Can LTV Really Replace Product-Based Metrics?

For some time now, I’ve been touting lifetime value as the magic cure-all for customer management programs. I still believe LTV is the essential foundation but recognize that product-oriented measurement will not simply vanish once LTV appears. As long products are what people purchase, companies will need product managers to nurture them and will create product-level profit statements to judge their performance. I’m tempted to wave my LTV magic wand and argue that products themselves could be measured on their LTV contribution rather than traditional...

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The Downside of On-Demand

Several thoughts are swirling through my mind just now. Some are actually printable. One is this notion of “on demand” customer analytics, and what it says about the concept of “on demand” software in general. The other is the separation of analytic and execution systems, a fundamental distinction that seems increasingly questionable.Thoughts of on demand analytics are of course prompted by yesterday’s purchase of Loyalty Matrix by Responsys, which Responsys described as a step toward becoming an “on demand marketing company.” Loyalty Matrix...

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Responsys Buys Loyalty Matrix

Speaking of integrated systems, consider yesterday’s announcement that email marketing provider Responsys has purchased Loyalty Matrix, which offers on-demand marketng analytics. According to the press release, Responsys hopes to become “the only on-demand marketing company capable of helping marketers not only deliver – but predict and deliver – the right messages to each customer, via email, direct mail and mobile.”It’s tempting to read this as part of the on-going consolidation within the digital marketing industry, related to the Omniture/Touch...

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Which Comes First, The Test or the Metric?

A Web marketer commented to me recently that he thought his firm should focus first on basic “blocking and tackling” before moving on to more sophisticated efforts. When I asked what he considered basic, he said analyses like understanding customer value. He considered the advanced projects to be things like site optimization and multi-variate testing.My initial reaction was that he had it backwards. To me, it seems harder to assemble accurate customer data across multiple channels and systems than to implement off-the-shelf testing software....

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Customer Experience Management Isn't Enough

Ron Shevlin’s comment on yesterday’s post concludes that “without more disruptive changes (re-org and fundamental change in strategy) -- even starting with a focus on the "customer experience" won't guarantee a sustained change.”Ron is absolutely right and the implications are worth considering. “Customer experience” and “customer experience management” are not goals in themselves. They are ways to understand and run a business. People adopt them because they make the business more profitable than alternative techniques. If you don’t think...

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BAI Banking Strategies Article Shows Importance of Managing Complexity

Last Thursday’s post on ad hoc analytical systems prompted an interesting set of comments about overcoming product-based organization at banks. As it happens, the BAI’s online Banking Strategies magazine published a related article last November, called Uncovering the Hidden Cost of Complexity. The article starts by suggesting that customer focus causes the product proliferation that makes good customer experiences so difficult to create: “As banks became more customer-focused over the last decade, they expanded their product set rapidly.”...

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Experian Buys Hitwise to Track Web Audiences

It’s hard to find a short label for Experian, whose business is to gather data about people and companies and then use it for credit reports and marketing. The company’s Marketing Solutions group offers database building, targeting and message delivery for direct mail and electronic channels, as well as syndicated consumer research. Other groups track consumer and business credit, automobile ownership information, and online services for consumers.Between its own online products and the online marketing services it offers its customers, Experian...

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Are System Requirements Obsolete? (Probably not, but that should get your attention.)

I often joke about how easy it is to take two or three loosely related bits of information and declare them a trend. But there’s also an opposing tendency to think that nothing fundamental ever really changes. This makes it harder to recognize significant developments when they do occur.One of those fundamentals has always been the need to define requirements before building or selecting a system. But I’m beginning to suspect that has changed. In systems, we see methodologies like “extreme programming” that advocate incremental development...

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Overcoming the Real Roadblock to Customer-Centric Management

A marketer who understands the need for customer-based management told me yesterday that the biggest obstacle to adoption is the intense product orientation of her business. That sounded familiar: I heard exactly the same thing last December at the National Center for Database Marketing in December (see my December 13 post).Her comments were a useful dose of reality. It’s easy to forget that lack of customer-centric technology and skills are not the main obstacles to customer-based marketing. And, even though I can give you a detailed explanation...

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Knotice Integrates Digital Channels: Too Much, Too Little, or Just Right?

My research into mobile marketing systems generated a conversation last week with Brian Deagan, CEO of Knotice. As I wrote on April 3, Knotice stands out because it promises to integrate mobile marketing with email, Web and interactive TV campaigns. Brian confirmed that this is their specialty.According to Brian, Knotice bases its claim on three capabilities:- users can create interactive campaigns in all four media from the same system- campaigns in all media access a shared customer profile- medium-specific message templates can draw on “medium-agnostic”...

