Marketers are continually finding innovative ways to exploit business intelligence for profit. For some, merely knowing about individual customers is no longer enough. The latest trend in the US is to leverage the entire social network.
Specialist companies are now focusing on understanding a customer's place in society, and his or her network of friends. The aim? If identified as influential, customers can be encouraged in various ways to influence their friends.
"This customer network value philosophy is big in the US, although it's been slow to catch on in Europe," says Dr Andreas Weigend, Amazon.com's former chief scientist, now at Weigend Associates LLC.
"I would personally allocate my main marketing dollars to the leveraging of social networks for marketing," he told delegates at the recent SAS International Forum on business intelligence.
Social network marketing applies ideas from social analysis and social network research. In the US, social networking companies are springing up to help organisations exploit business intelligence. There are powerful algorithms that extract customer network value out of the data that companies have about their customers, based on their behaviour.
Social network marketing examines questions such as 'How much profit can a particular customer generate?' In the case of an online bookseller, for example, 'How many books will the customer buy for him- or herself, and can he or she influence others to buy?' Special promotions can be offered to customers with large network value, for example.
"If such a customer, let's call her Claudia, buys a book from Amazon.com, the online retail giant could suggest that Claudia supply e-mail addresses of friends who may also be interested in that book," says Weigend. "It could offer a 10% credit should one of her friends buy the book within a week. At the same time, it can e-mail the friends, along the lines of: 'Your pal Claudia bought this, would you like it?", offering a 10% discount to the prospective buyer.
"This is extremely powerful marketing as customers and Amazon.com alike win. Both customers benefit, and Amazon.com scores by offering value, not spam, and potentially gains another customer."
Amazon.com uses SAS business intelligence solutions to drive its business.
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