I was recently in the Windy City attending DCI's latest CRM (customer relationship management) and BI (business intelligence) Conference and Expo. During my short jaunts to and from the hotel, I must have ridden in 10 cabs. I couldn't help but notice that almost every cab driver was listening to NPR (National Public Radio). I could hardly complain. (It was certainly better than listening to a recording of Rudy Giuliani reminding me to buckle up while traveling in New York cabs.) One driver explained to me that most drivers are immigrants, and NPR is their only source for information from their native countries. To these drivers, the value of this information is high.
What Price Information?
In fact, all information has value. It is bought and sold like a commodity - that's how junk mail and spam finds its way to your address. But, how do you assign a value to information? Let's say a customer's basic demographic information (e.g., name, address, gender) is worth a nickel to a credit card company. Add to that information the customer's average monthly credit card purchases, and it might be worth a dime. Knowing the types of stores in which the customer spends money would probably be worth a quarter. A list of the exact products that the customer purchases with the credit card would be even more valuable. Now, how much would that credit card company pay to have all of this customer data dynamically updated? Marketing plans would be forever changed. The cost of implementing this technology would be offset by only a modest increase in sales. Of course, this would be accomplished through a more personalized marketing strategy.
You, however, may be more concerned with your suppliers than your customers. What price would you pay to have granular data regarding sales forecasts, production efficiencies, scheduling, and product demand? A reduction in warehouse inventory, for example, may be all you need to justify the cost of implementing BI technology.
Real-Time Granular Data
The information is out there. It's probably on your enterprise, and you have no way to get at it. Today, however, you have no excuses.
One of the most intriguing conversations at the DCI show was with President and founder of Ithena, Inc. (www.ithena.com), Charles Nicholls. His company's technology allows businesses to identify, analyze, and predict changing individual customer behavior in almost real time. In addition to customer behavior, Nicholls says the technology can be used to extract granular information from all areas of the customer supply chain.
After beta testing in the first quarter, Ithena's technology is expected to roll out in the second quarter. The company's target market is businesses with millions of customers and millions of transactions (e.g., telecommunications, financial services, e-commerce vendors).
Nicholls says Ithena's software tools, when available, will start at about $375,000 and go up from there. At a half a million bucks, that's hardly a small hit for a company to absorb. Each potential customer will have to ask, "What am I willing to pay for information?" For the cab drivers in Chicago, there was no charge for the price of valuable information. Your business won't get off the hook so easily.
Questions about this article? E-mail the author at EdH@corrypub.com.