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Wicked Awesome Analytics

By Denis Pombriant
Nov 21, 2012 5:00 AM PT

Incorporating analytics in a vendor's solution set was once enough to qualify the vendor as very forward looking and a leader in the market. I think that's true in CRM for sure, and this metric could be spreading. Ever since Salesforce introduced its Marketing Cloud at Cloudforce New York, however, that hasn't been enough.

Wicked Awesome Analytics

Salesforce effectively raised the bar when it introduced not just analytics, but analytics for defined purposes like natural language processing, emotion, segmentation and more. The idea is that the generic idea of analytics, which has often stood for sentiment analysis, has been subdivided and aimed like a laser beam. Is this good? Yes it is.

Targeted analytics gives vendors a better array of tools for slicing and dicing the mountain of data they churn up from customers every day. It is a reason that more than justifies collecting the data because it gives you so much more to do with it from the get-go.

Wicked or Awesome?

But targeted analytics is not limited to the front office and it isn't even limited to words and ideas. In some ways, the front office has a harder time of applying analytics because so much of the data collected in the big data cloud is words and not numbers. Think about it. Before "wicked awesome" (OK, this is a Boston thing, but bear with me) can be taken as data, you need to know how to score it.

Conventional wisdom would suggest that at best this phrase might be an oxymoron, a contradiction of terms, like "jumbo shrimp," but that's not it entirely. Here "wicked" is inversely applied as a positive modifier to the already positive "awesome" to further enhance it. So rather than being muddled, "wicked awesome" is really very good.

OK, so before emotional analytics can be applied, you have to have a way of scoring the phrase differently from each word that makes it up so that the word combination's score is not simply the arithmetic sum (are we getting too technical?) of the two, for reasons elucidated above. It goes on like this for other phrases and, of course, other languages. Good luck with all that.

The good news about scoring numbers is that numbers are universal and tell the same story unless you have a political purpose for using them, but we are not going there.

All right!

Crunch the Numbers

So you can apply multiple kinds of analytics to numbers too, which turns out to be a real boon to companies that manage their business based on back-office numbers generated by customers. I am talking about subscription companies in particular.

Zuora introduced this concrete concept at its Australian users' group meeting a couple of weeks ago and is now briefing guys like me on it.

It starts with Z-Finance Open, a nascent partner ecosystem that Zuora introduced that brings together analytics partners with Zuora customers to help them better understand their businesses through advanced analytics. The first three partners and what they do are as follows:

SaaS Optics helps address business problems for historical trending and forecasting. This is aimed at helping make better decisions on how to manage the customer base. For instance, a subscription vendor might notice a drop-off in renewal cycles over time. To reduce churn, they might sensibly ask things like: Do we need new programs? Customer success managers? New pricing? Analysis of the customer base history might be able to answer these questions.

Good Data enables customers to take Zuora data on business performance and add other data to it to provide a larger target for the analytics to work. An example might be cost or expense data, plus revenue data, to provide a measure of efficiency. Are you spending disproportionately on operations and not getting the return in growth you expect? Analytics can give you an answer.

Finally, Scout Analytics claims it can increase revenue by up to 15 percent by optimizing revenue yield by tracking use of subscription services. A vendor can use this to make better pricing decisions. Rather than price on the vendor's idea of perceived value, this analysis helps vendors to look at use and come up with a more accurate understanding of value received, and with it, better pricing.

Platform Approach

The analytics vendors have pre-integrated their solutions with Zuora data through the company's open API set. This will enable customers to ramp up quickly, an important attribute of any SaaS offering. The Zuora platform approach also ensures there is opportunity for other analytics vendors when the need arises.

I've been writing about metrics and analytics in relation to subscriptions for a while, and Zuora has been pushing the same message with some of these same partners. It's good to see that they've made this advance. It puts them at the forefront of vendors that are using analytics with pinpoint precision and not simply as another checkbox item. As they say down under, "Good on you, Zuora."

To all my readers, Happy Turkey Day!

Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant's research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and website. He is the author of Hello, Ladies! Dispatches from the Social CRM Frontier and can be reached at denis.pombriant@beagleresearch.com.

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