The best gift for retailers this season: analytics

Retail analytics Gilt retailer customer intelligence giftIt’s that time of year again, and I have retail on my mind. Not only because we’re reaching the peak of the holiday buying season, but because we at SAS are getting ready for one the biggest events on our calendar, the National Retail Federation tradeshow in January.

As I’m thinking about retail, I’m thinking about the unique ability of analytics to help drive sales. In some respects, brick-and-mortar retailers have an innate advantage over online stores. They can get to know customers face-to-face and understand sizes, tastes and needs on a personal level. To match that level of knowledge, online retailers must turn to the power of analytics.

One of the fastest-growing retailers in the online world is doing just that. Gilt Groupe is a purveyor of luxury goods not typically found online, such as designer samples and overstocks from 2,000 partner brands. You can find everything from high-end gifts and elegant stocking stuffers to one-of-a-kind luxury experiences. Recently I even saw an offer for a guys’ weekend in the Dominican Republic. Hoping Santa brings me that one.

The products are offered in small quantities and at a steep discount, but only to an exclusive audience and only for a limited time.

As a result, things have to be precise, so Gilt is using SAS® Analytics to better understand what its customers want. Decisions need to happen fast because, at Gilt, a new sale starts every day and is quickly over. The company needs to intimately understand which customers are drawn to the site in order to understand what merchandise will be the most appealing. Fortunately, the data was there. Between demographic data, browsing and shopping history, mobile and transaction data, and marketing history, Gilt had what it needed to get started. But data alone doesn’t equal customer insight.

CEOs and CIOs often learn this lesson the hard way, but Gilt had an analytical mindset early on. The company chose SAS because our solutions can access and combine information from a high number of sources. Gilt also liked the ability to quickly produce reports that were relevant to all facets of its business. I’m happy that the Gilt team recognized our expertise in these areas, but I’m even happier that they’re now taking things to the next level. They’ve scaled up to tackle the more complex analytic challenges, like customizing marketing messages, finding the best customers for cross-sell promotions and helping Gilt's partners understand its shoppers.

I’m glad to say that, thanks to analytics, Gilt is seeing customers browsing in entirely new merchandise categories that it hadn’t previously considered. It’s also seeing new members converting from browsers to shoppers. When analytics was added, the return on investment was positive and immediate.

Gilt tells us they’ve learned three important lessons:

  • Link the data to the business results you want to achieve.
  • Test and measure.
  • Start early with analytics in order to grab the quick wins.

The lesson other retailers can learn from Gilt’s success? Offer a highly personalized customer experience and put analytics at the core. It’s really that simple. And that’s SAS’ gift to retailers. Learn more about the Gilt story. Want to know how other retailers like Macy’s, Chico’s and eBay are using analytics to get big results? Read “3 ways retailers are modernizing with analytics.”

And if you plan to be in New York in January, stop by the SAS booth at Retail’s Big Show 2015, hosted by the National Retail Federation. We’ll be glad to tell you more about how analytics can raise the roof on your retail results. Hope to see you there.

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How do you market to a humbug?

Holiday marketing this year is interesting. With special offers online, competitive shipping rates and more click & collect options, we all know that in-store shopping is no longer the only game in town.

Traditionally, retailers have spent a lot of their marketing budgets trying to draw people into stores on big shopping days like Black Friday, but the best promotions I’m seeing this year are designed to draw more shoppers online.

It makes sense from a business perspective. If you can spread more of the workload and revenues beyond that one day by marketing to consumers with different shopping habits, you don’t have to rely so much on a single shopping day for your holiday forecasts.

But who are these shoppers that might be enticed into spending money online? And what kind of deals are they looking for? We’ve surveyed thousands of consumers to answer those questions – and categorized seven types of shoppers to help you understand their holiday spending habits.

typesofshoppers

I tend to be a mix between a cybershopper and a last-minute hopeful, but my procrastination can also turn me into a humbug. And I admire the practical shoppers who are already done shopping and now have more time to sit back and enjoy their egg nog.

What about you? Are you a perfect gifter? Or a budget buster? And if you’re a marketer, how might you market differently to each of these customer segments?

Here’s an opportunity: Who’s marketing to the humbugs? It may seem counterintuitive to try to sell to the segment that doesn’t even like shopping, but it’s still 5 percent of the population, and they’re still spending more than $900 each this holiday season. If you could come up with a way to corner the market on the humbugs, you could create a nice niche for your business.

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Entrepreneurs, do you really need an exit strategy?

