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Business intelligence, data mining maximize direct marketing for Intellidyn

Intellidyn improves clients' direct marketing campaigns through data mining and analytics built on an SAS-based business intelligence platform.

HINGHAM, Mass. -- Peter Harvey doesn't want you to receive multiple copies of the same scented candle catalog or cruise ship promotion ever again. In fact, the day is fast approaching when Americans will receive only marketing materials tailored specifically to their daily lives -- at least, when the materials come from Harvey's clients, he said.

Harvey is the chief executive officer of Intellidyn, a Hingham, Mass-based consulting firm that helps clients design and implement direct marketing campaigns: fliers, catalogs and other promotional materials intended to entice customers into buying a bouquet of roses for Mom or booking a cruise to the Bahamas. With data analytics and mining software built on a SAS Institute Inc.-based business intelligence platform, Intellidyn lets clients identify and target their most likely customers, reducing marketing spend and hopefully boosting return.

"The simple phrase that we use is 'smaller haystacks, more needles,' meaning we help clients spend less in marketing for higher yield, better results," Harvey said. "In addition to doing the fundamentals of data hygiene, data management, modeling, analytics, etc., we do it all the way out to the execution of the campaigns and the back-end analysis."

Case study: Business intelligence and data mining
Company: Intellidyn Inc.

Industry:
 Marketing

Project:
 Improve client's direct marketing campaigns via data modeling

Technology:
SAS Scalable Performance Data Server, SAS Business Intelligence Server, etc.

Years in use:
Eight years

ROI/results:
 Decreased marketing spend, improved results by targeting most profitable customers

 Intellidyn collects data – more than 600 million records -- from credit agencies, property listings and other available sources to create a unique profile of every adult in the U.S. It then loads the cleansed, live data into SAS-based data warehouses with data modeling and mining capabilities customized to its clients' business requirements. In addition to identifying which consumers are most likely to buy a particular product or service, the software also allows clients to analyze historical patterns and predict future consumer behavior.

Take, for example, a small cruise line with a goal of booking 50,000 passengers a year, Harvey said in a recent interview at Intellidyn's headquarters. Without identifying its most likely customers, it would take the cruise line 5 million random marketing solicitations with a successful return of 1% to reach the 50,000 passenger threshold, he said. With an Intellidyn-built customer data warehouse, however, the cruise line analyzed demographic information and purchase history to market to a much smaller but more likely group of potential customers.

In this case, "When you mail marketing materials to the top 10% of your model base, you're going to get a lift 2.34 times [what you would get] if you were just to use a [random] list of people," Harvey said. "That's one of the most fundamental statistical aspects of business intelligence."

And because SAS aggregates and cleanses all the data, Intellidyn clients are also less likely to waste money sending materials to the same consumer more than once because of duplicate data. Intellidyn clients typically reduce wasted mailings by between 2% and 6%, Harvey said.

"You cleaned up data and drove 20% to the bottom line," he said. "You've built models and got more people at the top of the haystack. And you've doubled your [marketing] campaign ROI."

SAS-based business intelligence, data integration foundation

Harvey teamed up with SAS in 2000, a little more than a year after founding Intellidyn. He said there were then only two statistical software companies -- SAS and SPSS Inc. -- that could help power his data modeling-based business plan. He chose to partner with SAS, he said, partly because it was better known among Intellidyn customers and because of its then-recent acquisition of DataFlux, which upgraded SAS's data cleansing and master data management capabilities.

Since then, however, Harvey has been most impressed with SAS's ability to integrate ever-increasing volumes of data, thanks to its parallel-processing capabilities.

"[SAS's Scalable Performance Data Server (SPDS)] enables us, on an ongoing basis, to take in hundreds of millions of records, hygiene them, append data to them, execute the algorithms that we built using the statistical software, and then export client-specific proprietary databases," Harvey said. "So 25 clients can each have 200-million-record consumer databases, and those consumer databases can each have easily 50 proprietary models. That's where the real power comes in."

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 With the additional computing power, Intellidyn software can help large enterprises with tens of thousands of product or service combinations to optimize complex marketing campaigns in order to maximize profits and sales, Harvey said. It can even take into account the value of the dollar versus the euro and other historical consumer patterns.

"This is advanced business intelligence," he said. "The SAS platform makes this doable at reasonable cost levels. In other words, I can do this entire process for under $20,000."

If Harvey has one complaint about SAS, though, it's that the Cary, N.C.-based firm is sometimes too "academic" in its approach to product development. "They need to react faster in bringing things to market," he said, noting that it took SAS a number of years to complete its BI suite and catch up with younger rivals like MicroStrategy and Business Objects. "[But] as long as SAS partners like us can keep SAS on the leading edge," he said, "life will be great."

Attitudinal data the next frontier

Not one to rest on his laurels, Harvey has big plans for Intellidyn. With the help of SAS, he hopes to add within the next two years "attitudinal" data – attitudes toward finances, brand equity, and advertising awareness, for example, gleaned from consumer surveys -- to Intellidyn's consumer profiles.

"This is the next frontier: the infusion of attitudinal with the atomic data," Harvey said. "So instead of just marketing to the top group of most likely [customers], we're going to take that top group and break it into individual cells. If I'm doing a campaign for TeleFlora, for example, I'm going to figure out that Donna likes red flowers" and market red flowers directly to her.

And Harvey still sees a large potential customer base for Intellidyn's services, namely those companies that still rely on customer reports in the form of weeks-old Excel spreadsheets. "For 90% of the industry, they're still that way," Harvey said. "Business intelligence to them is a white paper."

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