Does the growing attention around analytics for specific verticals indicate a growing maturity in relation to CRM across business sectors?
That's a good assessment. From a CRM perspective, from a customer focus, the initial push for CRM was on the front end of the operational side. This was four to five years ago. Recently there's been a much higher awareness of analytics and cashing in on the analysis of information businesses already had. To some extent the message around analytics has been watered down. Some people are using the term in relation to basic business reporting. And people need that, but we're talking about predictive modeling and changing behavior. There's lot of room for growth in CRM, but we're beyond early adoption and momentum is growing. How did SAS decide which industries it would address first?
This was based on a combination of different issues. First of all, with the latest releases, [banking and telecommunications] are two industries that have the most pressing needs in terms of increasing customer profitability. They're industries where having a faster ROI is critical to the customer. We also had a lot of experience in banking and telecom. Likewise for pharmaceutical and retail. Going forward we're looking at industries like insurance, where we've also got some knowledge base. How hard is it to tailor each release to a specific industry?
The foundation of each solution starts with the data model. We spend a lot of time up front learning and creating ideas around the different data points and critical areas of information. Once you've got the data model created, then the analytics pulled off of that follow a logical sequence. It's not that difficult. Something to keep in mind is that we're not trying to offer a black-box solution. We want to get up and running faster, but at the same time you have to build in the ability to customize so that each customer has a competitive advantage. This is particularly important within each vertical. What is the most important lesson that SAS has learned in designing products for vertical segments?
What we find is that there is a different level of maturity in relation to CRM in each industry. For example, in banking we're seeing a lot more companies that are interested in pulling information from a large number of sources to create a single customer view. The public sector is not as mature and has a lot more political or cultural issues to deal with. Selling to them, we'd sell more on a division level. It's important to identify the core issues in each industry and sell along those lines. We can't sell the same product from industry to industry. What are some of the other industries that you're currently planning to target?
We're coming out with insurance this fall and from there we'll decide where to go next. But there are definite plans to deliver for other verticals.
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I'd actually say that it's about the same for us. We talk about 70% up and running and 20% to 30% being left over for customization. What industries have been the hardest to deliver specific technology for?
It depends on what the customers are looking for really. With insurance we're looking at the complexity of filing claims, which is a lot different from what we talked about for say, telcos where we looked at customer churn. It's a matter of having the domain expertise to understand the industries and go from there. It's different, not necessarily difficult with each market. Are there plans to launch a product aimed specifically at the public sector?
Absolutely. I'm going to California [this] month to speak to 300 higher education employees to show them how CRM and analytics can make a big difference in that arena. The motivation in the public sector is much different than the corporate market. In corporate America businesses are looking to drive revenue, in the public sector CRM is a cost savings initiatives most of the time. Yet, similar technology can help solve both issues. We're still talking about predicting and influencing customers, citizens or even students.