Wednesday, January 16, 2008

Spotlight On: Epsilon

Welcome to another edition of our "Spotlight On" series, where each month we focus on an industry-leading provider to the direct marketing industry. Additionally, we highlight those companies who not only bring us great DM solutions, but also perform exceptionally in the customer service arena. We hope that these monthly posts are helping you, our faithful readers, when you go about the business of choosing partners and vendors to work with.

Today, our spotlight is on Epsilon. We’re especially pleased with this month's Spotlight because it gave us the opportunity to chat with Ron Shevlin, Epsilon’s Vice President of Client Solutions. You may also recognize Ron as a fellow blogger, whose fascinating Marketing Whims blog we follow religiously.

In our conversation with him, Ron shared some great information about his company and, in addition, his vision for the future of the database industry.

First off, here’s a bit of background on Epsilon. We know Epsilon through our database consulting work (where we help clients choose the right technologies and database partners). Epsilon is always included on the short-list of database suppliers. But, they don’t only dabble in database. Here’s a list of other capabilities, from their website:

  • Unique, original data sources
  • Custom database solutions
  • Leading loyalty solutions
  • Data hygiene and integration
  • Multi-channel campaign distribution & management
  • Targeted email and direct marketing
  • Award-winning creative & strategic consulting

We asked Ron what he believed was the primary differentiator between Epsilon and its competitors. Ron stated that Epsilon is an expert in driving efficiencies and reducing cycle time. He cited an example of this with the work that they’re doing for the a top five bank here in the US. They’ve built an analytic data warehouse that integrates customer data and analytics across all of the firm’s business units. This data warehouse allows them to execute campaigns in a timely fashion. More importantly, it enables response analysis which allows the bank to apply learnings to subsequent campaigns. And, what’s most important of all is that all of this happens quickly—the true differentiator.

Another example Ron cited was their technology product, called SONAR. SONAR enables multi-channel and cross-channel marketing, by providing middleware that ties customer touchpoints together. For example, websites and call centers are tied into the customer database so that, for example, in real-time, the most pertinent offer can be presented to that customer. This technology, which facilitates cross-channel integration is being used successfully today by high profile firms such as Schwab and Hilton.

Ron talked about how historically Epsilon has specialized in building customer databases. Now, the firm is focusing on operationalizing the database. Their focus is on allowing firms the ability to “use data at the point of customer interaction.”

They’re also serious about high-quality company acquisitions. They make it a point to only acquire “best-in-class” firms. This commitment to quality is demonstrated by their recent acquisitions of Big Foot (interactive marketing), CPC Associates (new movers and other data), Abacus (the leading catalog co-op database firm) and Alliance Data Systems (specializing in retail marketing services).

In regards to their client mix, Ron does not see Epsilon moving away from their focus on large organizations, where their mix of technology, analytics expertise and database marketing knowledge is especially important. Epsilon has a strong foot-hold in the financial services sector, but with recent acquisitions (namely Abacus and Alliance), they’re industry leaders in the retail and catalog spaces, too.

Competitive Threats

Our discussion then branched off to some of the looming trends in the database marketing industry. Ron told us that in regards to competitive threats, he’s not worried as much about traditional database competitors such as Acxiom and Experian. Instead, the trend that worries him more is that more firms that are taking their database “in-house, using consultants such as IBM and Accenture.” He qualified this by stating that these firms may be well-versed in technology, but that they don’t necessarily provide long-term operational support. As we all know, this can quickly spell disaster when a company is left with technology that they may not be able to use or fully operationalize.

Another trend Ron sees for our future is offshore work—outsourcing programming, analytics and other technical functions to lower cost alternatives in India and China. One way to combat this threat, Ron believes, is to focus on Epsilon’s strengths—and that is their top-notch customer service. Ron gave us an example of Epsilon’s commitment to the customer—for large database sales, the team that comes into a firm and makes the sale is the same team that executes. Therefore, the client can rest-assured that they’ll get the support and commitment that they deserve from the Epsilon people that best understand their business needs and challenges.

Our take on Epsilon—while they are an established database provider to the direct marketing industry, they are forward thinking with their emphasis on real-time integration of multi-channels. They remain technology leaders and are committed to the customer. What more can we ask in a vendor partner?


Anonymous said...

Alliance Data acquired Epsilon, and subsequently acquired BigFoot and Abacus - not the other way around.

Suzanne Obermire said...

We stand corrected. From the Epsilon website: "Epsilon is a subsidiary of Alliance Data. Alliance Data is a leading provider of transaction services, credit services and marketing services, managing over 105 million consumer relationships for some of North America's most recognizable companies."

The point is that it's a winning combination of companies regardless of who bought who.

Andrew said...

"Another trend Ron sees for our future is offshore work—outsourcing programming, analytics and other technical functions to lower cost alternatives in India and China."

This is very concerning; given that industry and production went some time ago something should be done to help mitigate the offshore outsourcing of other fields of work. This sort of thing is not good for our economies stability.