Clario – Update

I first blogged about Clario about a year ago, when they were focused on delivering a data mining/predictive analytic workbench on the web. Developing a new workbench, even with a compelling differentiator like being cloud-based, is difficult. The maturity of the competitive, hosted products and the tendency of analytic developers to be very entrenched with a specific product create significant barriers to entry. While Clario has made some progress in this area, and still sells the general-purpose platform, they are now focusing their sales and marketing activities in a specific domain area – direct/database marketing.

The company has a lot of experience around database marketing and developed Clario Stream to help multi-channel merchants manage their printed direct mail. This product lets you reduce mailings by large numbers (creating a big saving) for a tiny reduction in results – all by focusing on the most likely to respond. Referring to this as demand optimization, they have been successful selling this cloud-based analytic solution and are closing in on 10 customers.

Clario Stream targets the huge amount of waste in direct marketing. Some estimate that 97% of direct marketing misses its target. Given that direct marketing has an overall 10x return, if you could focus only on the 3% that hits its target you could see a 400x return! As a result this is a very productive area. For most companies, 1% of expense reduction is significant as is just 0.1% improvement in effectiveness. Clario Stream is showing several percentage point reductions in expense (across print, phone, direct response for instance), making for very strong ROI.

Rather than just delivering a general purpose platform, Clario is focusing on providing a decisioning platform that can be the center of successful direct marketing. Delivering optimal marketing or increased marketing productivity, Clario is focused on a solution sale around Clario Stream while allowing customers to use the same platform (the Clario on-demand analytics workbench) for other analytic decisioning problems. Today Clario is delivering print optimization in production and testing email and telephone optimization. This set of three decisions – print, email and telephone – is what Clario call “Planned Event Optimization”. Next up in 2011 are Triggered Event Optimization across mobile and internet. All using the same Clario Analytics foundation, allowing companies to gradually expand which direct marketing decisions they want to optimize.

I see a lot of analytic and decisioning companies find this solution-focus works better – people want solutions that require analytic decisioning but aren’t yet always clear enough about how those solutions work to understand they need the underlying technologies/approach. With this new focus, and some near cloud-based analytic technology, Clario is on track to double revenue this year and has become profitable. I look forward to seeing more of them in the coming months.