Getting to know you
William M. Tatham has been preparing to ride the big data revolution for decades. Now the chief executive of Toronto’s Nexj Systems Inc., Mr. Tatham pioneered customer relationship management (CRM) software in 1990 as the founder of Janna Systems Inc., which sold for $1.76-billion 10 years later. After a three-year noncompete period, Mr. Tatham founded Nexj to give rise to the next generation of CRM software and he spoke with Financial Post technology reporter Jameson Berkow about what that future will entail. The following is an edited transcription of their conversation.
Q How does the mission of Nexj differ from Janna?
A At the core of it, it was the same idea as before. We track information about people, and we do that to help our customers manage their relationships with their customers. What is innovative is the type of information: name, address, demographic, your interests. If it is for a financial services firm, then we build your risk profile as in the type of investments you might like. Where did you go to school? What are your hobbies? Who do you have relationships with? Who is your tax advisor? your accountant?
Where this starts to get interesting, is if I also want to track your transactional behaviour. In other words, what have you bought? If we know that, we can start to look at it in terms of frequency, amount, category of purchase. Then, we can have the “others who fit your profile have bought this, maybe you haven’t” show up. There is lots of opportunity once we have that information, to leverage it and sell more.
Q As people become more comfortable with sharing personal information through the rise of social networks and other personalized online services, how does the CRM industry plan to respond to the growing data deluge?
A It is really about finding a way to build a relationship with each person. The more I understand about where you are in your life, the more likely I can put something in my offering that is tailored to you. Then you start to feel like you know me and feel comfortable. There are a series of tricks by which you’ll disclose this. Based on your age [26] I’d forecast you are going to make more money than you make now and we could even put some math on that and calculate through projections what your likely lifetime income is. We can also calculate what your likely lifetime expenses are and those kids you don’t have that you’ll want to send to school once you do. So I will be asking you that question about selling you a mortgage as soon as I see on Facebook that your status changes to engaged.
Q This sounds almost like CRM is evolving to try to predict people’s decisions before they even make them.
A Predictive analytics, yes, absolutely. In next generation CRM, that is what we actually define. There are three parts to this and the first is a comprehensive customer review, so I talked about the types of information like profile, interaction and transaction. We’ll add one more thing, news and events, so stocks going up or down, Facebook status changes. When I can tie it all together in one system I know everything about you. Now, if I was the perfect financial advisor and I had perfect information about you as a client — I knew all of your life status relative to events, — then what do I say to you to get you to buy more right now? How we summarize it is using computers to influence human behaviour.
Q How does that differ from what Janna did 20 years ago?
A Our first company actually started down this path and was very different from the competition. But this ability to integrate the data in existing business transactional systems seamlessly into our platform that has the profile and interaction history so it looks like one system, that is the magic sauce. So, our customers can integrate the new data with the data that they already have for their customers, but that they are not using to manage those relationships.
Q And 20 years from now, where do you see CRM’S abilities going?
A The short-term answer is using intelligent service models to drive customer loyalty programs. It works in every field, but let’s use financial services as an example. The first thing I do is look across my entire customer base and segment it into tiers based on assets under management. Then I modify that with my belief in their future asset potential. I want someone on my team to contact my best customers every 30 days and I want this to be a non-financial, proactive touch. Just to build a relationship, happy birthday, happy anniversary and so on. Then I would want the next step down of customers to be contacted once every six months and so on down the line from there.
Q You’ve mentioned financial services such as insurance and mortgages using your software, but going forward what about other data-intensive industries such as health care?
A This is where it gets interesting and we are doing a couple things there. One is integration. So, if I could just have my electronic medical record whenever I wanted at whatever doctor I show up at, that would be huge — to integrate this different information so I can always have my health records. Going one step forward, if the patient can use that record to interact with their care team of multiple doctors and communicate through that system, this opens the door for a service model based on behaviour change.
In health care it is not just about curing disease, it is about promoting wellness. How many health systems does Canada really need? One potential answer would be 30 million, one personalized and tailored for each person. In terms of changing health care, we have wonderful technology in terms of online systems and solutions. We don’t really have good e-health in Ontario and it is spotty across Canada. There is no government that is going to take this on.