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Big Data and Customer Experience

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These are the slides from a talk I gave at a Customer Experience Professionals Association event in San Mateo on February 26, 2014.

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Big Data and Customer Experience

  1. 1. Big Data and Customer Experience How may we help? info@tcelab.com Bob E. Hayes, PhD Winter 2014
  2. 2. Three Vs of Big Data Volume Velocity Variety http://blogs.gartner.com/douglaney/files/2012/01/ad949-3D-DataManagement-Controlling-DataVolume-Velocity-and-Variety.pdf INFOGRAPHIC from Domo June 2012
  3. 3. Big Data Definition An amalgamation of different areas* that help us get a handle on, insight from and use out of data * includes technology (Data Capture, Storage & Management, BI Reporting) and analytics
  4. 4. Big Interest in Big Data: Google Trends Customer Experience Big Data Scale is based on the average worldwide traffic of Customer Experience and Big Data from January 2004 to January 2014.
  5. 5. Big Data Landscape – bigdatalandscape.com Apps Infrastructure Technologies
  6. 6. Big Data for Business – Getting Value 5 High Value Use Cases* 1. Exploration Finding, visualizing and understanding all data to improve business knowledge to make better decisions 2. 360 degree view of customer Unified view that incorporates both internal and external sources of customer data 3. Security and Intelligence Detect threat & fraud, Governance & Risk Management, Monitor cyber-security 4. Operational Analysis 5. Data Warehouse Augmentation Leveraging machine data to improve results, Reduce resource costs Adding technology to data warehouse to increase operational efficiencies and explore more data. * Based on IBM’s review of over 100 real use cases: www.ibmbigdatahub.com/podcast/top-5-big-data-use-cases
  7. 7. What do customers think about Big Data? 1. Investing - $8M 2. But not seeing improvements in decision-making 3. As data source, internal company sources rule over social media 4. Non-technical factors are key to Big Data success From: Big Data Trends for 2014 - http://bit.ly/1dfQDPP
  8. 8. What do Big Data vendors think? 1.Analytics 2. Hadoop / Open Source 3. People 4. Data Integration 5. Privacy / Security 6. Applications 7. Data Veracity, Cloud, SQL From: The Big Picture of Big Data for 2014 - http://bit.ly/1aG1R5P
  9. 9. Value from Analytics: MIT / IBM 2010 Study Top-performing organizations use analytics five times more than lower performers http://sloanreview.mit.edu/the-magazine/2011winter/52205/big-data-analytics-and-the-path-frominsights-to-value/
  10. 10. Percent of VOC Executives / Customer Loyalty Percentile Rank Data Integration is Key to Extracting Value 100% 90% Ops Linkage Analysis No Ops Linkage Analysis 96% 80% 70% 72% 60% 50% 40% 51% 50% 30% 20% 10% 0% Percent of VOC executives Customer loyalty percentile who are satisfied with rank (within industry) program
  11. 11. Data in Customer Experience Management Operational 1. Call handling time 2. Number of calls until resolution 3. Response time Partner Feedback 1. Partner Loyalty 2. Satisfaction with partnering relationship Customer Feedback 1. Customer Loyalty 2. Relationship satisfaction 3. Transaction satisfaction Employee Feedback 1. Employee Loyalty 2. Satisfaction with business areas Financial 1. Revenue 2. Number of products purchased 3. Customer tenure 4. Service contract renewal 5. Number of sales transactions 6. Frequency of purchases
  12. 12. Integrate Data to Answer Different Questions • Linkage analysis answers the questions: – What is the $ value of improving customer satisfaction/loyalty? – Which operational metrics have the biggest impact on customer satisfaction/loyalty? – Which employee/partner factors have the biggest impact on customer satisfaction/loyalty? Operational Metrics Transactional Satisfaction Relationship Satisfaction/ Loyalty Constituency Satisfaction/ Loyalty Financial Business Metrics
  13. 13. Integrating your Business Data Customer Feedback Data Sources Financial (revenue, number of sales) Operational (call handling, response time) Transactional Survey (satisfaction/loyalty to company) Business Data Sources Relationship Survey (satisfaction with specific transaction/interaction) • Link data at customer level • Link data at transaction level • Quality of the • Satisfaction with the relationship (sat, loyalty) transaction impacts impacts financial metrics up/cross-selling • Link data at transaction level N/A (employee / partner feedback) (sentiment / shares / likes) • Link data at customer level • Quality of relationship (sentiment / likes / shares) impacts financial metrics • Link data at transaction level • Operational metrics impact • Operational metrics impact quality of the transaction sentiment / likes/ shares • Link data at constituency • Link data at constituency level level Constituency Social Media/ Communities • Link data at constituency level • Constituency satisfaction • Constituency satisfaction • Constituency satisfaction impacts customer impacts customer impacts customer satisfaction with overall satisfaction with interaction sentiment / likes / shares relationship
  14. 14. Financial Metrics / Real Loyalty Behaviors • Linkage analysis helps us determine if our customer feedback metrics predict real and measurable business outcomes Financial • Retention Relationship / – Customer tenure – Customer defection rate – Service contract renewal Social Media Business Metrics • Purchasing • Advocacy – Number of new customers – Revenue • Number of products purchased • Number of sales transactions • Frequency of purchases
  15. 15. VoC / Financial Linkage Customer Feedback Financial Metric for a specific customer (account) for a specific customer (account) x1 Customer (Account) 1 y1 x2 Customer (Account) 2 y2 x3 Customer (Account) 3 y3 x4 . . . xn Customer (Account) 4 . . . y4 . . . Customer (Account) n yn xn represents customer feedback for customer n. yn represents the financial metric for customer n.
