A marketers guide to customer analytics people processes and technology A Marketer’s Guide To Customer Analytics: People, Processes & Technology Presentation Slides Webinar: IBM and Forrester 24 June 2013 Srividya Sridharan Analyst Serving Customer Insights Professionals Forrester Research Marygrace Bateman Market Manager IBM Heather Clancy Award-winning Business Journalist Webcast - http://goo.gl/Rld3T5

1. © 2013 IBM Corporation
A Marketer’s Guide To Customer Analytics:
People, Processes and Technology
Srividya (Sri) Sridharan, Analyst - Customer Insights, Forrester Research
Marygrace Bateman, Market Manager, IBM
July 24, 2013

2. © 2013 IBM Corporation2
Customer Analytics webinar series
 Previous Customer Analytics webinars – Now available OnDemand at
www.ibm.com/software/analytics/ca-webinars or in the Events widget
– Driving Relevant Business Insights From Social Media
– The ROI of Social Media is Social Media Analytics Applied
– 5 Steps to Nurture Customer Loyalty, and Increase Profitability, Now
– United Stationers Uses Smarter Marketing to Drive Customer Value

3. © 2013 IBM Corporation
Speakers
3
Marygrace Bateman
Market Manager
IBM
@bateman_mg
Srividya (Sri) Sridharan
Analyst - Customer Insights
Forrester Research
@Srividya

4. © 2012 Forrester Research, Inc. Reproduction Prohibited
#big data and marketing
What‟s trending now?
#customer analytics
#strategy #people
#strategy #process
#strategy #tech & services

5. © 2013 IBM Corporation
2+
billion
people on
the Web
by end
2011
30 billion RFID
tags today
(1.3B in 2005)
4.6
billion
camera
phones
world wide
100s of
millions
of GPS
enabled
devices
sold
annually
76 million smart
meters in 2009…
200M by 2014
12+ TBs
of tweet data
every day
25+ TBs of
log data
every day
?TBsof
dataevery
day
Current business and technology trends

6. © 2013 IBM Corporation
The uncertainty of new information is growing alongside its
complexity
2010
9000
2015
Sensors
& Devices
VoIP
Enterprise
Data
Social
Media
8000
7000
6000
5000
4000
3000
Source: IBM Global Technology Outlook 2012
IBM source data is based on analysis done by the IBM Market Intelligence Department. IBM Market Intelligence data
is provided for illustrative purposes and is not intended to be a guarantee of future growth rates or market opportunity
We are here.

7. © 2013 IBM Corporation
Under preparedness
Percent of CMOs selecting as “Top 5 Factors”
Data explosion 71%
Social media 68%
Channel & device choices 65%
Shifting demographics 63%
Financial constraints 59%
Decreasing brand loyalty 57%
Growth markets 56%
ROI accountability 56%
Customer collaboration 56%
Privacy considerations 55%
Global outsourcing 54%
Regulatory considerations 50%
Corporate transparency 47%
Need for change to deal with data explosion
and social media
Percent of CMOs indicating high/significant need
Invest in technology
Understand analytics
Collaborate with peers
Validate ROI
Address privacy
Integrate insights
Rethink skill mix
73%
69%
65%
64%
52%
49%
28%
Source: IBM’s 2011 Global CMO Study: From Stretched to Strengthened (2011)
IBM Global CMO Study: CMOs underprepared for new market
dynamics

8. “What enterprise areas does your big data initiative address?”
Base: 60 IT professionals
(multiple responses accepted)
Source: June 2011 Global Big Data Online Survey
Marketing leads the enterprise in Big Data initiatives

9. © 2012 Forrester Research, Inc. Reproduction Prohibited 9
#customer analytics

10. © 2012 Forrester Research, Inc. Reproduction Prohibited
What is Customer Analytics?
Customer analytics solutions (technology, software, or
services) allow firms to analyze customer data to optimize
customer decisions and use the analytical insight to design
customer-focused programs and initiatives that drive
acquisition, retention, cross-sell/upsell, and targeted
marketing campaigns.
Some examples of customer-focused applications of
analytics include customer segmentation, targeting,
customer profitability analysis, next-best-offer analysis,
profiling, and customer attrition assessment.
10

11. A regional bank uses uplift
response modeling to generate
incremental sales for direct deposit
acquisition campaign.
Image source: http://abcnews.go.com/

12. A financial services firm uses
cross-sell and next-best action
models to personalize offers at the
point of customer interaction.
Image source: http://www.gunster.com/practice/banking-and-financial-services/

13. Customer analytics drives value across the life-cycle
Source: July 29, 2011, “How Analytics Drives Customer Life –Cycle Management” Forrester report
WHO to
acquire/retain?
HOW MUCH to
spend?
WHEN to target?
WHAT to offer?

