Commentary

What Is Business Intelligence?

You'll find Business Intelligence thrumming in the depths of most organizations. Business Intelligence is the collective term for the data and insights executives need to make business decisions.

However, there is an emerging trend in the CRM and Database Marketing space to redefine Business Intelligence and how it supports the business. According to the new approach, it is about more than just making decisions. Simply put, management has a tendency to make decisions based on intuition, rather than empirical means; and if Forrester's 2003-2004 predictions about left brain marketing evolve, more organizations, technologies and views of the customer will be centered on this practice.

Most organizations we see either can't get access to the data they want, or the data doesn't exist, or it's in the wrong format. To provide you with motivation for change, I'm going to explain how Business Intelligence brings value to the organization and what the connection is with our coveted e-mail channel.

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Let's start with the fundamental value that Business Intelligence can bring to a marketing organization. It:

  • Helps in building out customer/consumer profiles.
  • Helps build and isolate key events and the value they bring to your business.
  • Helps in understanding the interdependencies among your marketing systems.
  • Helps in developing a monetary scorecard for interactions.
  • Helps define a method of evaluation that is tied to business value ($$).
  • Helps define dashboard requirements that makes these "view-throughs" of the consumer more accessible by departments in the organization.

    All things of interest to most of us, right? Different verticals care about different customer dimensions. Retailers look at transactional data. Airlines look at performance, routing and loyalty considerations. Financial services companies model funnel movement characteristics. From a horizontal perspective, brand marketers focus on response and core values-based segmentation. Many of these folks miss the connection among campaign response, advertising response/source, response to retention programs, and Web site behavior, as well as all the personal data that helps define the target "who." So where does Business Intelligence fit and how does the e-mail channel help support this?

    E-mail systems today have tried to fulfill the need for direct response data, conversion data, Web activity caused by direct campaigns; they also report based on segmentation, source and value. This transaction-driven environment has become more and more important to marketers because it gives them one of the few available snapshots of response/conversion and Web activity tied to an initial intent, all in one view. Few have a consolidated view of these interactions, and even fewer have developed a means of putting weights on these interactions.

    The e-mail channel presents a "poor man's" version of Business Intelligence, helping to justify investments in segmentation, promotional strategies and advanced analytics (not to mention the advantage of real-time reporting that you get with e-mail). We've evolved reporting to accommodate conversion tracking--what people purchased or signed up for--to individual transactions then parsed by customer segment, source and lifetime value. In addition, we do path analysis driven by e-mail campaigns, essentially what site behavior was associated with the e-mail campaign at a very individual view. This "transactional" view that lives outside most in-house database environments can give you more meaningful insights of Business Intelligence than advanced analytics.

    Many of the challenges marketers will face this decade will be tying the effort to the interaction, and building a story around this value. The testament of good business intelligence is that of repeatable processes. It can't take three to four weeks to generate a report; data must be visible to different groups based on different needs and it must be accessible in multiple formats, yet someone must be able to interpret its meaning to the organization.

    The moral of this story is: build a vision for what Business Intelligence will mean to your business, and articulate it internally. CFOs will be asking about it in 2007, if they haven't started already. Investigate how you are set up to support the technology requirements, the resource needs, the organizational needs and the leadership needs for this view of the business.

    There are many good sources for more information on Business Intelligence. If you'd like to learn more, e-mail me (at DBaker@agency.com) and I'll happily forward several links to articles on the subject.

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