6855692969_920a16e7c8_zYoung entrepreneurs who master the two-minute elevator pitch know the key points to hit include:

  1. Describing an unmet market need.
  2. Explaining how you're uniquely qualified to meet those needs.
  3. Asking for investment funds to make it happen.
  4. Describing your ultimate plans to sell off the company so investors can recoup their funds.

That last point is called an exit strategy. For better or for worse, it’s become a universal requirement for venture funding and entrepreneurship in recent years.

Think about this, though: What if someone had required Jim Goodnight and his SAS cofounders to plan an exit strategy when they first started SAS back in 1976?

Early plans to sell off the company for a profit would have changed the whole direction of SAS. It would have diminished the company's focus on the customer. It would have undermined the long-term strategy for steady, double-digit growth. And it would have prevented SAS from developing a corporate culture that other companies now seek to emulate.

Investing in evergreen companies

Recently, Tugboat Institute has taken an interest in SAS and other mission-driven organizations that they call “evergreen companies.” According to Tugboat, evergreen companies seek to build sustainable business models, develop long-term goals and provide lasting value for customers.

Recently, we hosted a Tugboat event at our Cary, NC, headquarters where SAS leaders spoke about the benefits and challenges of being an evergreen company. Our advice included:

  • How to grow without becoming complacent. One way we do this at SAS is to encourage collaboration and communication among employees, and to build systems that help keep employees informed and helps them understand the value of their work.
  • How to support continued innovation. You have to develop a culture that celebrates risks within reason. Not every new idea is going to lead to a new product, but you have to develop programs that continue to encourage new ideas.
  • How to find employees that share your same values. Don’t hire anyone that asks about stock options in the first interview. Look for mission-driven employees who share your long-term goals.

About 30 CEOs from various startups attended the event, primarily young entrepreneurs who have started businesses that range from building online communities to selling Christmas trees. One of the CEOs was even a former SAS employee.

It was invigorating. All of the attendees seemed to really care about creating sustainable companies, and not just about becoming gazillionaires in a short amount of time.

One of the goals of the Tugboat Institute is to recognize the benefits of entrepreneurship without an exit strategy. From where I sit, you can see those benefits extending far into the broader communities and the local economies wherever an evergreen company exists.

If you’re an entrepreneur, think about how you might do better with a long-term plan rather than an exit strategy. How could you build a better, more sustainable business if you were in it for the long haul? Visit the Tugboat site to learn more.

Photo by: Ann Hung // license by: cc

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Beyond technology: How we integrate for digital marketing

42-61534963A new report from the CMO Council details the impacts of marketing technology, with a focus on integrated technology strategies. The two most important concepts in the report are easily found highlighted in its title: Quantify how well you unify. 

First, some results from the study that jumped out at me:

  • Companies that have a formal roadmap for digital marketing technology integration and data unification are achieving more targeted, relevant and efficient customer engagements.
  • The most successful companies in the survey have a comprehensive marketing technology strategy and are taking steps to better deploy, manage and integrate their technologies.
  • The most successful companies extend their strategies beyond marketing to include sales, product development, etc., and they generate a significantly higher business impact.

So, unification matters not only in your technology stack, but also in how you approach your marketing strategies. Business and technology goals should be aligned. Likewise, everyone benefits when marketing aligns with sales, product development and other areas of the company.

At SAS, we are seeing strong results from a unified strategy, in terms of being able to create more focused interactions with customers and prospects. Our social media guidelines, for example, are global, and so is our social media platform. And we’re replicating many of our most successful digital marketing programs around the world.

In each of these programs, the importance of measuring our activities cannot be overstated. Any time we can show the impact of a particular program, we find more and more proof that digital marketing makes sense.

You might have to use your data to make hard choices, but ultimately the data makes those choices easier. For example, we have shifted our marketing and advertising budgets so that 70-80 percent of our spend is in the digital space. It’s hard to argue with that shift when the metrics support it.

Beyond unifying technologies and strategies, you also have to unify employees around digital marketing. This can be a challenge when some regions, and some individuals are more digitally inclined than others.

Many creative marketers are still very much focused on traditional marketing activities like brochures, print ads and hotel seminars. When you go 80 percent digital, like we have, your marketing programs require a different skill set. You have to develop training programs and talent that support your new digital programs.

Today, your web site is your first impression in the marketplace. It’s one thing to look pretty on your home page. But you can’t stop there. What are you doing to draw people in? That’s where digital marketing comes in. You have to bring people to your Web site, provide downloadable content and give them reasons to keep coming back.

If you can unify your skill sets and tools around that goal, and do it in a measurable way, you’ll see many of the same benefits that the “top companies” in the CMO Council report are seeing.

