Brandon Purcell, Senior Analyst WEBINAR Benchmark Your Customer Insights Success With Forrester’s State Of Customer Analytics 2016 Survey Data Brandon Purcell, Senior Analyst January 11, 2017. Call in at 10:55 a.m. Eastern time

In the age of the customer, we gather massive amounts of data Financial data Sales data Product data Transaction data Customer data Third-party data Behavioral data Social data Mobile data Environmental data Sensor data

“We are drowning in data and starving for insight.” — Global Bank

Customer insights are the gold buried within your data.

Customer analytics unlocks the potential value in your data P = potential value of data E = value extracted from data

What is customer analytics? Customer analytics uses customer data and analytic insight to design customer-focused programs that win, serve, and retain customers.

The potential value for analytics is real across the customer life cycle. Source: How Analytics Drives Customer Life-Cycle Management Forrester report

Customer analytics is different. Really. Methods Data Technology Data science and customer analytics Prescriptive Multisourced, in-motion, multistructured Optimization Decision arbitration Sensor, open data, IoT data, device data Non-relational Hadoop, noSQL Predictive Externally-sourced, unstructured Predictive modeling Forecasting Simulation Social, location, VoC Traditional analytics Descriptive Internally-sourced, at-rest, structured Relational Reporting and measurement Business intelligence CRM, EDW, POS, web Traditional EDWs

However, customer analytics can be as confusing as it is exciting Machine learning Predictive analytics Data visualization Artificial intelligence Data mining Text mining Statistical analysis Forecasting Simulation Discovery/ exploratory analytics Optimization NLP

Deciding where to begin may be the hardest part. Source: TechRadar™: Customer Analytics Methods, Q2 2016 Forrester report

The analytical process begins and ends with business requirements. Source: Close The Insights-To-Action Gap With A Clear Implementation Plan Forrester report

Key business questions before beginning analysis What is the key business objective of the project? Who is the project owner? Who are the relevant stakeholders? What will the cost and benefits of the project be? Are there risks/constraints we need to take into account? What would an ideal solution look like in action? How will we measure the success of this project? What is my project plan?

Now, let’s turn to the data.

Customer data ain’t what it used to be Image source: Wikipedia (https://en.wikipedia.org/wiki/Main_Page)

Actually . . . in analytical terms, there are only a few types of data Data type Definition Examples Numerical Continuous All numerical values, including fractions Purchase amount Discrete Only integer values Website visits Categorical Nominal Qualitative data without order Region Ordinal Ordered qualitative data Level of education Binary Qualitative data with two values Offer click Time and date Time and data Timestamp String Text data Email content

Choosing the right analytical method depends on your business objectives and your data Customer analytics

Chez Customer Analytiques Now, let’s explore the menu. Chez Customer Analytiques

CI pros have a wide range of options to choose from Source: TechRadar™: Customer Analytics Methods, Q2 2016 Forrester report

Methods that improve the customer experience Customer experience analytics methods: Customer satisfaction analysis Customer engagement analysis Customer journey analysis Source: TechRadar™: Customer Analytics Methods, Q2 2016 Forrester report

Methods that drive personalization Personalization analytics methods: Next best action Recommendation analysis Cross-sell and upsell analysis Source: TechRadar™: Customer Analytics Methods, Q2 2016 Forrester report

Methods that increase retention and loyalty . . . Retention and loyalty analytics methods: Customer propensity analysis Churn and attrition analysis Social network analysis Source: TechRadar™: Customer Analytics Methods, Q2 2016 Forrester report

Methods that drive acquisition . . . Acquisition analytics methods: Behavioral customer segmentation Customer lifetime value analysis Customer lookalike targeting Source: TechRadar™: Customer Analytics Methods, Q2 2016 Forrester report

Methods that inform contextual marketing Contextual marketing analytics methods: Sentiment analysis Customer location analysis Customer device usage analysis Source: TechRadar™: Customer Analytics Methods, Q2 2016 Forrester report

Identify dependencies between methods Source: TechRadar™: Customer Analytics Methods, Q2 2016 Forrester report

Aren’t we forgetting something? Business objective Data Customer analytics

Aren’t we forgetting something? Business objective Data Customer analytics Action

New methods deliver new output and require new operational processes

The current state of affairs

The state of customer analytics survey Fielded by Forrester and Burtch Works to senior-level analytics professionals in March 2016 142 respondents answered the survey in its entirety. Half of respondents have more than 13 years of measurement and analytics experience. More than three-fourths of respondents are influencers or decision-makers in their organizations. Broad industry representation: 25% retail, wholesale, and CPG

Customer analytics — key drivers and challenges Source: The State Of Customer Analytics 2016 Forrester report

Key phases of the insights life cycle Action Data © 2014 Teradata

Top data sources Source: The State Of Customer Analytics 2016 Forrester report

Top analytics techniques Source: The State Of Customer Analytics 2016 Forrester report

Planned analyses focus on customer relationship management. Source: The State Of Customer Analytics 2016 Forrester report

Top applications of insights Source: The State Of Customer Analytics 2016 Forrester report

Forrester’s analytics sophistication model exposed three distinct groups:

What sets leaders apart?

Analytics sophistication grows as leaders . . . Source: The State Of Customer Analytics 2016 Forrester report

. . . use more data sources . . . Source: The State Of Customer Analytics 2016 Forrester report

. . . combine multiple analytics techniques Source: The State Of Customer Analytics 2016 Forrester report

. . . and apply marketing insights broadly across channels Source: The State Of Customer Analytics 2016 Forrester report

Recommendations

Take Forrester’s assessment for customer analytics — measure your capabilities across six dimensions Commitment Adoption Applications Skills Structure Partnerships Sources Management Preparation Methodology Metrics Business KPIs ROI Workflow Prioritization Execution Sharing Production Consumption Activation Strategy Organization Data Analytics Process Technology

Results reveal four analytics personas Strategy Organization Data Analytics Process Technology Rookies Dabblers Pros Gurus

Start by defining your customer analytics strategy Organization/ process Technology Data Analytics and measurement

Organize for analytics

Develop ROI calculations to prioritize projects and measure impact Just 26% report that measurement and analytics projects are prioritized based on a methodical ROI/business justification process.

Invest in scalable customer data architecture.

Jumpstart your capabilities with an analytics service provider 38% report partnering with analytics consultants or offshore analytics specialists.

Apply analytics across the customer life cycle

Don’t be afraid to get your hands dirty.

It will be worth the effort.

Brandon Purcell +1 510-926-2694 bpurcell@forrester.com