Responsys Buys Predictive Analytics Firm

Responsys acquired predictive analytics and contact optimization firm Loyalty Matrix. The deal will help Responsys in its strategy to shift from an e-mail company to serve the larger arena of on-demand marketing.

“In our pursuit to broaden-out our solution, we acquired Loyalty Matrix,” said Scott Olrich, CMO at Responsys.

The merger with Loyalty Matrix adds a layer of predictive analytics, which gives Responsys clients the ability to determine a customer’s lifetime value and likelihood of attrition, and to identify a prospect’s propensity to respond to marketing. Clients looking for predictive analytics services to complement their work with Responsys previously had to contract with a separate vendor or build an internal team to run manual analytics.

Responsys wants to improve customer satisfaction by using Loyalty Matrix’s ability to plot the best marketing mix for each customer, and, in turn, increase campaign profitability. Customer segmentation models maintained by Loyalty Matrix aid analysis to determine the best form of messaging for an individual, according to the companies.

“Most of those clients using these models are seeing 50 percent lift in response rates,” said Olrich.

Full terms of the deal weren’t disclosed. All of Loyalty Matrix’s executives and employees, almost 20 in total, will retain employment. Loyalty Matrix employees will move to Responsys’ San Francisco office, about 100 yards down the street.

Loyalty Matrix clients include 24 Hour Fitness, Apple Computer, Chicago Sun-Times, Olivia, and Draft FCB. Responsys’ client roster includes Continental Airlines, E-Loan, Kelley Blue Book, Land’s End, Office Depot, and See’s Candies.

Responsys hopes to maintain Loyalty Matrix’s relationships with agencies like Draft FCB to bring in additional business. “Agencies were leveraging Loyalty Matrix to do modeling and scoring, and use scoring and segmentation to come up with contact strategy for clients,” said Olrich.