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Digital Intelligence
Combining Analytics And Experience For
Digital Differentiation
James McCormick, Principal Analyst
AT Internet 2016
1© 2016 Forrester Research, Inc. Reproduction Prohibited
Image Source: Jeremy Segrott https://www.flickr.com/photos/126337928@N05/24545512250
The age of the customer is upon us …
… brought on by the winds of digital change
© 2013 Forrester Research, Inc. Reproduction Prohibited 2© 2015 Forrester Research, Inc. Reproduction Prohibited 2
Drive systems of
engagement with
systems of insight
Source: The “Digital Insights Are The New Currency Of Business [119109]” Forrester report.
© 2016 Forrester Research, Inc. Reproduction Prohibited 3
Digital engagement evolution
Source: The “Optimize Customer Experiences With Digital Intelligence [61276]” Forrester report.
2000 to 2006 2011 to present1993 to 1999 2007 to 2010
Web server logs Web behavior Digital behavior Digital intelligence
THE GOLDEN AGE OF WEB ENGAGEMENT
Traditional systems of insight can’t keep
up with digital customer engagement
© 2016 Forrester Research, Inc. Reproduction Prohibited 5
Finding digital intelligence
© 2016 Forrester Research, Inc. Reproduction Prohibited 6
Building your digital intelligence practice
Ownership Structure:
Hire and organize analytics staff to
support the digital business model
across the enterprise
Technical Approach:
Bring together multiple technical
components for data management,
analysis, and actionability
Metrics & KPIs:
Collect a swath of measurements
including those that help understand
customers and gauge business
success of touchpoints
Optimization:
Apply a continuous optimization
approach across the lifecycle that can
scale using automation and advanced
analytics
Strategic Approach:
Align the digital intelligence
strategic components to support
customer obsession
Source: The “Elevate Customer Obsession With A Digital Intelligence Strategic Plan [116872]” Forrester report.
© 2016 Forrester Research, Inc. Reproduction Prohibited 7
Source: The “Organize For Digital Intelligence With These Three Models [114901]” Forrester report
Digital intelligence organization
Dedicated analytics for each LOB
Centralized channel analytics
teams serve all LOBs
Center of excellence
Coordinated
Decentralized
© 2016 Forrester Research, Inc. Reproduction Prohibited 8
Data
Tag
management
Data
warehousing
Optimization
Recommendations
Online
testing
Behavioral
targeting
Analytics
Web
analytics
Voice of
the customer
Spatial analytics
Social
analytics
Predictive
analytics
IoT
analytics
Interaction
analytics
Cross-channel
attribution
Application
analytics
Digital touchpoints
Customer context and behavior
Source: The “TechRadar™: Digital Intelligence, Q2 2016 [76021] Forrester report”
The complete digital intelligence
architecture
Digital
performance
management
No single
platform
does it all!
© 2016 Forrester Research, Inc. Reproduction Prohibited 9
Digital intelligence delivers proven value
Source: The “TechRadar™: Digital Intelligence, Q2 2016 [76021]” Forrester report.
