1. Transforming Customer Engagement
with IBM Watson
Vince Padua, Director, IBM Watson
Rahul Garg, Product Manager, IBM Watson

2. The interactions customers want
Examples of cognitive computing
The role of cognitive computing

3. The information is available today but
the systems can’t use it effectively
Information is unstructured
• Structured data from CRM systems and ERP systems provide a small
portion of the information needed
Information is spread across many systems
• Product Manuals
• FAQs
• Knowledgebases
• Call notes
• Forums
• Reviews
• Blogs

4. Mobile:
• Customers demand great experiences on their
mobile devices across their relationship with you
Personal:
• Customers expect you to know them across
channels and personalize your interaction
Self - Service:
• Customers are embracing self-service options
75%
75% of customers prefer
some form of self-service
for simple inquiries
91%
91% of Smartphone users
say they would use an
online knowledgebase if it
was tailored to their needs
Customers want this type of interaction

5. Today the Customer Service department
manually brings the information together
Lower customer satisfaction
$300B
Organizations spend
over $300B annually on
contact center labor
42%
% of service agents
unable to efficiently
resolve customer issues
due to disconnected
systems, archaic user
interfaces, and multiple
applications
11%
Average amount of time
agents spend looking for
information needed to
manage customer
interactions
Fewer deflected calls
Lower first call resolutions
Higher average handle times
COSTS
SERVICE

6. The effects of poor service ripple beyond
the Contact Center to Marketing
6-7X
It is 6-7 times more
costly to attract a new
customer than to retain
an existing one
4X
Customers are 4 times more
likely to buy from a
competitor if the problem is
service related vs. price or
product
Poor service
• Increases customer churn
• Reduces loyalty and share of wallet
• Reduces word of mouth advocacy
and net promoter scores
• Drives up marketing costs
66%
Percent of customers willing
to spend more with a
company they feel provides
excellent customer service
(on average 13% more)

7. The effects also ripple to Sales
45%
% of US consumers that
abandon an online
transaction if their
questions or concerns are
not addressed quickly
55%
% of consumers that have
intended to conduct a
business transaction or
make a purchase, but
decided not to based on a
poor service experience
Poor service
• Reduces sales revenue
• Increases cart
abandonment
83%
of consumers require some
degree of customer support
while making an online
purchase

8. The interactions customers want
Examples of cognitive computing
The role of cognitive computing

9. Perceiving:
Watson understands the world as we do: it interprets sensory
input beyond traditional data
• Understands
natural
language
• Reads
manuals,
social
data,
blogs,
consumer
reviews,
etc.
Reasoning:
Watson thinks through complex problems: it deepens our
analysis and inspires creativity
• Makes
inferences
• Evaluates
pros
and
cons
• Finds
rela=onships
between
terms
and
concepts
Relating:
Watson understands how we communicate, and personalizes
its interactions with each of us
• Responds
in
natural
language
• Personalizes
the
interac=on
and
provides
reasons
Learning:
Watson learns from every interaction, scaling our ability to build
experience
• Trains
with
experts
and
improves
with
feedback
Watson
is
a
learning
system
that
augments
human
cogni2on;
scaling
people’s
abili2es
to
perceive,
reason
and
relate

10. Decision Maker
Decision Maker
Search Engine
Finds Documents Containing Keywords
Delivers Documents Based on Popularity
Has Question
Distills to 2-3 Keywords
Reads Documents, Finds
Answers
Finds & Analyzes Evidence Watson
Understands Question
Produces Possible Answers & Evidence
Delivers Response, Evidence & Confidence
Analyzes Evidence, Computes Confidence
Asks NL Question
Considers Answer & Evidence
Decision Maker
Cognitive conforms the technology to the
user; Keywords force the user to conform
“My husband hardly ever uses his phone, which
plan is right for him?
“I need a window covering for my dining room. I want the natural
light, but in the morning the sun shines in low and I have to close
the shades.”

11. The interactions customers want
Examples of cognitive computing
The role of cognitive computing

12. Watson
Engagement Advisor
1
2
© 2014 International Business Machines Corporation

13. 13
The core of Watson is a learning system that works by
understanding both customers and knowledge
Multiple interpretations
Hundreds of answer
sources
• Primary search
• Candidate answer generation
Tens of thousands of evidence
sources and scores
• Answer scoring
• Evidence retrieval
• Deep evidence scoring
Learned models
• Combine and weigh evidence
Inquiry analysis Decomposition Hypothesis generation Synthesis
Hypothesis and
evidence scoring
Final confidence
merging and ranking
Question Answer
? !
© 2014 International Business Machines Corporation

14. 14
Gary
This evidence suggests
“Gary” is the answer BUT
the system must learn that
keyword matching may be
weak relative to other types
of evidence
In May 1898 Portugal celebrated the
400th anniversary of this explorer’s
arrival in India.
Legend
Key word hit
“Reference text”
Answer
Question:
In May, Gary arrived in India after he
celebrated his anniversary in
Portugal.
Supporting evidence:
Answering complex questions requires more than keyword
evidence
“explorer”
“India”
“In May
1898”
“India”
“In May”
“celebrated”
“anniversary”
“in
Portugal”
“Portugal”
“400th
anniversary”
“celebrated”
“arrived
in”
“arrival
in”
“Weak evidence”
© 2014 International Business Machines Corporation