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Customer experience is more than just a hot steak

100919562There’s a restaurant here in Raleigh called the Angus Barn.  It’s one of my favorite places to eat and unwind after work. They’ve got top-notch steak and quality cold beer, but what really sets the place apart is the customer experience they provide.

There’s a cigar room in the back called the “Meat Locker.” To get there from the front entrance you have to walk through the kitchen and back hallways of the main restaurant.  It’s like walking through a maze, so half the fun is getting there. You can imagine the delicious aromas the kitchen provides. I’ve been there enough times that I could find my own way through, but each time I arrive, an attendant from the restaurant appears to personally escort me.

What happens next still amazes me.  Every employee I walk by stops what they’re doing, smiles and says, “have a nice dinner,” “enjoy your evening,” or “thank you for being here.” It’s clear they’re all customer driven.  No matter what their job is, they understand how they impact the customer experience, and it keeps me coming back.

What does steak have to do with a software company?  Well, at SAS, we’re customer driven too.  For nearly 40 years, it’s been in the fabric of our culture: We put the customer at the center of our universe. When we make decisions — be it solution offerings or hiring new employees — it’s through the lens of our customers’ point of view.

I’m often asked how SAS continues to build on this cornerstone of our culture.

Here are my top three answers:

  1. Don’t just hear your customers, really listen.  Strive to understand their wants, their needs and their challenges. What help do they need from you? Understand how customers want to interact with you and with their own customers.  That’s what drives business decisions.
  2. Be honest about the help you can provide. This means not automatically saying yes to everything just to satisfy an immediate ask.  This is a tough one, because we want to make our customers happy, but more importantly, we need to offer ideas and do the right things to make them successful in the long run.
  3. Have the right assets in place to aid your customers.  People, processes and technology come to mind.  I love telling folks about our amazing customer contact center, technical support team and newly launched @SAS_Cares social media support team on Twitter.

Much like the staff at Angus Barn, I tell my teams to be out front and ready. We’re all in this together – we all have a role to play in providing a world-class customer experience.

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Can analytics play a role in cybersecurity?

75673483In the same week, my local newspaper ran a story about the hacking of celebrities’ cell phone photos and a separate story about a data breach at 216 neighborhood Jimmy John’s restaurants across the country.

Meanwhile, some of our most trusted global retailers have been the victims of customer data leaks. And governments around the world are struggling to balance the privacy of citizens with the data surveillance needs for preventing legitimate cyber and terrorist threats.

The clear message here is that no one is immune. Cybersecurity is an issue that affects us all.

But what can we do to keep our personal data safe, to ensure our business and transaction data is secure, and to develop surveillance programs within reason to support national security?

In each of those areas – at home, at work and in our national defense – how can analytics play a role?

First, let’s look at the real issues: Networks are being infiltrated in many different ways. From individuals, from computers, from automated systems, from inside and outside trusted boundaries. How can you prevent the threat or recognize the vulnerability when it is happening so quickly and in so many different guises?

And time is of the essence. You can’t wait an hour, a day or a week. If you can’t detect the breach when it’s happening, you don’t have a chance of avoiding potential devastation to your business, your personal reputation or your nation’s security.

What is the solution? We’ve seen that high-speed analytics can detect credit card fraud in the instant that it is happening. And we know how to capture and analyze data as it streams continuously into the network from sensors and devices. Today’s top experts in cybersecurity are combining these concepts to compare normal behavior with abnormal behavior, and to model legitimate traffic so that the system can detect the opposite: suspect behavior.

For instance, should this machine be talking to that machine? Is this frequency of network traffic common for this time of day? Does data passing from this location to that location fit into a larger pattern?

The data is streaming too fast for a human to ask and answer these types of questions. But advanced analytics and the technologies mentioned above make it possible to answer them all within seconds.

When those seconds could be the difference needed to keep your iPhone photos private, to ensure your credit card information is secure and to protect your national interests from cybercrime, I think the answer is clear: Analytics has a definite role to play in cybersecurity.

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Fighting fraudsters

145856019You might assume that a battle-tested businessman with a gruff exterior and a taste for salty language lacks an inner child, but you’d be wrong. Exhibit A is this little-known fact:

I have a soft spot for animated Disney movies.

Now, I could try to bluff a bit and say that my appreciation for “kid stuff” came about only by virtue of being a parent. But I’d rather just man up and let it be known that Carl T. Farrell likes cartoons. (And while we’re being confessional, I’m a fan of Harry Potter, too.) I enjoy these films because they offer such a strong contrast between good and evil. Let’s face it, seeing bad guys get what’s coming to them is just plain fun to watch.