TechRadar™: DIGITAL INTELLIGENCE, Q2 2016
› Must haves:
• Data warehousing, tag
management, web
analytics, app analytics,
performance monitoring
& optimization tools
› Web analytics is still a
core digital intelligence
technology
› App analytics is complex
and use is growing
› IoT and spatial analytics
technologies are still
maturing
10© 2016 Forrester Research, Inc. Reproduction Prohibited
Experience
Expectation
Perceived Value
Voice of the
customer metrics
Digital performance
metrics
Contextual metrics
Channel metrics
Life-cycle metrics
Conversion metrics
Social metrics
Attribution metrics
Competitive metrics
Optimization
metrics
A complete set of metrics for understanding
digital interactions
© 2016 Forrester Research, Inc. Reproduction Prohibited 11
Evolves & optimizes customer experience
Leverages every
customer interaction
Evolves customer
understanding
Evolves
interaction
treatment
Customer
interaction
Customer
understanding
Customer
treatment
Intelligent and continuous optimization
© 2016 Forrester Research, Inc. Reproduction Prohibited 12
Multivariate
testing
The ideal state of continuous optimization
COMMON DIGITAL MARKETING OPTIMIZATION TECHNIQUES
A/B testing
Traditional
segmentation
Rules-based targeting
Algorithmic targeting
Recommendations
Paid search
Programmatic buying
Segment discovery
Manual Automatic
AdvancedanalyticsBusinessrules
Manual and rules-
driven approaches are
still very important
To scale, you must
consider automated
processes driven by
advanced analytics
13© 2016 Forrester Research, Inc. Reproduction Prohibited 13
Shop Direct assessment:
continuous optimization
Assessment
CO IS A STRATEGIC INITIATIVE
Value gained
• Optimization tech ROI is
up to 20%
• Key acquisition conversion
metrics are 6% desktop,
3% mobile
• Validated that cross-
channel engagements
increased conversion
What they do:
• Optimization is a key
corporate strategy
• 60+ tests/ month:
MVT, A/B/n
• Recommendation
engines
• Fail fast and learn
• Most visits have
optimization applied
Source: The “Transform Customer Experience With Continuous Optimization [116870]” Forrester report
Use of optimization techniques
Proportion of channels optimized
Optimization coverage across
customer lifecycle
Proportion of engagements
optimized
Good
© 2016 Forrester Research, Inc. Reproduction Prohibited 14
Stitch Fix has embedded insights into the
fabric of its business
Source: “The Insights-Driven Business [135823]” Forrester report
© 2016 Forrester Research, Inc. Reproduction Prohibited 15
Attract student borrowers
Fine degree of pricing discrimination
• Avoid the good looking “baddies”
• Price for bad looking “goodies”
Engage only during moments of need
Use customer data and credit scores
Stay connected
Continuously collect all sorts of data
• Historical data around decisions
(approvals and rejections)
• Keep data on those who refused loans
• Collect & connect 100K data
points/person (income, 6 months financial
transactions etc..)
Strategy
Customer data
Continues optimization algorithm
• Creates high fidelity decision spectrum
between good and bad borrowers
• Refines and adjusts decision-making
• Make fine grain decisions
• Provides nuanced decisions over time
Insights driven What else do they do differently?
Execs are insights-driven to the core
• Learn from other insights-driven business
• CDO came from Netflix
Run business like SW company
• CTO run software engineering
Embed data scientist into the product teams
Insights-driven financial services
© 2016 Forrester Research, Inc. Reproduction Prohibited 16
Source: The “Predictions 2017: Artificial Intelligence Will Drive The Insights Revolution” Forrester report (coming soon)
Data and analytics: 2017 and beyond
› Contextual data will truly contribute to mainstream customer
understanding
• Mobile measurement will be backed into omnichannel views
• Two in three firms will use customer location data in 2017
› Customer insights will become an enterprise priority
• In 2017 a (small) majority of firms will have a CDO
• A majority of firms will invest in big data integration initiatives
› Artificial intelligence (AI) and big data will become common CI practice
• Only 10% invested in AI in 2016. Over half will invest in 2017
• Application vendors will bake AI, big data, and IoT into their insights solutions
forrester.com
Thank you
James McCormick
+44 (0) 20 7323 7660
jmccormick@forrester.com

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Combining Analytics and Experience For Digital Differentiation

  • 1. Digital Intelligence Combining Analytics And Experience For Digital Differentiation James McCormick, Principal Analyst AT Internet 2016
  • 2. 1© 2016 Forrester Research, Inc. Reproduction Prohibited Image Source: Jeremy Segrott https://www.flickr.com/photos/126337928@N05/24545512250 The age of the customer is upon us … … brought on by the winds of digital change
  • 3. © 2013 Forrester Research, Inc. Reproduction Prohibited 2© 2015 Forrester Research, Inc. Reproduction Prohibited 2 Drive systems of engagement with systems of insight Source: The “Digital Insights Are The New Currency Of Business [119109]” Forrester report.
