analytics

12月 172010
 
Every night, I drive right by our favorite grocery store on my way home from work, so I usually call home to see if we need anything. Sometimes the list gets long and I have to pull over to write it all down. That’s how I manage our grocery list. It’s very low tech – but it works. And then there’s Catalina Marketing, which analyzes over 23 Billion customer transaction records every year (that’s over 63 million records daily). They use a different method to manage their lists (more on that below).

Many of us may not realize that Catalina Marketing is the company that provides those little point-of-sale coupons that print out at the cash register (often in a grocery store). They are the largest customer behavior marketing company in the world and they analyze all those transaction records on behalf of the stores so that you can get relevant, valuable offers based on who you are and what you do.

During a recent Webinar we produced with Netezza, we invited Ryan Carr from Catalina to showcase how they manage their business to enable better and faster processing. It’s a fascinating study in how strategic customer analytics can be to a business. With the right process changes and computing investments, Catalina has enabled their tremendous growth by creating real value for both their clients and their client’s shoppers.

As recently as five years ago, Catalina had customer transaction models of about 1 million records, or 40 Mb of data, which were processed on 1 CPU running SAS with 500 Gb of disk space. After 16 – 20 weeks of processing, they had good results and could make accurate predictions, but it was limited to the scope of the model. Today, their models are as big as 140 trillion (yes, with a "T" ) records, or 800 Terabytes of “virtual” data, which are processed on over 400 CPUs running SAS and Netezza with 120 Terabytes of physical disk space. Those models might run for a total of 3 days, and the results are excellent for a few key reasons.

The exponentially faster processing time cut their cost per model, which made the models more widely available to clients. The larger databases and samples allowed more granularity, which means they can look at common situations and also extremely rare events and deliver more accurate insights so the store can know what kind of customer will most want a particular offer. These quality improvements have translated into real results as they moved from 40% improvements in response rates on a smaller scale to response rate improvements of over 600% on a much larger scale. In other words, Catalina used to be known for applying behavioral targeting to enable stores to sell about 40% more of a particular product to a particular target market. Now, they’ve gotten so good at it that their customers now sell as much as 600% more product to that same group of people.

That’s what I call managing a list! Everyone gets something from the deal - the store sells more, the customers get better offers and Catalina just gets better and better at what it does best. Take a moment to view the on-demand version of this Webinar and hear how artful the science of marketing can be.

You can also learn more about Catalina Marketing with their customer success story.
12月 152010
 
Predictive analytics is not the easiest concept to wrap your head around. It’s all too easy to get lost in explanations about statistics, game theory, modeling, and the rest, and end up with a muddy understanding of a process that draws on historical facts, like customer data, to make predictions about the future.

A recent article in the MIT Technology Review, What Will Your Customers Buy Next?, does a great job explaining the business results delivered by predictive analytics, by highlighting an example of how Cabela’s (a SAS customer) uses predictive models to rank customers and better decide which customers should receive which catalogs. The article reports that “Since introducing the model, Cabela's has quadrupled the rate of responses to its catalogue.” That’s good stuff.

Click through the links below to read the full article, and to read a success story on how SAS helps Cabela’s reel in more customers.

More information
11月 092010
 
I’m excited to publish a new segment of our “Nuts & Bolts of Social Media” video series. In this interview, SAS’ Deb Orton, host of this series, talks with Bernie Brennan and Lori Schafer, co-authors of the recently released book Branded! How Retailers Engage Consumers with Social Media and Mobility.

While the amount of material made for a more detailed interview than we normally show, it’s so engaging and informative that shortening it would have been short-changing you. I hope you’ll agree.

The interview begins with Lori telling us that this book was written because “…our society is undergoing a change in communication that none of us have ever seen before,” and that they, Lori and Bernie, each saw an opportunity to educate the industry by telling a number of great strategic stories. The title, says Bernie, came about because “…retailers today are becoming brands,” and that’s the whole focus—because a well-branded retailer will bring in customers instead of consumers. What’s the difference? A customer is someone who returns regularly and has a relationship with a retailer. While a consumer does not. There is no mistaking which type of person buys more.

The interview moves to the topics of engagement and how the co-authors secured so many executive interviews. While talking about how our current digital/online era is different than the older dot-com era, Bernie summed it up by saying we’ve progressed “…from a one-way communication to an interactive communication that everyone is involved in.” And this is not something to be feared, the companies interviewed for Branded! each saw this interactive, the-customer-is-in-charge evolution as a positive progression.

Before wrapping up, the three talked about data and Analytics, a discussion I find particularly interesting. Bernie and Lori explained that retailers started with technology decades ago to streamline and standardize their processes – but the real value comes when you add analytics to bring insight to the data this technology captures and produces. Social media and mobility will be no different. We now see social media analytics solutions showing up to help us monitor online conversations and understand customer sentiment, allowing us to react to customer needs and desires faster than we’ve ever been able too. “We’re still at the beginning of this,” says Lori. “This is clearly going to be very big in the next couple of years.”

We hope you enjoy the video!


11月 012010
 
Coming off a week of U.S. West Coast conferences, I have finally caught my breath and readjusted to my home time zone here in North Carolina.

The week started in San Diego at the Teradata Partners conference, where the mood was upbeat and the sessions abuzz with the success that companies are experiencing with In-database Analytics. The conference theme was "Innovate to Differentiate" and they did not disappoint. Presenters delivered session after session of company case studies; nineteen of which SAS and Teradata hosted.

Of course, as a SAS Marketer, I was pleased with the number of mentions of SAS as the ideal Analytics engine for these remarkable feats, utilizing huge quantities of data for business insights.

Tuesday brought another flight and another conference. This time to Las Vegas, and the Premier Business Leadership Series, sponsored by SAS. This conference is several years running and never disappoints. The 2010 theme was Innovate, Optimize, Transform.

The conference kicked off with a discussion of the global economy with two renowned economists, Linda Yueh and Dr. Sung Won Sohn. While they did not agree on everything, both were cautiously optimistic about the US economy noting that we are experiencing growth, albeit slow. Vijay Govindarajan then provided a successful model for innovation and the execution of transformative ideas. Video of these presentations are available at the PBLS website, along with blogs and tweets from the conference.

I have participated as a host, speaker and moderator with this conference for the last three years. This year was different.
Business Analytics was not simply an academic discussion, but one of substance. Companies were sharing their success and asking questions of each other, and SAS, that demonstrated a deep understanding and interest in "what's next" in Analytics, rarely, "how do I get started".

Empowerment, in the form of distributed Analytics tools, was a common discussion among speakers. I picked this up from case study speakers when asked how they are able to accomplish so much with limited staffing. Analytics Centers of Excellence have formed, sometimes within departments and other times across departments. These centers are empowering departments with tools to answer many of their own analytical and reporting needs, while taking on the heavy-lifting of more complex insights within the Center of Excellence.

Innovation and empowerment, often driven by In-Database Analytics. Something to build on as our economy recovers and grows.