The secret sauce: analytics software. It finds patterns in a flood of data—insights that give businesses an edge. In Avis’s case, after looking at rental patterns and website browsing habits, the company is better tailoring e-mail marketing pitches.
It’s working. Since Avis began using IBM’s analytics software in its marketing programs, Avis has slashed marketing costs in half and boosted loyalty.
"We reported in the second quarter that we experienced 14 percent growth in our business analytics and optimization business," says Steve Mills, who leads IBM Software. "We think this is an area that's probably going to grow at least 2 times, perhaps even 3 times the overall I.T. industry over the next five years."
And Avis is not alone. Today, analytics software is a $25 billion market, and it’s growing fast.
"Analytics is not just a luxury these days, it's a necessity," says Boris Evelson, analyst at Forrester Research. "Large enterprises, especially large retailers, because we're talking about consumer data today, can't really survive today without analytics."
The future of analytics looks bright—assuming that, in the age of Facebook, consumers can get over that uncanny feeling that they’re being watched.
Police departments in New York and Memphis are using the software to guess where criminals will strike next. Businesses are using it to plan inventories.