Rainmaker Group Quoted in Cleveland Plain Dealer

How companies keep tabs on your choices
Friday, June 11, 2004
Chris Seper
Plain Dealer Reporter

Pick a pay-per-view movie and the cable company will begin probing for information.
Why did you buy the movie when you did? Did you actually watch it? How long has it been since
you bought pay-per-view?

And just how mad do you get when you try to buy a movie and you don't get to see it?
In many cases, you answer these questions by using your cable service. But only recently have
companies started listening to your response.

A few years ago, the details about your buying habits sat in separate silos in giant corporate
memory banks that companies barely used.

But more and more businesses - from cable companies to mobile phone services to grocery
stores - are poring over tiny details about their customers and employees.

Many companies are using technology to make feeble first steps to better understand their
customers and improve their services. Other are launching sophisticated procedures to watch
their employees and cut corporate excess.

But using technology to peer inside someone's head is an inexact science. And no company is
quite sure when they'll cross the creepy line between researching customers and invading their
privacy.

"It's a very fine line to walk," said John Roy, Adelphia's director of advanced video engineering
and development. "The last thing we want to do is, if we know someone orders a lot of pay-perview
adult movies, start sending him ads like that. The industry is walking slowly because of
privacy issues."

For Adelphia, which serves large swaths of Northeast Ohio, its interest in you is purely financial.
It recently started analyzing consumer information to improve and streamline its video-ondemand
service, which lets customers order television shows and movies whenever they want.

Businesses have generally used different products to gather different bits of information. Few of
those products can work together. Adelphia, like many companies, has excelled at gathering
information but failed at using it in a meaningful way.

For example, Adelphia knows when you order a movie, but saves that information according to
the number on your cable box and according to your name, Roy said.

Your name, meanwhile, is kept in Adelphia's electronic billing records, which don't easily work
with the cable-box data.

And the company has two separate billing systems that store all kinds of personal customer
information, but one system has trouble working with the other.

Now, Adelphia is integrating technology that takes customer data and merges it. Smooshed
together, personal information may reveal how many customers order which movies at what
times, so Adelphia can efficiently manage its service. In addition, Adelphia can track which
customers have problems ordering a movie and whether the company should step in and help
them out.

"If you have a customer who has used video on demand 30 times and it's failed 25, they're not
going to call us," Roy said. "They are going to say, 'That darn Adelphia, it doesn't work.'
"Now we can contact them and say, 'Hey, we would like to help you to use that?' "

Rushing to a customer's rescue is the first step, said Stephen McHale, president of Solon's Ev
erstream Inc., which designed the software Adelphia is using to process consumer information.
Everstream's product can tell which customers have stopped using the service - a possible
precursor to canceling their subscriptions. It can also help companies pinpoint advertising
campaigns based on viewing habits, which would save the company money and cut down on
useless advertising to uninterested customers.

Cable companies, mobile phone services and other subscription-based services want to use
customer information to cut down on churn, which is the number of customers that leave one
service for another, McHale said.

Companies readily admit that as they get more sophisticated, they want to use personal
information to sell advertising and learn more about individual customers.

Privacy groups are increasingly uncomfortable with that idea - and worry about who is getting to
see all the information. The Center for Democracy and Technology, a Washington- based group
that monitors digital issues and civil liberties, warns that the government is slowly building its
own personal database using information gathered by the private sector.

Also, many companies mix the private information about their customers with demographic
studies and additional personal information purchased from other businesses. However, unlike
the system for credit ratings, customers rarely get to double-check and correct the conclusions in
these documents.

Who really knows for sure why people decide what they do? Does a customer who hasn't used
video-on-demand in a while really plan to quit the service? Maybe there aren't any shows she or
he wants to watch. Maybe they've been out of town.

When it comes to definitively determining what drives a person's buying behavior, McHale
admits, "We've got no idea."

But reviewing personal infor mation is only going to increase, according to advocates and
watchdog groups.

Grocery stores, which constantly cull shopper information from preferred shopping cards, are
starting to record every move their checkout clerks make, said Chad Symens, president of
Akron's Rainmaker Group, which processes corporate information.

Symens' company specializes in processing data from grocery stores, including a formula with
about a dozen factors - such as the number of scans per minute - that determines the most
effective checkout clerk.

Cashier problems account for more than one-third of missing grocery store revenues, according
to a 2003 study by the National Supermarket Research Group. Using technology, including
employee monitoring software, can help cut the losses, according to the report.

But data can be as deceiving as a boss' hunch. Symens worked with one grocer that caught a
clerk constantly listing $25 refunds. They thought they had found a thief.

After some more research, it turned out to be an honest mistake. The clerk was legitimately
refunding customers who rented cleaning machines, but classified those returns incorrectly.
"It's a data quality issue: You put garbage in, you get garbage out," Symens said. The company
needed to train employees to enter information correctly.

If these business intelligence technologies, as they are called, can provide their worth, every kind
of behavior will get the onceover. Everstream is working on versions of its software for mobile
phone providers, wireless networks and high-speed Internet providers.

"They all want to know what works and what doesn't," McHale said. "The yardstick is how much
people are using it, retaining subscribers and increasing incremental revenue."


To reach this Plain Dealer reporter:
cseper@plaind.com, 216-999-5405
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