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Customer Analytics Pay Off - Bringing Science to the Art of Marketing

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by Marc Teerlink …

by Marc Teerlink
source: http://www-05.ibm.com/innovation/nl/smarterplanet/conversations/pdf/C4SP_M._teerlink_-_Organisation_Globally_Integrated_Worldm.pdf

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  • 1. May 2012Customer Analytics Pay OffBringing Science to the Art of MarketingMarc Teerlink © 2011 IBM Corporation
  • 2. Customer Analytics Pay OffBringing Science to the Art of Marketing 1 How well do you understand that you are being commoditized? 2 How well do you know the channels and business partners? 3 How well are you constantly present with your customers? 4 How well do you adapt business models? There are four key questions you need to answer to survive the futureSource: IBM Institute of Business Value Executive Report, Customer Analytics Pay Off, 2011 IBM Corporation
  • 3. Analytics Correlates to Performance "companies leading in use of predictive analytics and executing effectively across [brands and] multiple channels have been able to increase top-line growth up to five times more than their less sophisticated peer group" 5x Source: IBM Institute of Business Value Executive Report, Customer Analytics Pay Off, 2011 IBM Corporation
  • 4. Analytically Sophisticated Enterprises Outperform 1.6x 2.0x 2.5x Revenue EBITDA Stock Price Growth Growth Appreciation What makes them smarter? they are able to… Treating Across Channels Exception Based, External Focused Information and Value Chain Information Forward Looking, Foresight as an Asset (upstream and/or downstream) management Action OrientedSource: IBM Center for Applied Insights, State of Smart Study, 2012 IBM Corporation
  • 5. Leading Companies executed Customer Analytics Strategiesthat helped them to drive Top-line Growth Customer Analytic Strategies Information Widening the Information Predictive & Customer Efficiency Eco-system Faster to Respond Foresight Treating Across Channels Exception Based, External Focused Information and Value Chain Forward Looking, (upstream and/or Action Oriented as an Asset downstream) Information Dynamic management Multi-Channel Next Integrated Information ∑ External Data Best Action Segmentation proficiency Demand Chain Fact Based Marketing Consistent Information ∆ Big Data integration Information Information Information Information Sharing Cost Reduction Responsiveness on Demand 5 | May 2, 2012 Marc Teerlink IBM Corporation
  • 6. Navigating the stages of the analytics framework Analytics framework Capability to move Capability to adapt from reaction to business models prediction that enable faster creation of value Capability to gain Capability to share insight from the information internally information explosion and across value chain Internal External data sharing data sharingAnalytics Strategies that successfully enabled the realization of Growth Driving Organizational Capabilities IBM CorporationSource: “Customer analytics pay off, Driving top-line growth by bringing science to the art of marketing”,, Marc Teerlink and Michael Haydock, IBM Institute for Business Value October 2011,
  • 7. Proven Benefits vs Analytic Strategies Analytics Framework        Mass Marketing / Traditional Trade Promotion 0.2 -- 2.9%  Target Marketing / Campaign Management 1.9 -- 4.8%  Integrated Multi Channel Marketing 6.2 -- 18.7%  External Data Change/Event-Driven Marketing 16.9 -- 38.2%  Demand Marketing / Predictive Marketing 24.1 -- 64.3% Converted Response rates (n=728, US, AUS & Western Europe, 1999-2010)Source: “Customer analytics pay off, Driving top-line growth by bringing science to the art of marketing”,, Marc Teerlink and Michael Haydock, IBM Institute for Business Value October 2011, IBM CorporationData and other visualizations can be found at : http://www-958.ibm.com/software/data/cognos/manyeyes/visualizations/converted-response-lower-upper-int
  • 8. Customer Analytics Pay OffBringing Science to the Art of Marketing 1 1 How well do you understand that you are being commoditized? 2 How well do you know the channels and business partners? 3 How well are you constantly present with your customers? 4 How well do you adapt business models? There are four key questions you need to answer to survive the futureSource: IBM Institute of Business Value Executive Report, Customer Analytics Pay Off, 2011 IBM Corporation