  16. 16. Percent Purchasing Additional Software Value of Customer Loyalty 55% increase Disloyal (0-5) Loyal ( 6-8) Customer Loyalty Very Loyal (9-10)
  17. 17. Value of Social Sharing • Determine the social commerce value of a social media shares http://blog.eventbrite.com/social_commerce_a_look_from_our_london_office/
  18. 18. Operational Metrics • Linkage analysis helps us determine/identify the operational factors that influence customer satisfaction/loyalty Operational Transactional • Support Metrics Metrics / Social Media – – – – – – – – First Call Resolution (FCR) Number of calls until resolution Call handling time Response time Abandon rate Average talk time Adherence & Shrinkage Average speed of answer (ASA) Copyright 2012 TCELab
  19. 19. Operational / VoC Linkage Operational Metric Customer Feedback for a specific customer’s interaction for a specific customer’s interaction x1 Customer 1 Interaction y1 x2 Customer 2 Interaction y2 x3 Customer 3 Interaction y3 x4 . . . xn Customer 4 Interaction . . . y4 . . . Customer n Interaction yn xn represents the operational metric for customer interaction n. yn represents the customer feedback for customer interaction n. Copyright 2012 TCELab
  20. 20. Identify Operational Drivers Copyright 2012 TCELab
  21. 21. Identify Operational Standards Sat with SR Number of Calls to Resolve SR 1 call 2-3 calls 4-5 calls 6-7 calls 8 or more calls Sat with SR Number of SR Ownership Changes 1 change 2 changes 3 changes 4 changes 5+ changes Copyright 2012 TCELab
  22. 22. Web Service Metrics • Different objective service metrics – Self-service rate – Resolution time – Needed assistance – Time on site – Web analytics (% returning visitors; % visits from 3rd party) • Which matter to customers? – Correlate above metrics with service satisfaction and loyalty – “Customer-centric” metrics
  23. 23. Linkage Analysis • Data model associates customer feedback with objective metrics for each Web self service interaction Objective metric Customer feedback for a given Web self service interaction for a given Web self service interaction x1 Self service Interaction 1 x2 Self service Interaction 2 y2 x3 Self service Interaction 3 y3 x4 . . . xn Self service Interaction 4 Self service Interaction n y1 y4 . . . yn xn represents the objective metric for Web self service interaction for customer n. yn represents the customer feedback for Web self service interaction for customer n.
  24. 24. Identifying Customer-Centric Metrics
  25. 25. Selecting Your First Big Data Project • Identify/Discover all your data • Define your problem / Establish a compelling use case – Establish ROI • Select people before technology • Don’t introduce too many new skills Based on: http://www.ibmbigdatahub.com/blog/selecting-your-first-big-data-project
  26. 26. Patient Experience Example – US Hospitals • Identify all your data (Medicare) – Patient Experience, Health Outcomes, Process Metrics, Financial • Define your Problem – What can hospitals do to improve patient experience? – Does amount of hospital spend impact patient satisfaction/loyalty?
