CRM in brief: Jack Noonan, SPSS, Don Pepper, Pepper and Rogers

Does the tough economic situation favour or inhibit the take-up of predictive analytics? MyCustomer.com sat down with Jack Noonan, CEO of SPSS, and Don Pepper, co-founder of consultancy Pepper and Rogers, to find out.

By Stuart Lauchlan, news and analysis editor

MyCustomer (MyC): Is the economic downturn having an impact on the analytics market?

Jack Noonan (JN): Things could always be better, but overall things are holding up. The economy is tough all around the world. But if we're seeing anything in the marketplace it a slowdown in conversion rates.

Don Pepper (DP): I think there's a lot of companies who are interested in being smarter in a downturn. Companies are still buying in a downturn. It's the companies who are doing analysis work that will be the ones that will make it through the downturn.

JN: Clients still want to do customer acquisitions and they're working on customer retention. If they can do all that on a reduced marketing spend and still see money coming in, then they will. They'll look for places to cut back, but they are still spending. The buying cycle is longer but it is still there.

DP: The downturn will be over after the US election. It doesn't matter who wins actually. It's an artificial downturn that's been created by the media. It's interesting that when polled, 80% of people think they personally are better off than they were before, but that the country is heading in the wrong direction. The only reason for that is the media coverage.

MyC: Don't companies often end up with too much information rather than too little, leading to the 'drowning in data' syndrome?

DP: Companies can get access to lots more information. We've got there technologically. Most technology works as advertised, but companies get caught with their pants down because they now don't know what to do with all this information that they can gather. Do you have the right tools and authority in place to do the right thing? You need to engage and enable the right people. If you have engaged people but they are not enabled, then they are frustrated; if they are enabled but not engaged it's also a problem. If you enable empowerment then people will do the right thing.

JN: We have continued to extend out our tools to turn artefacts of analysis into assets. We are seeing more and more people doing analytics. There's been a change. We've seen the lunatic fringe, the early adopters. Most everyone has deployed a repository of some kind. We are looking to deliver information 'just in time'. We also enable a technical dialogue with customers. Many times employees have no idea what to ask. We are empowering employees to have a better interaction with customers.

MyC: Are mainstream customers starting to understand the genuine meaning of predictive analytics?

DP: The words are helpfully self-descriptive. People used the words before but it was never about predictability and never as sophisticated as it is now. Companies have perhaps become more sceptical of software vendors offerings. They want to have stuff demonstrated a lot more than before. A lot of software vendors have made claims for products, said that things have been the best thing since sliced bread. What is good about SPSS is that information is for the first time being served up for executives as information, almost in a transparent way. It's almost like electricity. No one says 'wow, we've got electricity!'. That's what information should be – it's information as a utility.

JN: Just in time information – got to create an environment where you have such data then got to figure out a way of classifying the basic data series – have to have data that is chosen at a particular time for a particular reason.

MyC: Can analytics find a slot in the software as a service revolution?

JN: A lot of organisations believe that their data and their analysis are core competencies. What I believe is happening in analytics is that the data warehouse that used to be the be all and end all a decade ago is now being used more appropriately. As organisations use their data more appropriately they can decide whether to outsource and what to outsource. They can make that decision based upon the real criticality of their information.

DP: Many companies are outsourcing or sending tasks overseas to India. It does require human judgement to be in place for really critical data. You need a background and context for decision making and you can't outsource judgement and expertise. In the end, it's all about your people. Are they self-organising or do they always need top-down instruction. When a customer problem comes in that's unusual or unpredictable, can they handle it? What knowledge process outsourcing is about is outsourcing specialist knowledge, but you still need your people. Your people are your company. The more standardised the processes, the more a candidate for outsourcing they are.

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