  • 9. GAIN INSIGHT FROM THE INFORMATION EXPLOSION Leverage Data Quality and Master Data Management to enable the transformation to Transparency, Accountability, Ownership, and Governance in order to be able to Manage customer1 relationships for profits, not for sales What kind of Customers do we have? + - + Strategic Accounts? + - - Derived from "Manage Customers for Profits (Not Just Sales)“ by Benson P. Shapiro, V Kasturi Rangan, IBM Corporation Rowland T.Moriarty, and Elliot B. Ross, Harvard Business Review Reprint 87513
  • 10. Customer Analytics Pay OffBringing Science to the Art of Marketing 2 1 How well do you understand that you are being commoditized? 2 How well do you know the channels and business partners? 3 How well are you constantly present with your customers? 4 How well do you adapt business models? There are four key questions you need to answer to survive the futureSource: IBM Institute of Business Value Executive Report, Customer Analytics Pay Off, 2011 IBM Corporation
  • 11. Integrated Information ; Engage the Entire Value Chain Visibility into every part of the value chain creates an ecosystem that enables an organization to capture and share collective wisdom, collaborate and make decisions with greater confidence . 2 LOW VISIBILITY HIGH VISIBILITYSuppliers Partners Suppliers Partners Employees Employees Customers Customers BIG IDEA Source: IBM Institute of Business Value Executive Report, Customer Analytics Pay Off, 2011 IBM Corporation
  • 12. Example : US Insurance Company : Real Time Analytic Matching, Multi Channel Campaign and Contract Optimization Contact Stream By Cluster with Timing 4 “Your claim has been fast tracked. Payment is being processed now...” 4 3 “Please tell me about the collision in your own words.” 2 2 3 “Was anybody injured? (Y/N) Total damage? ($)” 1 Contact Center Analytics-based Matching “Thank you for calling. May I have •37% increase in Sales Revenue your name?” 1 •29% increase in conversion of Sales Leads •25% Reduction in Agent Attrition •20% Reduction in requests to DNC IBM Corporation
  • 13. Customer Analytics Pay Off 3Bringing Science to the Art of Marketing 1 How well do you understand that you are being commoditized? 2 How well do you know the channels and business partners? 3 How well are you constantly present with your customers? 4 How well do you adapt business models? There are four key questions you need to answer to survive the futureSource: IBM Institute of Business Value Executive Report, Customer Analytics Pay Off, 2011 IBM Corporation
  • 14. Move from Reaction to Prediction Apply advanced analytics and industry expertise to a wealth of 3 information in order to more precisely predict—and continuously act on—risks and opportunities. REACTION PREDICTION Goal Goal Unforeseen Decision Point Predicted Decision Point BIG IDEASource: IBM Institute of Business Value Executive Report, Customer Analytics Pay Off, 2011 IBM Corporation
  • 15. The goal of the project is to “take the largestExample: sports brand in the world and turn it into largest participatory brand in the world.”* Inside Gatorade’s Social Media Command Center http://mashable.com/2010/06/15/gatorade-social-media-mission-control/ * Bauerlein, Valerie. “Gatorade’s ‘Mission’: Sell more drinks.” The Wall Street Journal. September 13, 2010. http://online. wsj.com/article/SB100014240527487034667045754896732 44784924.html Source: IBM Institute of Business Value Executive Report, Customer Analytics Pay Off, 2011 IBM Corporation
  • 16. Customer Analytics Pay Off 4Bringing Science to the Art of Marketing 1 How well do you understand that you are being commoditized? 2 How well do you know the channels and business partners? 3 How well are you constantly present with your customers? 4 How well do you adapt business models? There are four key questions you need to answer to survive the futureSource: IBM Institute of Business Value Executive Report, Customer Analytics Pay Off, 2011 IBM Corporation
  • 17. Create Value Faster Operate with speed by delivering trusted insight that 4 gives decision-makers the confidence to take action faster, driving innovation and optimizing business results. INFORMATION Action GATHERED OVER TIME Risk/ Information Information Information Information Opportunity TIME INSTANT Action INSIGHT High confidence Low confidence InsightSource: IBM Institute of Business Value Executive Report, Customer Analytics Pay Off, 2011 IBM Corporation
  • 18. Example US Retailer : Foresight: Marketing channel optimizationFour major sub-systems: Economy, Customer, Channel Analysis, and Optimization Economy Optimization IBM R&D Innovation Customer Behaviors IBM R&D Innovation Each pass makes over 80K total Channel decisions and considers 10K-20K different alternatives Analysis IBM R&D Innovation IBM R&D Innovation 18 | May 2, 2012 Marc Teerlink IBM Corporation
