Thursday, May 15, 2008

Demand Generation Systems Shift Focus to Tracking Behavior

Over the past few months, I’ve had conversations with “demand generation” software vendors including Eloqua, Vtrenz and Manticore, and been on the receiving end of a drip marketing stream from yet another (Moonray Marketing, lately renamed OfficeAutoPilot).

What struck me was that each vendor stressed its ability to give a detailed view of prospects’ activities on the company Web site (pages visited, downloads requested, time spent, etc.) The (true) claim is that this information gives a significant insight into the prospect’s state of mind: the exact issues that concern them, their current degree of interest, and which people at the prospect company were involved. Of course, the Web information is combined with conventional contact history such as emails sent and call notes to give a complete view of the customer’s situation..

Even though I’ve long known it was technically possible for companies can track my visits in such detail, I’ll admit I still find it a bit spooky. It just doesn’t seem quite sporting of them to record what I’m doing if I haven’t voluntarily identified myself by registration or logging in. But I suppose it’s not a real privacy violation. I also know that if this really bothered me, I could remove cookies on a regular basis and foil much of the tracking.

Lest I comfort myself that my personal behavior is more private, another conversation with the marketing software people at SAS reminded me that they use the excellent Web behavior tracking technology of UK-based Speed-Trap to similarly monitor consumer activities. (I originally wrote about the SAS offering, called Customer Experience Analytics, when it was launched in the UK in February 2007. It is now being offered elsewhere.) Like the demand generation systems, SAS and Speed-Trap can record anonymous visits and later connect them to personal profiles once the user is identified.

Detailed tracking of individual behavior is quite different from traditional Web analytics, which are concerned with mass statistics—which pages are viewed most often, what paths do most customers follow, which offers yield the highest response. Although the underlying technology is similar, the focus on individuals supports highly personalized marketing.

In fact, the ability of these systems to track individual behavior is what links their activity monitoring features to what I have previously considered the central feature of the demand generation systems: the ability to manage automated, multi-step contact streams. This is still a major selling point and vendors continue to make such streams more powerful and easier to use. But it no longer seems to be the focus of their presentations.

Perhaps contact streams are no longer a point of differentiation simply because so many products now have them in a reasonably mature form. But I suspect the shift reflects something more fundamental. I believe that marketers now recognize, perhaps only intuitively, that the amount of detailed, near-immediate information now available about individual customers substantially changes their business. Specifically, it makes possible more effective treatments than a small number of conventional contact streams can provide.

Conventional contact streams are relatively difficult to design, deploy and maintain. As a result, they are typically limited to a small number of key decisions. The greater volume of information now available implies a much larger number of possible decisions, so a new approach is needed.

This will still use decision rules to react as events occur. But the rules will make more subtle distinctions among events, based on the details of the events themselves and the context provided by surrounding events. This may eventually involve advanced analytics to uncover subtle relationships among events and behaviors, and to calculate the optimal response in each situation. However, those analytics are not yet in place. Until they are, human decision-makers will do a better job of integrating the relevant information and finding the best response. This is why the transformation has started with demand generation systems, which are used primarily in business-to-business situations where sales people personally manage individual customer relationships.

Over time, the focus of these systems will shift from simply capturing information and presenting it to humans, to reacting to that information automatically. The transition may be nearly imperceptible since it will employ technologies that already exist, such as recommendation engines and interaction management systems. These will gradually take over an increasing portion of the treatment decisions as they gradually improve the quality of the decisions they can make. Only when we compare today’s systems with those in place several years from now will we see how radically the situation has changed.

But the path is already clear. As increasing amounts of useful information become accessible, marketers will find tools to take advantage of it. Today, the volume is overwhelming, like oil gushing into the air from a newly drilled well. Eventually marketers will cap that well and use its stream of information invisibly but even more effectively—not wasting a single precious drop.

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