Let’s All Hope that Don Dodge is Right

Just finished getting through the backlog of my Don Dodge RSS feed today and I’m happy to report that venture capitalists seems to think that businesses like Istobe are about to break out. Let me qualify that. Venture capitalists seem to think that using data to improve e-commerce is an industry that clearly needs some maturing and that maturing time is nigh. Istobe represents that maturing, combining hundreds of models and data integration routines into a package that lets you target the right customer with the right product at the right time.

Investors believe that the maturation in this industry will occur in the next five years. Well, so does Istobe. We believe that it’s time to put your data to use. If you don’t use it, data is no more than the new shelfware: that software you just had to have before you realized you lacked the in-house talent to unlock its value. Istobe is your outsourced in-house data analysis talent that lets you ask simple questions and get answers without analysis, questions like: I need to sell this overstock of shirts, to whom should I market them? In reply, Istobe gives you a list of your customers that are most likely to buy your shirts and the probability that they will buy. This is the new paradigm in predictive modeling that Gartner calls the data mining packaged application. Let’s just take a quick look at the moment in time at which we are poised.

Data collection methods are clearly refined

Nowadays, everyone is sitting on a pile of customer data that they don’t know what to do with. As Rob Hayes, partner at First Round Capital, says in the Stefanie Olsen article from which Dodge draws his inspiration, “Everyone talks about all the data that’s being created and how valuable it is, but the way you make it available is by doing something actionable with it.” The glut of data is due, in part, to years of CRM implementations and the current CRM zeitgeist. You can’t turn around without being inundated by a flood of marketing for “next generation” CRM systems. In fact, I used to be one of those marketers at a not-too-small company that builds Dynamics CRM.

Of course, online everything has made data more prevalent as well. Returning some kind - any kind - of functionality in exchange for your profile is no longer new hat. Every widget and social network known to man requires you to divulge information before you start using it. And then it collects your clickstream as you use the app. Heck, I’ve got at least 50 different login/pass pairs that I need to remember now.

Purchases, as well, fall into this category. With online shopping increasing at a terrifying clip, all of your purchases are more seamlessly collected and tied to your profile and your clickstream, meaning that now, more than ever; pre-purchase behavior and purchaser characteristics - on a large scale - are at a marketer’s fingertips.

Data analysis tools have matured but haven’t turned the corner

So there are various types of data out there right now that need tying together and, ultimately, analysis. But have the tools to merge and make sense of that data improved? Not appreciably. Really, when you get right down to it, the tools used to perform data analysis are still catch-all tools that can build any model you want or merge any type of data you want. But they can’t help you with specific business problems. In other words, the tools exist for database experts (data integration) and PhD statisticians (statistical modeling tools).

For years, these tools have gotten easier for experts to use but haven’t gotten any easier for business users. This means that your $300K worth of in-house data integrators and PhD statisticians have become slightly more productive over time but translating their language into the language of business is as difficult as ever. And turning the data they spit out into a meaningful business strategy is just as tough.

Tags: Clickthrough, crosssell, customer analysis, Data Integration, email, Predictive Analytics, Transactional Data

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This entry was posted on Monday, August 11th, 2008 at 8:39 pm and is filed under Clickthrough, Customer Analytics, Data Integration, Email Marketing, Predictive Analytics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.