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More Details on Enpocket

I had a brief but enlightening chat last week with Mike Baker, CEO of Enpocket. Mike clarified that Enpocket is as marketing services agency, which means its software is only used for its own services clients. He also said that Enpocket does indeed offer interactive messaging capabilities like voting, polling, surveys, coupons, store finders and such, even though its Web site may not highlight the fact. Mike called such services “table stakes” for companies who want to compete in this field, which is why they’re barely worth mentioning. (I’ve...

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Beware Distributed Analytics (You Read It Here First)

What might be called the “standard model” of business intelligence systems boils down to this: many operational sources feed data into a central repository which in turn supports analytical, reporting and operational systems. A refinement of the model divides the central repository into a data warehouse structured for analysis and an operational data store used for immediate access. (Come to think of it, I don’t see the term “operational data store” used much anymore—have I just stopped looking or did I miss the memo that renamed it?) No one...

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Operational Systems Should Be Designed with Testing in Mind

A direct marketing client pointed out to me recently that it can be very difficult to set up tests in operational systems. There is no small irony in this. Direct marketers have always prided themselves on their ability to test what they do, in pointed contrast to the barely measurable results of conventional media. But his point was well taken. Although it’s fairly easy to set up tests for direct marketing promotions, testing customer treatments delivered through operational systems such as order processing is much more difficult. Those systems...

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Mobile Marketing Systems Can't Stand Alone For Long

My recent exploration of mobile marketing systems left me wondering whether why the enterprise marketing systems have not jumped to service this market. By “enterprise marketing” vendors, I mean Unica, SAS, Teradata, Alterian, SmartFocus and the like. Their products can already create messages in SMS and (presumably) other mobile formats. But so far as I know, they lack the advanced mobile capabilities for ad serving, voting and polling, downloads such as ring tones, and user-initiated content uploads. It probably wouldn’t be too hard to add...

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Skytide Simplifies Customer Experience Analysis

Last Thursday’s post made a passing reference to Skytide , a vendor which may not be familiar to many readers. Here’s a bit more information, based on conversations with the company.Essentially, Skytide extracts and aggregates user-selected elements from large data streams, such as Web logs or call center history files. The aggregated data is stored in a multi-dimensional structure where it can be accessed by the Skytide analyst’s workbench or by third party tools through JDBC, MDX and the system’s own API. So far this sounds like other multi-dimensional...

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Advertisers Must Help Marketers To Build Relationships

Today’s New York Times reports that cable TV networks are balking at an eBay-built auction site to sell their advertising (“For Cable TV, No Interest in Selling Ads The eBay Way”, page C3, The New York Times, April 6, 2007). The networks’ justification is that many ads are now sold as part of larger packages, rather than simply on price. The article quotes Cabletelevision Advertising Bureau President Sean Cunningham as saying, “The grand majority is about idea-driven packages that have got multiple consumer touch points.” Mr. Cunningham has access...

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Channel-Specific Analytics Are Doomed: Doomed, I Tell You

Did you ever have one of those crazy dreams, not quite a nightmare, where unrelated things get mixed up together? I felt that way this morning when I was looking at the Web site for one of the mobile marketing systems and saw they had alliances with Web analytics vendors. That rang a bell, but it took a while for me to realize that I had been writing about consolidation in the Web marketing space separately from mobile marketing. The confusion is compounded by my recent look at non-Web analytics system including ClickFox (which gathers interaction...

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Acxiom Digital Buys Kefta for Web Page Personalization

It doesn’t take a crystal ball to foresee continuing consolidation among online marketing systems vendors. Today, email specialist Acxiom Digital announced it is purchasing Web targeting specialist Kefta. In February, the news was Web analytics vendor Omniture buying behavioral targeting vendor TouchClarity . The Acxiom Digital / Kefta match up is somewhat more interesting because it combines email and Web channels. Omniture and TouchClarity were both primarily Web specialists. Of course, marketers are increasingly interested in synchronizing...

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Differences Among Mobile Marketing Systems

You may have thought from last Friday’s post that I had merely gathered the names of mobile marketing software vendors. Au contraire. That list was based on a close parsing of the relevant Web sites. (And if it’s on the Web, it might be true, right?) Now that I’ve had some time to sift through the materials I assembled, it’s possible to make some more precise observations about what differentiates the different systems.1. Voting vs. Ad Serving: this seems to be the Great Divide. Of the seven products that seem to be serious marketing systems...

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Deltalytics' Lloyd Merriam Comments on LTV

My friend Lloyd Merriam has left a thoughtful comment on last week's post about Lifetime Value. It's worth treating as a post of its own. Here's Lloyd:I completely agree that customer lifetime value (LTV) is the single metric against which all strategic business decisions should be evaluated. Although non-trivial, determining the current value of a customer isn’t particularly challenging. Calculating future LTV – which, as you know, is what really matters – is neither simple nor straight forward. LTV is driven by lifetime duration (LTD) and future...

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