And that’s exactly why I like fighting fraud with SAS. For me, outwitting criminals is a huge source of job satisfaction. I love the fact that the software we make has the power to “seek and destroy” the enemy. And I get to hear these stories all the time, because SAS is giving fraudsters the old one-two punch every day, all over the world. A great example is Laurentian Bank in my home country of Canada.

If we were telling this tale as a movie, the hero would certainly have a sizable hurdle to overcome. Financial crime costs Canadian financial institutions more than $1 billion a year. And while it’s not too hard to shut down suspicious transactions in a single channel, banks like Laurentian don’t have it that easy. They have to monitor accounts of every variety, plus the people who use them, and the credentials (legitimate or otherwise) that each entity provides.

Think of it like this: Instead of trying to catch one criminal sneaking in through the back door, banks have to be watching all doors, windows, floorboards – even the garden gate.

To strengthen its watchful eye and see the “big picture” of approaching threats, Laurentian Bank tied together three critical components of SAS® Enterprise Financial Crimes for Banking: SAS® Anti-Money Laundering, SAS® Fraud Network Analysis and SAS® Enterprise Case Management. It’s a triple punch right in the face of the bad guys, and it provides the bank with the ability to uncover unknown relationships among its customers, accounts and businesses – shining a spotlight on the fraudsters in action.

Of course, sometimes it’s not easy to catch a thief red-handed. Money laundering is a crime that can really only be detected after the fact. Fortunately, the three-pronged solution of Laurentian Bank speeds up the detection process for this type of crime, shortening the time required to shut down an account from six to eight days to just two hours. Score another one for the heroes.

But since bad guys are never permanently down for the count, we’re already looking to the scene of the next battle: cybercrime. Stay tuned for SAS to star in this “fraud double feature.” You’ll be hearing more about our efforts in cyber very soon.

There’s something cosmically satisfying about outsmarting someone who’s up to no good. It rights a wrong. It sets the world in order. It tips the balance back toward hope. And that’s not “soft.” That’s tough on crime.

To learn more about how Laurentian Bank is using analytics to combat fraud and money laundering, click here.

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How are analytics moving the world?

155786129Over the past few years, I’ve talked a lot about analytics culture. In speeches, in conversations with customers and even in posts on this blog, it’s a topic that comes up again and again: How do you create a culture that encourages analytical thinking and data driven decisions?

This is still an important topic, but I’ve noticed a lot of organizations are moving beyond that. They’re bought into the idea of analytics and they know the cultural issues are important, but now they want to hear examples. How are other businesses using analytics to move the world? And how can their ideas be applied across other industries?

As we move into October and finalize plans for this year’s Premier Business Leadership Series, I expect to have similar conversations. Executives at this event are well informed in terms of what data can bring to their businesses. Now they’re interested in hearing specific use cases, and they’ll find a lot of that in the conference agenda, especially in the sessions and workshops.

Whether you attend one of our conferences or network in our online communities, come with questions: What’s working? What’s not working? What’s making a difference? What projects are other people finding valuable? Are they industry specific? Or are they universal?

We hope you’ll find the answers to these and other questions – and that you find some inspiration too.

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Q4 2014 Intelligence Quarterly: Global citizenship and the role of technology

4Q 2014 Intelligence Quarterly: Journal of Advanced AnalyticsBusinesses taking action to expand and enrich their social responsibilities. Public sector agencies improving the lives of citizens. These are some of the stories I hear from customers and colleagues around the world that inspire me. And these are the stories I wish to share with you in the latest issue of Intelligence Quarterly – stories that bring to life the many ways analytics helps make our world a better place to live.

Turn on the news today, and – more often than not – you will hear stories of disease, abuse, poverty and war. The financial news is not much different, although the increasing use of behavioral economics offers some hope. When businesses can better understand – and meet – customer motives and expectations, everyone wins.

We often hear that growth is the answer to all our problems. However, growth alone will not suffice. As behavioral economics develop, we need “inclusive growth,” where everyone can play a part and all sectors can benefit.

We know a brighter future is possible for all. As the following stories illustrate, analytics is a powerful technology that can be used to improve our world. The global family needs us now more than ever, and technology has a role to play in global citizenship. Just consider:

  • In New Zealand, the Ministry of Social Development is using analytics as a tool for transformation, to help struggling young people create a better future. This is a perfect example of inclusive growth: It helps the individual, the society and the economy alike. What you'll learn: How better targeting empowers welfare beneficiaries with confidence and life skills, and reduces the cycle of long-term benefit dependency.
  • After Typhoon Haiyan devastated the Philippines, analytics helped aid workers prioritize assistance levels and supply distribution. What you'll learn: How the International Organization for Migration incorporated social media data with geographic and real-time data to find higher concentrations of diarrhea and fever, and to discover that the greatest needs in Guiuan were for antibiotics and fuel for hospital generators.
  • In France, job seekers who collect unemployment benefits are receiving assistance that is customized to their unique situations. What you'll learn: How analytics has helped empower local service branches to design personalized pathways to employment, helping them meet statewide quality and consistency standards and goals.
  • We've also included five inspiring examples of how health care organizations are changing the way we look at health on a global scale. One enables early intervention and reduces hospital stays for veterans in Australia. Another pools patient information worldwide to expedite medical research. And yet another has saved hundreds of lives in North Carolina thanks to analytics, with the potential to save even more.

