agra, and even ersatz marching band Mannheim Steamroller, in apply rules and analytics to improve the precision, consistency, and agility of marketing decision-making. (Also make sure to check out Jeff's Blog.)
The most recent edition of Marketing Decisions features a white paper ("Delivering the Branded Customer Experience") authored by James Taylor and published in Montgomery Research's CRM Project. James argues that Enterprise Decision Management has an essential contribution to make in helping companies realize the much vaunted, but infrequently realized, value of Customer Relationship Management.
James suggests that there are - at least - three areas ways in which EDM can automated marketing-related decisions. The areas of decision-making are:
- Decisions that employ “deep personalization” to ensure customers get the right offers and treatment and that they are rewarded for sharing information.
- Decisions made at the point of contact with the customer, regardless of channel.
- Decisions related to self-service where customers want immediate answers.
I think all three points are very valid, but today I would particularly like to emphasize the first and second.
From the 1950s, and even into the ‘60s and ‘70s, the formula for success in consumer packaged goods was simple: Spend lavishly on broadcast media advertising and your sales will grow inexorably. Companies prospered in this environment, based on huge advertising expenditures, coupled with high quality, creative advertising and frequent product innovation.
But from the 1980s onward, the advertising environment became increasingly more complex and challenging. First, the introduction of cable and satellite television fragmented what had been a previously concentrated set of media outlets, making mass audiences much more difficult to reach. Second, media companies, recognizing that they controlled access to a scarce resource, pushed up the CPM (cost per thousand impressions) rates.
And now, in the 21st century, consumers simply spend less time being exposed to broadcast advertising of any form. Either they are skipping over commercials, through the use of digital video recording (DVR) systems, or they have shifted their viewing time into other activities, such as computer gaming and the Internet. As such, the only real way to successfully engage a young, affluent consumer nowadays is to present relevant and valuable messages and offers at a time and through channels that suit them best.
This is not a pipedream. A major consumer packaged goods company recently addressed this very issue by adopting an Enterprise Decision Management solution, which in this particular case, is delivered to them through a DSP (Decision Service Provider) model.
(James has promised to blog on the topic of DSPs in the past, but I don't believe he has, so I think I'm going to be compelled to plug the gap immediately after this post.)
The firm in question uses the DSP as a central global controller of consumers’ interactions with our client’s brand. The DSP dictates the precise nature and sequence of messages, content, and offers presented to consumers across channels and over their lifecycle.
The DSP serves up decisions that are driven by advanced marketing analytics, such as segmentation and scoring. Each decision is based on the millions of comprehensive consumer profiles stored in an associated Customer Data Warehouse.
The DSP is capable of delivering billions of marketing related decisions annually through its use of the Blaze Advisor rules engine. And it delivers these decisions across any of the interactive channels through which a consumer may be exposed to the client’s messaging. Whether it is an SMS delivered to a mobile phone in Canada, an e-mail delivered in Turkey, or an Internet pop up delivered to a teenager in Colorado. The DSP delivers the decision as to what should be done, when, and how.
The firm's marketing strategists and brand managers define rules that describe marketing strategies that vary across segment and across a consumer’s lifecycle. The DSP then dictates the nature, pattern, and sequence of consumer interactions with various touch points, and to dynamically change that experience based on a given consumer’s data profile, as well as the context of the interaction.
More than 7 million consumers are signed up to use this brand's online properties in the US alone; and millions more are registered worldwide. By all measures, the application of Enterprise Decision Management to their marketing challenges has been a huge success.
Who is this firm that has attained so much? Unfortunately, I can't reveal that in this forum. But let me say this:
a.) If I told you their name, you would know them immediately. In fact, chances are you have consumed some its products today - it is an omnipresent brand!
b.) If you came to InterACT - Fair Isaac's Enterprise Decision Management conference, being held this week, you would see a representative from this particular firm present in detail on the success of this program
And that tees up quite nicely what James, Rahul, and I are going to be doing this week. We are in San Francisco right now presenting at and covering the different elements of InterACT. As the mood strikes us, we shall blog on different elements of this conference, which should be a rich seam of material for many days to come!
(My! What a circuitous post!)