15. 15
“27th May
1498”
Vasco da Gama
“landed
in”
“arrival in”
“explorer”
“India”
Paraphrases
Geo-KB
Stronger evidence can be
much harder to find and
score…
§ Search far and wide
§ Explore many
hypotheses
§ Find judge evidence
§ Many inference
algorithms
“400th
anniversary”
“Portugal
”
“May
1898”
“celebrated”
In May 1898 Portugal celebrated the
400th anniversary of this explorer’s
arrival in India.
“Kappad
Beach”
Legend
Temporal reasoning
“Reference text”
Answer
Statistical paraphrasing
GeoSpatial reasoning
Question:
On the 27th of May 1498, Vasco da
Gama landed in Kappad Beach.
Supporting evidence:
Date Match
Watson leverages multiple algorithms to perform deeper
analysis
© 2014 International Business Machines Corporation

16. 16
Watson Engagement Advisor delivers the next wave
of customer engagement through cognitive computing
© 2014 International Business Machines Corporation
16
• Automates customer interaction to
increase customer engagement in sales
and service
• Transforms customer engagement by
knowing, engaging and empowering
clients
• Develops customer relationships through
a transformative user experience
What it does
• Provides answers not links and
webpages
• Answers with evidence not guesses
• Not restricted to a predefined question-
answer set
• Learns from every interaction
How it does it

17. 17© 2014 International Business Machines Corporation
New agents need
to get up to speed quickly
and demonstrate value
Customers (Millennials):
Customer demographics and expectations are shifting, creating
challenges with traditional service environments
Agents:
Expect instant responses
that understand them
Goal is to take action
immediately
Increase in mobile use reduces
reviewable information
Customer insight is lost
as many don’t call and
transactions are separated
Issues:
Promotions can be
overlooked decreasing
customer lifetime value

18. 18© 2014 International Business Machines Corporation
Watson helps new agents
become productive quickly
Watson helps Millennials
get instant answers
across devices
Watson integrates processes to
enable action
Watson reads information
to net it out for customers
on mobile screens
Watson captures
interactions over time for
identification of new insights
Watson surfaces
promotions in discussion,
increasing visibility
Customers (Millennials):
Watson enables transformational customer engagement
improving the customer experience and business value
Agents:Solutions:

19. 19
A mobile phone provider
plans to use Watson to
differentiate the company
with personalized service
and support.
Needs
1. Meet changing
expectations
2. Reduce churn
3. Beat competition
Solutions
1. Omni-channel self-
service
2. Guide through
processes
Benefits
1. Increase loyalty
2. Decrease churn
3. Grow customer base
©2014InternationalBusinessMachinesCorporation
19

20. 20
Self-service User Experience
Here is what you
are looking for.
Here it is.
Shall I complete
the task for you?
Here it is,
complete. Also,
this new info might
be helpful.
How did it go?
Can I assist with
these next steps?
Knowledge Expert Empowered Assistant Personal Advisor
Ask a question Get answers Ask a questionGet answers
Get action
Ask a question Get answers
Get action
Get suggestions
Get follow-up
Recommended(AnalyticEngine)
2
0
Value
Customer Satisfaction

21. 2121© 2014 International Business Machines Corporation
Shannon is…
the unconfident agent
□ A new employee
□ Wants what’s best for customers
□ Spends too much time searching for
answers
□ Feels inferior when asking for
guidance from peers
IBM Watson is…
the Cognitive Agent Advisor
■ Provides answers from trusted information
■ Uses natural language
■ Offers more visibility of customer needs
■ Tailors proactive service to each individual
■ Decreases need for supervision
■ Creates efficiencies

22. 2222© 2014 International Business Machines Corporation
Jim is…
the busy, capable customer
□ A multi-line customer for years
□ Busy, rarely available during normal
business hours
□ Prefers self-service
□ Calling into a contact center will
instantly put him in a bad mood
IBM Watson is…
the Empowered Virtual Agent
■ Transforms customer self-serve with the
ability to answer questions
■ Can complete transactions
■ Provides personalized and proactive
recommendations
■ Uses an intuitive text/voice interface
■ Continues learning from prior interactions

23. 23
To add mobile hotspot to your
iPhone, simply launch setting,
cellular and select mobile hotspot.
You may have to restart your phone
once added. You can also order
online by logging in to your account.
Watson helps Shannon and Jim
© 2014 International Business Machines Corporation
Knowledge Expert Empowered Assistant Personal Advisor
23
How expensive is it for a customer
to add a new line to their account?
It should be 9.99 for customers
already in a family plan.
How do I upgrade my customer
to the latest device?
1) On the NPC screen, select
Prices and Promotions.
2) From the Sales Offer Mode
(SOM), select Upgrade >
Waive Activation if
appropriate
How do I add Mobile Hotspot
to my iPhone?
I see you have a family plan
with 4 lines. You also have
2GB of data per line. We have
a new family share plan that
you are eligible for, $160 /
Month includes Unlimited Text,
Unlimited Talk and 10GB of
shared data.
My bill is too high.
I’d like to learn more about
the new shared family plan.
Ok. Let me connect you with
an agent to provide you more
information on plan eligibility.
Hi Jim. This is Shannon. I see
you’re interested in learning more
about the new shared family plan…
Hi Jim, I’ve noticed you’ve been
spending more on international roaming
recently Did you know that we offer an
international roaming package that is
available to you for only $46 extra per
month which can be turned on and off
at any time. Would you like to add the
international roaming packages?
Yes, please add the international
roaming packages to my account.
I’ll make that change now. Give me a
moment to add International roaming…
I added international roaming package,
and backdated the addition so you
save $30 on your last month bill
I notice you’ve had some late charges.
Can I help you avoid future charges by
setting up AutoPay or changing your
bill date?
Yes, I’d like to set up AutoPay....

24. 2424© 2014 International Business Machines Corporation
Watson on Watson Demo