The relentless rise of database marketing and accompanying analytics is underscored by a new survey by Alterian, the U.K.-based marketing platform provider. The annual poll, Alterian's fifth, revealed that 67% of survey takers are allocating additional hiring resources to this area, versus just 42% who intend to hire online-marketing expertise.
Alterian conducted its latest study throughout October and November 2007, surveying 852 marketers, marketing service providers, agencies and system integrators, both in person at the Direct Marketing Association Conference and Exhibition in Chicago and electronically via a dedicated Alterian Web site landing page.
The findings verify that marketers want better data to inform their subsequent digital campaigns, said Alterian CMO Jason McNamara.
"Chief marketing officers realize their decisions need to be analytically led if they expect their online programs to improve customer experiences," said McNamara, who is based in Los Angeles. "This is a journey that marketers are on, to improve `customer-centricity.' "
The growing emphasis on database marketing and analytics carries with it a conundrum: The two areas of expertise, while joined—analytics is what you do to databases to extract meaning and predictions—require very separate skill sets. One result is outside vendors bringing these disciplines together into a single package.
Extraprise, for example, offers a marketing platform that links disparate programs—Salesforce.com or the various Siebel Systems marketing and sales packages—together with database programs, list-cleansing applications and Alterian analytics. Add a reporting and database tool and the circle is complete.
For companies with smaller marketing budgets, Mu Sigma outsources analytics expertise to a cadre of 300 mathematicians in India.
"Our business model is simple: the use of quantitative sciences in creative things like marketing," said Mu Sigma CEO Dhiraj Rajaram. "And in India we can do it at one-sixth the rate you would pay in the U.S."
Mu Sigma uses statistical tools from such providers as SAS and SPSS, combined with business intelligence programs from companies such as Business Objects, Cognos and Unica.
"We're agnostic about the tool," Rajaram said. "It's not the tool that's important, it's the method."
Mu Sigma's emphasis on ROI as a function of marketing spend is echoed by Entellium, whose Rave product combines database marketing, analytics and sales force automation. Entellium's flagship product, eSalesForce, uses an SAS model, a Hoover's database and CRM capabilities, all presented in a user interface reminiscent of a video game.
Flexicom, a fast-growing reseller of Verizon wireless products to businesses as well as individuals, uses Entellium's hosted tool to analyze its in-house customer database.
"We're a little new to the game, only about a year into it, but it's definitely enabled us to take our customer database very seriously," said Anthony Snare, director of customer retention at Flexicom, which has 54 locations. "We always focused on customer service, but never had a direct indicator of its payoff. Now we're able to see the retention percentages in each of our zones, so we can forecast revenue on a residual basis."
That in turn, Snare said, allows Flexicom to decide how much in the way of resources to devote to acquiring new business, which has led to increased profitability. It illustrates how database marketing and analytics is penetrating down to the SMB level.
The connected world, said Alterian's McNamara, means "we are all database marketers. The CMO's battle is in the trenches, turning the connected world and the vast amounts of data it gives us into value for both the company and the customer."