Here at SAS, we are committed to helping organizations use data for good. Big data must be used to close the gap between perception and mathematical truth. And this can only be done with analytics.

Another way to become global citizens and agents of change in our communities is to spread the positive stories of disruptive technologies improving society.

To that end, our work here at SAS has never been more important. As we remain focused on our work at hand, I am confident that we will not only contribute to inclusive growth, but also to the role big data analytics will play in improving the lives of those around us.

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Five crucial behaviors of a true social business

463434385Social media has changed the way we consume and interact with information. It’s not just a change in the way we write and read using short bursts of information that match our attention spans. It’s also a change in the way we interact with brands online.

Consumers want to understand, from a storytelling perspective, the value a brand might bring to them. They’re not interested in getting pummeled with white papers and marketing materials alone. Instead, they’re interested in putting together their own story of what a company means to them, and sometimes even telling a piece of that story themselves.

What does this mean for brands? And how are we seeing it play out? It means that brands have to change the way they operate online, especially in the five areas I’ll cover here. 

1. Look at how you’re trending on social media channels

Social media gives you a daily pulse on how well your corporate values are perceived by people outside your organization. It offers an opportunity to react and change direction based on customer feedback. This represents the opportunity to tap into a focus group 24x7.

We ought to be paying attention. And we should be able to adjust our marketing mix and our messages in reaction to what we read, as opposed to launching marketing programs that are locked and loaded with very little opportunity for change.

2. Implement a monitoring and response plan

What are you doing in real time to respond on social media? Are you answering questions online? Sharing content that your audience asks for? Responding to requests for new features in your products? It’s not just about listening to what people are saying on Twitter. It’s also about responding quickly – and making sure the answers are coming from people in your organization with the domain knowledge to respond. You can’t expect an intern to answer complex questions about your products. Only the engineers and product managers can do that, so they need to be responding too.

3. Integrate social media into the fiber of the company

The future is having social media more deeply ingrained in more aspects within an organization, not just in the marketing function. I ought to be able to walk down the hallway at SAS and find anyone in Product Marketing or R&D and ask, “What did you see on social media today?” and not have them say, “Uhhhhhh ...”

As we look to build more of a social media culture at SAS, we’ve looked at everything from training to hiring practices. We ask, do we have people in place in every department who are embracing social media, and understand what it means and can put it into practice? Are we committed to keeping those people current?

During new employee orientation, for example, we don’t just say, “Here’s your badge, your phone, your desk and your computer.” Instead, we say, “Here’s our brand values, and here’s how you can participate with the external community.”

4. Loosen your standards around your brand image online

This is hard, but you have to let go of the fear of what people might say. When social media first became popular, people created all kinds of standards. Employees were told not to expose anything about the company or give anyone an opportunity to say something bad. Now, we’re more open. Brands are asking for feedback, and they’re open to hearing the good and the bad.

You need somebody who can establish standards and set guidelines so nobody strays too far off brand. At same time, the beauty of social media is trusting employees to represent your brand and let them loose. If you have the right people in place, you should give them leeway to participate.

It's important not to overreact to negative comments from critics who are often just looking for a reaction. We have some very loyal employees at SAS. If somebody sees something negative on social, people want to react, but you have to let these things play out. More often than not, the community will self-moderate, and your customer champions will come to your defense.

5. Develop a closed loop measurement system for social media

The marketer’s role has changed significantly in last five to seven years, and not just from a social media perspective – but from a digital and analytics perspective overall. Marketing has become much more of a science and less of what the Mad Men TV series portrays, where creative people drank scotch, scratched their heads and magically had an ad campaign.

Today, you can’t survive as a marketer without an understanding of technology, digital channels, social media – and how can you quantify it all. If you look at where we’re headed, a few organizations get it. A lot of organizations know it. But only a few have really put it into practice in a closed loop fashion. The brands that get it understand that social media is not just about listening and tweeting but also about measuring the impact of communications out in the market and then, based on that impact, refining how you communicate and how you do your business. If you can get that right, you will be a truly social organization.

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