14. Customer analytics use is acquisition-heavy

15. Segmentation and targeting is bread and butter for
analytics users…..NBA, social, loyalty would be icing on
the cake

16. © 2012 Forrester Research, Inc. Reproduction Prohibited 16
#customer analytics
#strategy #people

17. Expert User Casual User

18. Marketing scientists must now translate „geek‟ to „Greek‟
Marketing scientists

19. © 2013 IBM Corporation
Product Marketing
...can identify the best
performing micro-
segments for a new
product offering
Brand Manager...can
understand and quantify
exactly how social media is
affecting my business and
the brand
CMOs
...can deliver personalized
and consistent value
across all channels at any
time to all customers
Demand Generation
...can always deliver the
customer the right offer
at the right time at the
right place
Marketing Operations
...can understand which
programs were best
performing across any
touchpoint or segment
Applying analytics to specific marketing functions
So that…
19

20. © 2013 IBM Corporation
IBM SPSS Analytic Catalyst Demo
20

21. © 2012 Forrester Research, Inc. Reproduction Prohibited 21
#customer analytics
#strategy #process

22. Four core activities define the customer analytics
process

23. Production
Consumption &
Activation

24. Identify the level of insights sharing across the
organization

25. © 2013 IBM Corporation
Gains a 360 degree view of customers to drive cross-brand, targeted marketing campaigns
The Opportunity
Redcats, a retail group in France that includes 17 major retail brands around the world, wanted to deepen the
customer experience across its brand websites by understanding how customers behave online. Each brand
was already collecting an enormous amount of data from both online channels and stores, but no one had a
complete, cross-brand view of customers.
4 Core Activities to Enable Customer Analytics Process:
Data Management: near-real-time stream of customer data is collected and stores in central database
(purchases, click streams, mobile app usage, online surveys, store transactions)
• Reduced data processing times by 90%
Redcats
Analytics Production: sophisticated statistical and predictive analytics used to analyze patterns in
customer behavior and demographics and use them to predict how customers will behave in the future
• Higher conversion rates due to rich understanding of why customers buy
Analytics Consumption: analysis tools available to statisticians and brand managers to gain insight into
cross-brand efforts; solution integrated in CRM
• Monitors customers tendencies and detects patterns in behavior used to predict response
Analytics Activation: analysis enables marketing teams to run personalized marketing campaigns
• Gained full payback on investment in 7 months, with total ROI of 122%, due to smarter targeting

26. Insight at the point of interaction is a key challenge
26

27. © 2012 IBM Corporation27
What does real-time optimization look like?

28. © 2012 IBM Corporation28
What does real-time optimization look like?

29. © 2012 IBM Corporation29
Structured,
unstructured,
social media
and business
intelligence
data
Business
rules
Optimization
Predictive
analytics

30. © 2012 Forrester Research, Inc. Reproduction Prohibited 30
#customer analytics
#strategy #technology and
services

31. The customer analytics ecosystem has three degrees of
separation
Source: November 2012 “Deciphering A Fragmented Customer Analytics Ecosystem”

32. Analytics/BI tops the list of marketers‟ technology needs
Marketing

33. © 2013 IBM Corporation
Customer analytics maturity model
.
.
.Insight for
Decision Makers
The Next
Best Action
Information Cost Reduction
Foundational
0.2% - 2.9%
Information Sharing
Competitive
6.2% - 18.7%
Information Responsiveness
Differentiating
16.9% - 38.2%
Information on Demand
Breakaway
24.1% - 64.3%

34. © 2012 Forrester Research, Inc. Reproduction Prohibited 34
#customer analytics
#takeaways

35. Customer analytics gets a makeover
Big Data poses new challenges for customer analytics, faced with three key
trends:
• Analytics production to analytics consumption and activation
• Expert user to casual user
• Static intelligence to dynamic, real-time intelligence
35

36. © 2013 IBM Corporation
Next Steps…
Identify place to start
• Focus on 1 business problem
• Perform cost/benefit analysis1
Leverage existing tools
• Team up business strategy + implementation strategy
• Start with readily accessible data, open architecture2
Execute
• Define achievable goals
• Build on small wins to launch larger initiatives3
Perform cost/benefit
analysis:
What is spend on avg.
marketing campaign now?
What if we could send offers
to 20% of our customers, but
receive 70% returns?

37. © 2013 IBM Corporation