Combining Analytics and Experience For Digital Differentiation
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Transcript of Combining Analytics and Experience For Digital Differentiation
Digital IntelligenceCombining Analytics And Experience For
Digital Differentiation
James McCormick, Principal Analyst
AT Internet 2016
1© 2016 Forrester Research, Inc. Reproduction Prohibited
Image Source: Jeremy Segrott https://www.flickr.com/photos/126337928@N05/24545512250
The age of the customer is upon us …
… brought on by the winds of digital change
© 2013 Forrester Research, Inc. Reproduction Prohibited 2© 2015 Forrester Research, Inc. Reproduction Prohibited 2
Drive systems of
engagement with
systems of insight
Source: The “Digital Insights Are The New Currency Of Business [119109]” Forrester report.
© 2016 Forrester Research, Inc. Reproduction Prohibited 3
Digital engagement evolution
Source: The “Optimize Customer Experiences With Digital Intelligence [61276]” Forrester report.
2000 to 2006 2011 to present1993 to 1999 2007 to 2010
Web server logs Web behavior Digital behavior Digital intelligence
THE GOLDEN AGE OF WEB ENGAGEMENT
Traditional systems of insight can’t keep
up with digital customer engagement
© 2016 Forrester Research, Inc. Reproduction Prohibited 5
Finding digital intelligence
© 2016 Forrester Research, Inc. Reproduction Prohibited 6
Building your digital intelligence practice
Ownership Structure:
Hire and organize analytics staff to support the digital business model
across the enterprise
Technical Approach:
Bring together multiple technical components for data management,
analysis, and actionability
Metrics & KPIs:
Collect a swath of measurements including those that help understand
customers and gauge business success of touchpoints
Optimization:
Apply a continuous optimization approach across the lifecycle that can scale using automation and advanced
analytics
Strategic Approach:
Align the digital intelligence strategic components to support
customer obsession
Source: The “Elevate Customer Obsession With A Digital Intelligence Strategic Plan [116872]” Forrester report.
© 2016 Forrester Research, Inc. Reproduction Prohibited 7
Source: The “Organize For Digital Intelligence With These Three Models [114901]” Forrester report
Digital intelligence organization
Dedicated analytics for each LOB
Centralized channel analytics
teams serve all LOBs
Center of excellence
Coordinated
Decentralized
© 2016 Forrester Research, Inc. Reproduction Prohibited 8
Data
Tag
management
Data
warehousing
Optimization
RecommendationsOnline
testing
Behavioral
targeting
Analytics
Web
analytics
Voice of
the customerSpatial analytics
Social
analytics
Predictive
analytics
IoT
analytics
Interaction
analytics
Cross-channel
attribution
Application
analytics
Digital touchpoints
Customer context and behavior
Source: The “TechRadar™: Digital Intelligence, Q2 2016 [76021] Forrester report”
The complete digital intelligence architecture
Digital
performance
management
No single
platform
does it all!
© 2016 Forrester Research, Inc. Reproduction Prohibited 9
Digital intelligence delivers proven value
Source: The “TechRadar™: Digital Intelligence, Q2 2016 [76021]” Forrester report.
TechRadar™: DIGITAL INTELLIGENCE, Q2 2016
› Must haves:
• Data warehousing, tag
management, web
analytics, app analytics,
performance monitoring
& optimization tools
› Web analytics is still a
core digital intelligence
technology
› App analytics is complex
and use is growing
› IoT and spatial analytics
technologies are still
maturing
10© 2016 Forrester Research, Inc. Reproduction Prohibited
Experience
Expectation Perceived Value
Voice of the
customer metrics
Digital performance
metricsContextual metrics
Channel metrics
Life-cycle metrics
Conversion metrics
Social metrics
Attribution metrics
Competitive metrics
Optimization
metrics
A complete set of metrics for understanding
digital interactions
© 2016 Forrester Research, Inc. Reproduction Prohibited 11
Evolves & optimizes customer experience
Leverages every
customer interaction
Evolves customer
understanding
Evolves
interaction
treatment
Customer interaction
Customer understanding
Customer treatment
Intelligent and continuous optimization
© 2016 Forrester Research, Inc. Reproduction Prohibited 12
Multivariate
testing
The ideal state of continuous optimizationCOMMON DIGITAL MARKETING OPTIMIZATION TECHNIQUES
A/B testing
Traditional
segmentation
Rules-based targeting
Algorithmic targeting
Recommendations
Paid search
Programmatic buying
Segment discovery
Manual Automatic
Ad
van
ced
an
aly
tics
Bu
sin
ess r
ule
s
Manual and rules-
driven approaches are
still very important
To scale, you must
consider automated
processes driven by
advanced analytics
13© 2016 Forrester Research, Inc. Reproduction Prohibited 13
Shop Direct assessment:continuous optimization
Assessment
CO IS A STRATEGIC INITIATIVE
Value gained• Optimization tech ROI is
up to 20%
• Key acquisition conversion
metrics are 6% desktop,
3% mobile
• Validated that cross-
channel engagements
increased conversion
What they do:• Optimization is a key
corporate strategy
• 60+ tests/ month:
MVT, A/B/n
• Recommendation
engines
• Fail fast and learn
• Most visits have
optimization applied
Source: The “Transform Customer Experience With Continuous Optimization [116870]” Forrester report
Use of optimization techniques
Proportion of channels optimized
Optimization coverage across
customer lifecycle
Proportion of engagements
optimized
Good
© 2016 Forrester Research, Inc. Reproduction Prohibited 14
Stitch Fix has embedded insights into the fabric of its business
Source: “The Insights-Driven Business [135823]” Forrester report
© 2016 Forrester Research, Inc. Reproduction Prohibited 15
Attract student borrowers
Fine degree of pricing discrimination
• Avoid the good looking “baddies”
• Price for bad looking “goodies”
Engage only during moments of need
Use customer data and credit scores
Stay connected
Continuously collect all sorts of data
• Historical data around decisions
(approvals and rejections)
• Keep data on those who refused loans
• Collect & connect 100K data
points/person (income, 6 months financial
transactions etc..)
Strategy
Customer data
Continues optimization algorithm
• Creates high fidelity decision spectrum
between good and bad borrowers
• Refines and adjusts decision-making
• Make fine grain decisions
• Provides nuanced decisions over time
Insights driven What else do they do differently?Execs are insights-driven to the core
• Learn from other insights-driven business
• CDO came from Netflix
Run business like SW company
• CTO run software engineering
Embed data scientist into the product teams
Insights-driven financial services
© 2016 Forrester Research, Inc. Reproduction Prohibited 16
Source: The “Predictions 2017: Artificial Intelligence Will Drive The Insights Revolution” Forrester report (coming soon)
Data and analytics: 2017 and beyond› Contextual data will truly contribute to mainstream customer
understanding
• Mobile measurement will be backed into omnichannel views
• Two in three firms will use customer location data in 2017
› Customer insights will become an enterprise priority
• In 2017 a (small) majority of firms will have a CDO
• A majority of firms will invest in big data integration initiatives
› Artificial intelligence (AI) and big data will become common CI practice
• Only 10% invested in AI in 2016. Over half will invest in 2017
• Application vendors will bake AI, big data, and IoT into their insights solutions