Intelligence In The Here And Now

To deliver a decisive competitive advantage, data intelligence must impact the customer right now. Harrah's and Churchill Downs profit by applying data warehousing and predictive analytics to marketing and high-touch opperations.

Predictive analytics, or the application of data mining algorithms to discover patterns in data is already a competitive advantage for large organizations on the cutting edge (see the accompanying Field Report on Churchill Downs). IDC predicts that the software, offered by Computer Associates, KXEN, SAS, SPSS and others, will steadily attract customers in 2005. What makes predictive analytics different from traditional BI analysis is that you're letting the data do the talking. As opposed to BI queries that specify desired results, predictive analytics software leads a discovery process. The algorithms tap carefully managed data warehouses and other resources to uncover patterns and data relationships that help companies predict their most profitable customers, how pricing and product packaging might affect buying decisions and much more.

Of course, for customers, the future is right now. Predictive analytics, operational CRM and other methods are at their best when they enable companies to deliver a richer customer experience tailored to their immediate interests. With customer loyalty assured, the future will always be bright.


Actionable Intelligence for CRM

The Brief
»CRM applications hit a wall if businesses don't leverage data resources to reveal customer behavior. IT must design and implement high-performance, integrated customer intelligence and deliver it to the right person, in the right form, at the right time. "Right time" is critical to marketing process automation, which depends on accurate, event-driven intelligence. Give predictive analytics careful consideration; they may offer a data-driven strategic edge, helping you identify your best customers and take action to keep them loyal.

»Go with enterprise BI over simple reporting offered by CRM packages. If customer data volume and query demands outgrow what's offered within your CRM system, replace it with a scalable BI infrastructure.
»Develop "operational" data warehousing. CRM reaches its full potential when employees have actionable intelligence to address ongoing customer interaction. Data streaming and trickle feeds can complement batch loading; enterprise business integration and message-oriented middleware support streaming.
»Employ customer data hub, CDI or enterprise information integration (EII) software. As operational sources proliferate, federated query access may deliver the single customer view faster and with fewer integration headaches than traditional ETL and data warehousing. Customer data hubs, CDI and EII generally focus on metadata integration, which may prove useful for global business integration.
»Dive into predictive analytics. If you have diverse, quality data to work with, you could be ready to exploit advanced analytics-and to let data shape how you enhance the customer experience.

»How good is your data? You can't go far without high-quality data. Address problems at the source or plan to cleanse data later in the process.
»How broad is the user base for customer intelligence? Match CDI and analytics to the business areas that need it. Your CRM package may provide everything you need.
»Does business success depend on customer loyalty and better return on customer? If so, predictive analytics may help you gain a competitive edge.

Action Items
»Address CDI needs. Define how you will integrate data resources to deliver a single view of the customer. Remember to look at all channels, including self-service.
»Move to "right time" information delivery. Enable sales, marketing and service to engage in richer, more knowledgeable customer interaction.
»Use data to reshape customer experiences. Predictive analytics can uncover buying and behavior patterns that will help you respond to customer interests before your competitors do.