Fair Isaac in buying mode

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Data manager Fair Isaac Corp. has been on an acquisition tear in the past 12 months, at a time when most companies have been retrenching because of the poor economy. As a result, the San Rafael, Calif.-based company has made a significant push into the fields of marketing services and customer analytics.

Fair Isaac most recently acquired Seurat Co. to add creative marketing to its portfolio. "This is art meeting science," said Richard Howe, VP-global marketing solutions at Fair Isaac. Three components of Seurat’s business appealed to the data provider: creative execution expertise, interactive capabilities and call center expertise.

In January, Fair Isaac bought Nykamp Consulting Group, a customer relationship management consultancy. "We saw a value in numerous individuals [at Nykamp] who knew how to manage relationships with customers," Howe said.

Push into marketing

The acquisitions enable Fair Isaac, traditionally known as a provider of credit scoring and risk management services, to help clients plan, implement and analyze data-driven marketing campaigns. They also bolster its corporate description of itself as "the pre-eminent provider of creative analytics that unlock value for people, businesses and industries."

In October 2002, Fair Isaac bought HNC, a fraud detection software company. The acquisition complemented Fair Isaac’s credit scoring business, as enterprise customers often rely on both services.

Kim Collins, research director at consultancy Gartner, said Fair Isaac is now using data expertise to help clients take the next step—to "execute on that insight" by providing marketing services. "They’re finally starting to come out with a more integrated solution," she said. "They are moving more into the marketing automation space and looking at becoming an analytical provider of actionable solutions."

Competitors such as Acxiom and Experian, Howe said, have database management expertise, but he insists Fair Isaac’s positioning is broader. "If you asked them what they do, they’d say they’re a data management company," he said. "We have that. We view that as a means to an end. You have to have good data management in place to support your marketing programs. What good is all that stuff if you’re not applying it to answer the questions about marketing?"

Peg Smith, exec VP-strategic business development and investor relations for Experian North America, disagreed with Howe’s assessment, saying Experian provides "direct marketing information" in addition to credit scoring. "As a result of Experian’s expertise in data management and predictive sciences, we are uniquely capable of leveraging our deep knowledge of data and our expert skills in scoring analytics and consulting to help clients identify, understand and solve credit and marketing problems."

Increased visibility

In order to tout its expanded services, Fair Isaac has raised its visibility. It had a booth at the Direct Marketing Association’s Annual Conference & Exhibition last month for the first time in a few years, and will continue to exhibit at relevant shows, Howe said.

The company will publish a book next year that Howe said will "focus on best-of-breed [marketing] efforts." It also plans to increase its "feet on the street" by hiring additional salespeople.

And acquisitions remain a priority. The company is looking at adding loyalty marketing capabilities through acquisition.

Fair Isaac’s ultimate goal is to create a "marketing score" system, similar to its well-known FICO score, which helps the financial community set interest rates and decide whether to grant credit and approve loans. Howe conceded that could be a challenge. "If there could be one, that would be great," he said. "But marketing is a little more complicated than the FICO score."

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