Competing of Data … for Competing on Analytics

For those about to compete on analytics – I salute you!

The reference to ACDC isn’t unfounded. After all … data rocks!

If you want to create competitive advantage for your company by using analytics more cleverly than your competitors, then the first question is:

What kind of data will you use for those analytics?

When it comes to customer data, most marketers today have many choices to to pick from. Their (unified or disparate) data marts contain everything from

  • transactions
  • to personal details
  • to marketing contact and response history,
  • and in much too few cases also the web site interaction history of individuals, i.e. web analytics at the personal level

Leaders have found ways of using some of this data to leave the competition in the dust:

  • Online marketers may think of Amazon, for example, or its cousin in the Netherlands:
  • Offline marketers may think of companies such as CapitalOne who grew rapidly thanks to clever direct marketing fueled by analytics (as documented in the book Competing on Analytics.)

Yet at many other companies the customer data unfortunately are sitting idle in the data mart, collecting dust, and are not getting leveraged as well as they could be.

With some imagination, you could visualize the idle data silos talking among themselves and scheming how to get out of their isolation and boredom.

You could say, the data are in a competition with each other to get adopted by the marketer first. For that, each data source needs to make the case that it is the best weapon for the marketer to take with her into the battle against the competition.

“Hey, pick me, I can help you more than the next data silo”

So in the hustle and bustle of the various data sources fighting it out with each other, you might catch following battle cries:

“I am the transaction data”

I come in many forms, for example, shopping baskets at retailers, call data records at Telcos, and account transactions at banks or credit card companies. Since virtually all companies study me already though, it is going to take some more ingenious analytics before you can differentiate yourself using me.

Such distinguished analytics can for example be behavioral event detection, i.e. the detection of changes in individuals’ patterns of behavior. For example, banks do this very successfully by flagging individual customers who may be ready for cross-sales or retention efforts. This may for example be the case when a customer has an unusually large deposit on their bank account relative to the individuals’ personal past deposit averages.

Companies that use me well have increased their marketing success rates 5 to 12 times. So you betcha you can compete using me!

“I am the marketing contact and response history”

Most marketers think of me as just a tactical “log” of past interactions. If at all, I am used for calculating a direct marketing campaign’s response rate.


But in today’s world of multichannel, interactive (or dialog) marketing, I have a much more strategic role to play. Namely, a marketer that doesn’t take me into account is like someone who is talking while turning a deaf ear to the conversation partners’ responses.

Therefore, I am the one who can help you go from mass marketing to interactive (or dialog) marketing. Since few marketers use me well today, you can really compete on analytics with me!

“I am demographics data”

Most companies have some form of me available.

I am often helpful for framing who is in the company’s target audience so that you don’t waste your marketing funds talking to people who won’t buy anything from you anyway.

But I have been around for such a long time, even I can’t remember how you could use me to create a competitive advantage. What can you do with me that your competition isn’t already doing?

“I am the customers’ permission and preference data”

I may seem like a bore at first — after all I represent the customer’s interests and not the marketer’s. But companies that use me well are able to continue the interactive exchange with customers while companies who ignore me lose their permission to market.

For example, leaders in email marketing offer their subscribers not just an “opt-out” but a way to manage for themselves when and how often they wish to be contacted about what. Ditto with RSS marketing. Instead of losing a prospect to an opt-out, you are given a chance to be relevant.

“I am the web analytics data”

Most web marketers package me into reports and good looking dashboards. They use me to make their web sites and advertising more successful.

But since I am used that way by almost everyone already, it is really tough for you to compete on me this way.

You have to be cleverer than that to turn me into gold!


A straight forward but rarely tapped opportunity is to make web analytics personal (download the whitepaper), i.e. to learn about each individual prospect or customers’ current interests as demonstrated by their most recent web site sessions, clicks, and keywords.

This can fuel behavioral targeting, event based marketing, or highly predictive analytics. Marketers can use me to send the right re-marketing, on-boarding, cross-sales or retention recommendation to each customer at the right time.

Companies that use me well today are the leaders in their space, e.g. Amazon, eBay, Verizon, and many others.


So, if you have so many data to choose from which should you pick?

This will depend on your business and your competition. Most likely you have many more than just a single opportunity. And just like any other marketing investment you want to forecast potential returns vs. costs of getting there.

You’d start implementing the opportunity that has the best potential. But you shouldn’t stop there. Rather, all initiatives that promise a lucrative ROI (above your hurdle rate) are worth doing and should be funded. That is the only way in which you will maximize total returns.

So, go ahead, make your business case and your CFO will get you the funds.

Yes, these days many budgets have been cut.

But just today I was hearing from a business intelligence manager at a large client of mine. She made her case for solving a long standing business problem through extremely innovative use of (web) analytics. This was a business problem that the company hadn’t been able to solve through any other means. And sure enough, three weeks ago she got the resources that she wanted.

For those about to compete on analytics, we salute you. You rock!

5 Comments on “Competing of Data … for Competing on Analytics

  1. Akin,
    Great post on using the multitude of data sources.

    On the web analytics data, one of the constraints I see that face many is the fact that many WA vendors store the data collected on their site (offsite for the client) and it becomes a tango for folks to get access to it and use it (sometimes you have pay extra to get access). It is good to have a ‘data plan’ at the time you sign your contract so that you know you can use the data when you need it.

    And considering our space, it is very easy to get bogged down with sheer volumes of data. On this, I have two suggestions: (a) scope out what is really useful to you and try to do an extract of those elements before you hit it with analytics (no need to download every click and event that does not impact analytics), and (b) there are tools and technologies out there that has made storage cheap, try to leverage that (one example of this is the Teradata Extreme Data Appliance (EB 1550)that starts with a 50TB of storage and is relatively inexpensive). I am sure you can find cheap storage on most of the platforms.

    Bottom line, I am in total agreement with you that one can compete on analytics at a whole different level if they can compete on the type and diversity of the data sources (the more you can bring in, the more visibility you have about your customers).

  2. Thank you Ned, that seems like great advice to me. I agree 100% that web analytics buyers should not just evaluate the user interface and reporting capabilities. But they shouldn’t neglect what it is going to take to get to the visitor level interaction history.

    Does it require an extra data warehouse module? Is there a fee for a report level data feed vs. visitors level data feed? Is there a guaranteed time of night when you will receive the feed?

    And biased to Unica’s web analytics solution I may add that of course buyers should also ask whether it is possible to host the web data mart on premises rather than having to deal with feeds alltogether.

    Good points on filtering the data too.

    Yeah, amazing isn’t it. One can have 1TB at home now for the videos etc.

  3. Thanks Akin. There is one simple point which I failed to mention in my first post.

    This might sound common sense to some folks, but you would be amazed at the instances when folks don’t plan ahead and so end up not having a common “key” between the various sources.

    For example, you can have 3 different sources of data — web data, marketing contact data, and transaction data. Without a common key, one can still do analytics ‘in silo’ and leverage useful information that will benefit the company. However, if you are able to link the three sources using a key, the value from the analytics would increase exponentially with the added benefit of having a more complete view of your customer.

  4. Great post. We have our top 5 marketing metrics that all companies needed included in our blog as well. Very useful information.

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