SAS CEO says analytics turns CRM into more than merely a Rolodex.
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Despite the economic downturn, SAS Institute has been able to navigate its way through difficult waters. That was one of the messages at its SAS Executive Conference, an event for customers and prospects recently held at the Four Seasons Hotel in Las Vegas. The $1 billion company grew revenues 10 percent last year and has been fortunate enough to avoid layoffs in a bear market. Additionally, the company is keeping employees happy, as indicated by its low employee turnover rate of roughly 5 percent. SAS executives attribute these successes to its approach to people and technology.
James Goodnight, Ph.D., CEO of SAS, in Cary, NC, met with Senior Editor David Myron to discuss the analytics company's relationship with CRM software, the biggest customer misconception about analytics, and some hotspots where analytics is taking off.
CRM: How do you define analytics and its relationship with CRM?
Goodnight: We were on the cutting wave of defining CRM six or seven years ago. When we launched it, it was around the idea of building the customer data warehouse and doing the analytics, data mining, being able to do predictive analysis, predictive modeling, and determining which customers you need to do upselling and cross-selling to, and which customers you should send catalogs to. That's how we always envisioned CRM ourselves: building the one-to-one relationships that goes back to the old days of knowing your customers better. Then companies like Siebel and sales force automation and call center companies decided to jump on the bandwagon as they started labeling what they did as CRM. But I consider Siebel a $2 billion Rolodex. It's something you use to record your customer leads, the last time you talked to them, and what they bought from you recently, the next time you want to make a call to them you create a tickler file and call them. That's what Siebel basically is. So it's nice to have a history of the customers up on the screen when you're talking to them, but at the same time you're not able to forecast customer's needs or project what things he might need to buy.
CRM: What is the biggest misconception when it comes to analytics software?
Goodnight: A lot of the stuff that people are concerned about may be how knowledgeable a person might have to be and how to use some of the data mining tools. Quite frankly, the easiest part of data mining is just running the analytical routines. It's just two or three lines of statements that you submit. The hard part is getting the data together, mainly because of the silo issues.
When I do data mining to forecast which one of our customers might drop a particular product, it takes me about 10 or 15 minutes to actually do the analysis. It takes my staff a week to get the data together, because it's coming from four or five different silos.
CRM: Which vertical markets are leading the way in analytics?
Goodnight: We're seeing a lot of activity in the financial industry. The financial people get it. Las Vegas is coming up next, because a casino is best place in the world to launder money [and the casinos can use analytics to avoid that happening].
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