Friday, May 31, 2013

Neolane Interaction Tightly Integrates Real-Time and Outbound Marketing Campaigns

As I mentioned last week, there haven’t been many new B2C marketing automation products in recent years. But this doesn’t mean the industry has been stagnant. New developments have come from established vendors who are steadily expanding their products.

Neolane has been one of these, growing from its roots in email to encompass other outbound and inbound channels, and more recently with a slew of social and mobile marketing features. One of its offerings, originally launched in 2009, is its real-time interaction manager, Neolane Interaction.

Interaction performs the same basic functions as other interaction managers: it receives a request from an external touchpoint that is engaged with a customer, selects the best treatment, and returns the recommendation to the touchpoint.  However, it differs in several key details:

- it supports both batch (outbound) and real time interactions. This is unusual, because efficient processing usually takes different data structures and methods for batch vs. real time. But Neolane cites one customer delivering 10,000 Web recommendations per minute and another sending ten million customized emails per week, so it has apparently found a way to handle both. Supported channels include email, Web, social, mobile, call center, point of sale, and SMS.

- it uses the same offer library for real-time and outbound campaigns. This means that offers can be used interchangeably in both types of campaigns – something that considerably simplifies program design and analysis. Each offer can include separate content for the different channel formats. Users specify which offers are available in which channels, to ensure an offer isn't recommended where it shouldn't be.

- it draws data from the Neolane marketing database as part of its offer selection rules. This is different from most interaction managers, which query external systems rather than maintaining their own persistent customer database. (Neolane could also do external queries.)  Again, this approach raises a technical eyebrow, since traditional marketing databases are not structured for real-time interactions. But Neolane seems to pull it off.  I suppose it helps that Neolane can attach to any data structure, so clients who want real-time interactions presumably build a real-time-friendly database.

- it supports both anonymous and identified customer interactions. Most real-time interaction managers make customer-specific recommendations, although Web recommendation engines are often designed for anonymous visitors. It makes sense for Neolane to support both, again serving the greater goal of providing one marketing system to meet as many needs as possible.

These items all grow out of the fundamental fact that Interaction is a module within the larger Neolane system, rather than a separate product. Other features of the system are more typical of dedicated interaction managers:

- eligibility rules for each offer. There are also eligibility rules for offer categories, which save effort by applying the same rule to multiple offers.

- offer arbitration (i.e., choosing which of several eligible offers to return). Offers can be ranked using fixed weights assigned to each offer; by calculating weights with a formula that draws on customer data; or with an unusual “autolearn” function that adjusts the weights to ensure that the offer will be seen. The system does not incorporate any of predictive modeling, although model scores built elsewhere could be used in weighting formulas.

- each recommendation is independent of a larger dialogue flow. At best, marketers wishing to deliver a sequence of treatments could create eligibility rules that check for previous treatments. This limitation is typical of real-time interaction managers.

- a simulation function that estimates how often each offer would be presented to an audience with specified characteristics. This helps marketers see the results of different eligibility rules and offer weights, which can be difficult to estimate in advance. It’s found in some but not all interaction managers.

The downside of Neolane’s approach is that customers who only want an interaction manager must still purchase the full Neolane system. This isn’t necessarily cost-prohibitive: the company says its average deal for the base system plus Interaction is around $350,000. Actual fees depend on the number of interactions processed. The system is available for on-premise, hosted, or “hybrid” deployment (on-premise installation with Neolane-hosted email delivery). Neolane says about 60% of its clients choose an on-premise option.

To end on a positive note: Neolane sold 22 new Interaction installations in 2012, up from 17 the year before. This makes it one of the company’s fastest-growing products.

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