  27. 27. Data Integration in US Healthcare • US Federal Government (Medicare) tracks several metrics across US Hospitals Patient Experience • Overall Satisfaction • Likelihood to recommend • 8 dimensions • Nurse comm. • Doctor comm. • Room Quiet Health Outcomes • Mortality Rate / Survival Rate • Re-admission Rate Process Financial (Operational) • Safety • Medicare Measures Spend
  28. 28. PX for US Hospitals Map of US Hospitals and their Patient Experience Ratings - http://bit.ly/XqTbVF
  29. 29. Survival Rate for US Hospitals Map of US Hospitals and their Health Outcome Metrics - http://bit.ly/XX4QQ4
  30. 30. Patient Experience and Healthcare
  31. 31. Survival Rates Related to Loyalty Survival rate – heart attack 98.50 98.48 98.46 98.44 98.42 98.40 98.38 98.36 No Loyalty Moderate Loyalty High Loyalty
  32. 32. Medicare Spend for US Hospitals by State
  33. 33. Medicare Spend and Patient Experience From: A Good Patient Experience Does not Start with Medical Spending http://bit.ly/TPFDmR
  34. 34. The Data Scientist Data Science Skills 1. Quantitative 2. Computer Engineering 3. Business Acumen 4. Communication 5. Scientific Method From: The One Hidden Skill You Need to Unlock the Value of Your Data http://bit.ly/1giZGCA
  35. 35. Data Veracity The accuracy and truthfulness of the data and the analytic outcomes of those data From: In Data We Trust http://bit.ly/17BZWOe
  36. 36. Have a hypothesis(es)
  37. 37. Be aware of Biases / Avoid Cherry Picking
  38. 38. Know the Sample Size / Data Source
  39. 39. Know your Customer Metrics 1.What’s the definition? 2.How is the metric calculated? 3.What are the measurement properties? 4.How useful is it? From: Four things you need to know about your customer metrics - http://bit.ly/TYfkuQ
  40. 40. Big Data Implications for CX • Ask and answer bigger questions about your customers – Explore all business data to understand their impact on customer experience / loyalty • Build your company around your customers – Greenplum, Alpine Chorus – Cross-functional teams working together to solve customer problems • Use objective, “real,” loyalty metrics
  41. 41. Big Data Online Resources • KDnuggets.com • SmartDataCollective.com • AllAnalytics.com • • • • IBMBigDataHub.com SAS.com/big-data SAPBigData.com Oracle.com/bigdata
  42. 42. bob@tcelab.com @bobehayes businessoverbroadway.com/blog Big Data and Customer Experience How may we help? info@tcelab.com Bob E. Hayes, PhD Winter 2014
  43. 43. Big Data Market Continues Growth
  44. 44. Gartner’s Emerging Technologies Hype Cycle Gartner's 2013 Hype Cycle for Emerging Technologies - http://www.gartner.com/newsroom/id/2575515
  45. 45. Getting Value from Big Data • Marketing – Faster Reporting & Analytics, Predict Customer Behaviors, Sentiment/Social Media Analysis, Improve Campaign Effectiveness • IT – Real-time Streaming Data, Hadoop Analytics, Fast Development & Deployment, Enterprise-wide Integration • Finance – Threat & Fraud Detection, Reduced Resource Costs, Governance & Risk Management, Future-Proof Versatility • Infrastructure – High Availability, Analyze Machine Data, Archiving and Monitoring, Simplified Data Management Based on IBM Big Data Smart Sixteen Big Data Bracket.
  46. 46. The Patient Experience
  47. 47. Importance of CX is Over-inflated • Correlations between loyalty ratings and CX satisfaction ratings are driven by the fact that we use the same measurement method to measure each (ratings on bipolar scale in web survey) • Correlation between customer experience and recommending behavior: – CX and Likelihood to recommend: r = .52 – CX and Number of friends/colleagues: r = .28 • Consider using objective loyalty metrics www.businessoverbroadway.com/is-the-importance-of-customer-experience-over-inflated
  48. 48. Value from Analytics: Accenture 2012 Study 1. Focus on Strategic Issues - only 39% said that the data they generate is "relevant to the business strategy" 2. Measure Right Customer Metrics - only 20% were very satisfied with the business outcomes of their existing analytics programs 3. Integrate Business Metrics - Half of the executives indicated that data integration remains a key challenge to them. http://www.accenture.com/us-en/Pages/insight-analytics-action.aspx
  49. 49. Customer Loyalty Measurement Framework Loyalty Types Objective (Survey Questions) Subjective Measurement Approach Emotional Behavioral RETENTION • Leave / Stay • Service contract renewal ADVOCACY • Number/Percent of new customers • • • • • • ADVOCACY Overall satisfaction Likelihood to recommend Likelihood to buy same product Level of trust Willing to forgive Willing to consider PURCHASING • Usage Metrics – Frequency of use/ visit, Page views • Sales Records - Number of products purchased RETENTION • Likelihood to renew service contract • Likelihood to leave PURCHASING • Likelihood to buy different/ additional products • Likelihood to expand usage 1 Using RAPID Loyalty Approach - Overall satisfaction rated on a scale from 0 (Extremely Dissatisfied) to 10 (Extremely Satisfied). Other questions are rated on a scale from 0 (Not at all likely) to 10 (Extremely likely). * Reverse coded so lower rates of these behaviors indicates higher levels of Retention Loyalty.
  50. 50. 9 Levers of Analytics Success

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