The calendar says it’s Tuesday, but I’m thinking it’s Analytics Day. So far today, I’ve had in-depth conversations with two very large providers of marketing analytics services.
The message from both firms is very similar: We’re living in a world where “competing on analytics” is a strategic imperative. The firms that best utilize data to understand customer needs will be the ones that survive and thrive.
And, of course, both firms provide “unsurpassed” and “unprecedented” capabilities in helping their clients analyze data to improve acquisition and retention efforts. Both talked about the analytic models they develop (that no one else can or has) for their clients.
To be honest, I wasn’t as interested in the two vendors’ ability to develop models as I was in what their clients did with the data and analyses that the vendors provided. When I asked about this, the response was similar: The clients use the data and analyses to improve their targeting and customize their messaging.
That answer wasn’t good enough of me, so I probed further: HOW did their client firms use the data and analyses to improve targeting and messaging?
What I was fishing for was: Did the clients integrate the output of the models and analyses back into customer databases? Did the models and analyses drive customized messaging on the clients’ (predominantly banks and credit card issuers) web sites when the FIs’ customers were accessing accounts? Did the clients use the output to drive targeting and messaging on outbound marketing campaigns through direct mail and email channels?
The responses weren’t nearly as detailed and involved regarding what the clients did with the data/models as they were regarding what the vendors did to create the models and analyses in the first place.
Marketing departments need to develop a new competency — a sense and respond competency: The ability to sense a customer’s or prospect’s needs and where s/he is in the customer lifecycle, and the ability to respond with the appropriate offer, advice, or guidance.
From my conversations, I’m not sure that the analytics folks understand that there are two sides to the coin.
It’s great that you can analyze your customers’ debit card spending, and identify the trends in their spending, and predict what they will buy. But without the ability to reach those customers with an offer — in a timely manner, and in a channel where they’ll actually see the message — the analytics (or “sensing”) is akin to a tree that falls in the forest where there’s no around to hear it. Did it make noise? Who cares? It doesn’t matter.
Analytics vendors are missing the boat here. They’re so focused on doing the analysis and creating the models, that they’re failing to recognize that FIs (banks and credit unions, in particular) are wrestling with how to develop a new — and sustainable — marketing competency.
Many mid-sized banks, and credit unions of all sizes, would love to improve their use of customer data to make better marketing and business decisions. But they don’t want to simply do one-off projects that create and execute a single campaign. And they don’t want to simply deploy some technology solution. The technology solution might be great at supporting an analytics function and process, but for most of these mid-sized FIs, there is no function or process.
What will happen to the vendors that figure this out and develop a solution that helps FIs create a sustainable analytics — no, make that sense and respond — capability? I’m betting that they’ll be the ones that survive and thrive.