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Acxiom Corporation Message Board

  • financeman20031 financeman20031 May 17, 2012 5:17 PM Flag

    Who or what is running this ship?

    How is it possible for a Company consistently doing over a billion a year in revenue make such small profits. This Company has a fair amout of IP and should be making at least 15% profit annually. Let me at it and I will fix it!

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    • Acxiom's business is inherently a low margin business, which nobody seems to want to accept. Like you, others have thought they could come in and raise profits through well-conceived changes in the business model.

      The last set of geniuses who thought that, and who are now gone on to wreak havoc elsewhere, recognized that the business requires highly skilled staff using highly sophisticated tools. Their answer was to dumb down both. They abandoned the highly successful proprietary tools that made Acxiom the leader in its industry and opted to run the same packaged software that its lesser competitors were using. This allowed them to let go of the developers who had created this unique software.

      Now that the systems were just off-the-shelf packages, they further assumed that any idiot should be able to run them. Thus, they ran off all of the sophisticated, expensive operations people in favor of hiring part-time people for $10/HR who worked either 8-12 or 1-5 without benefits. This, of course, left customer needs in the hands of people who had no knowledge of the business, had little knowledge of the systems they were running beyond submitting a job, and little if any dedication to their McJob.

      The highest margin business - consumer demographic data - was gutted by laying off all of those who focused on selling data. The assumption was that one person could service a single company and sell them everything Acxiom had, so why incur the cost of two salespeople in the same account. The only problem with that line of thinking is that demographics are purchased by a completely different part of a marketing organization than the other services, and the services salesperson is unlikely to have contacts or have luck penetrating that area without a deep knowledge of demographics and its applications. So the data business fell off by 70% after this move.

      In the meantime, Acxiom lost market share because they were fumbling with the same off-the-shelf products that competitors were already more adept at using. The most recent Forrester Report showed Acxiom behind 3 companies that a few years ago wouldn't even be mentioned in the same breath as Acxiom.

      Hopefully, the new management team can build something useable from the wreckage left behind for them. But if you think it's a simple issue of cutting costs and raising prices, you're in for a rude awakening.

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