  • 19. Getting through the Fourth Quadrant by Smarter Analytics- The next Three Years• Learn with each iteration• Capable of navigating human speech• Dynamically evaluating hypothesis to questions asked• Responses optimized based on relevant data• Ingesting and analyzing Big Data• Discovering new patterns and insights seconds 19 | May 2, 2012 Marc Teerlink IBM Corporation
  • 20. Navigating the stages of the analytics framework Analytics framework Capability to move Capability to adapt from reaction to business models prediction that enable faster creation of value Capability to gain Capability to share insight from the information internally information explosion and across value chain Internal External data sharing data sharingAnalytics Strategies that successfully enabled the realization of Growth Driving Organizational Capabilities IBM CorporationSource: “Customer analytics pay off, Driving top-line growth by bringing science to the art of marketing”,, Marc Teerlink and Michael Haydock, IBM Institute for Business Value October 2011,
  • 21. Securing Success in Every StepGovernance and Culture Change – Treating Information as an AssetSource: IBM Institute of Business Value Executive Report, Customer Analytics Pay Off, 2011 IBM Corporation
  • 22. Key questions to assess your current organizational capabilities1. Do you understand what drives your 4. What is your strategy for protecting target consumer’s purchasing your brand(s) in the marketplace? behavior? 5. How well can you integrate channels2. Do you understand in what areas and business partners? you are being commoditized? 6. How well are you geared up to adapt3. How do you communicate or change your business models? information with your customers and 7. Do you have a roadmap for how do you measure the customer analytics? effectiveness of your communications? 8. Within each customer analytics opportunity, do you start with questions, not data? Source: IBM Institute of Business Value Executive Report, Customer Analytics Pay Off, 2011 IBM Corporation
  • 23. Get Started Start with Use an Focus on the Embed insights to Keep existing questions Information biggest and drive actions and capabilities while Agenda to plan highest value deliver value adding new ones for the future opportunities In a world drowning in data, IBM´s approach ensures that you can realize the value of Smarter Analytics 23 | May 2, 2012 Marc Teerlink IBM Corporation
  • 24. http://www-935.ibm.com/services/us/gbs/thoughtleadership/bao.html Download the complete IBM Institute for Business Value studies VISIT THE ANALYTIC COMMUNITY www.analyticszone.com http://www-935.ibm.com/services/us/cmo/cmostudy2011/cmo-registration.html?cm_sp=MTE1868224 | May 2, 2012 Marc Teerlink IBM Corporation
  • 25. Want more examples ? Foresight: Media http://adage.com/article?article_id=146137 Optimization http://adage.com/article?article_id=147432 Loyalty & Affinity http://www.brandweek.com/bw/content_display/ Marketing news-and-features/shopper- marketing/e3i4ef51a35fea2a26d2bb005c48a53ec6 1 http://www.washingtonpost.com/wp- Industry Forecasting dyn/content/article/2010/11/14/AR201011 1404062.html http://articles.chicagotribune.com/2010-10- 21/business/ct-biz-1021-spending-black- friday-20101021_1_doorbuster-deals- shopping-day-retailers Direct Marketing Patented, Edelman Award Winning Analytics Capability Optimization (Representative Sample) Next Best Action www.mediapost.com/publications/?fa=Articles.sho Real-time Decisioning wArticle&art_aid=146430 www.nytimes.com/interactive/2010/06/16/magazi ne/watson-trivia-game.html IBM Corporation25
  • 26. How can IBM Help? IBM’s Business Analytics and Optimization services bring together a unique combination of expertise and capabilities to help your organization realize your analytics potential. Our capabilities include: An unmatched combination of skills and experience, including unrivaled breadth of deep foundational business intelligence, performance management and advanced analytics capabilities, including world-class software and IBM Research. Strong industry and business process expertise enabling us to apply proven industry models. Cross-industry and industry-specific best practices for how to manage information, and for next-generation value creation through the use of analytics and optimization techniques. Proven opportunity and stakeholder assessment techniques. A patented value case approach to develop trusted business cases. To learn more about how you can partner with IBM on your analytics journey, please visit ibm.com/gbs/bao. IBM Corporation
  • 27. IBM Corporation

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