  • 4. © 2016 Forrester Research, Inc. Reproduction Prohibited 3 Digital engagement evolution Source: The “Optimize Customer Experiences With Digital Intelligence [61276]” Forrester report. 2000 to 2006 2011 to present1993 to 1999 2007 to 2010 Web server logs Web behavior Digital behavior Digital intelligence THE GOLDEN AGE OF WEB ENGAGEMENT
  • 5. Traditional systems of insight can’t keep up with digital customer engagement
  • 6. © 2016 Forrester Research, Inc. Reproduction Prohibited 5 Finding digital intelligence
  • 7. © 2016 Forrester Research, Inc. Reproduction Prohibited 6 Building your digital intelligence practice Ownership Structure: Hire and organize analytics staff to support the digital business model across the enterprise Technical Approach: Bring together multiple technical components for data management, analysis, and actionability Metrics & KPIs: Collect a swath of measurements including those that help understand customers and gauge business success of touchpoints Optimization: Apply a continuous optimization approach across the lifecycle that can scale using automation and advanced analytics Strategic Approach: Align the digital intelligence strategic components to support customer obsession Source: The “Elevate Customer Obsession With A Digital Intelligence Strategic Plan [116872]” Forrester report.
  • 8. © 2016 Forrester Research, Inc. Reproduction Prohibited 7 Source: The “Organize For Digital Intelligence With These Three Models [114901]” Forrester report Digital intelligence organization Dedicated analytics for each LOB Centralized channel analytics teams serve all LOBs Center of excellence Coordinated Decentralized
  • 9. © 2016 Forrester Research, Inc. Reproduction Prohibited 8 Data Tag management Data warehousing Optimization Recommendations Online testing Behavioral targeting Analytics Web analytics Voice of the customer Spatial analytics Social analytics Predictive analytics IoT analytics Interaction analytics Cross-channel attribution Application analytics Digital touchpoints Customer context and behavior Source: The “TechRadar™: Digital Intelligence, Q2 2016 [76021] Forrester report” The complete digital intelligence architecture Digital performance management No single platform does it all!
  • 10. © 2016 Forrester Research, Inc. Reproduction Prohibited 9 Digital intelligence delivers proven value Source: The “TechRadar™: Digital Intelligence, Q2 2016 [76021]” Forrester report. TechRadar™: DIGITAL INTELLIGENCE, Q2 2016 › Must haves: • Data warehousing, tag management, web analytics, app analytics, performance monitoring & optimization tools › Web analytics is still a core digital intelligence technology › App analytics is complex and use is growing › IoT and spatial analytics technologies are still maturing
  • 11. 10© 2016 Forrester Research, Inc. Reproduction Prohibited Experience Expectation Perceived Value Voice of the customer metrics Digital performance metrics Contextual metrics Channel metrics Life-cycle metrics Conversion metrics Social metrics Attribution metrics Competitive metrics Optimization metrics A complete set of metrics for understanding digital interactions
  • 12. © 2016 Forrester Research, Inc. Reproduction Prohibited 11 Evolves & optimizes customer experience Leverages every customer interaction Evolves customer understanding Evolves interaction treatment Customer interaction Customer understanding Customer treatment Intelligent and continuous optimization
  • 13. © 2016 Forrester Research, Inc. Reproduction Prohibited 12 Multivariate testing The ideal state of continuous optimization COMMON DIGITAL MARKETING OPTIMIZATION TECHNIQUES A/B testing Traditional segmentation Rules-based targeting Algorithmic targeting Recommendations Paid search Programmatic buying Segment discovery Manual Automatic AdvancedanalyticsBusinessrules Manual and rules- driven approaches are still very important To scale, you must consider automated processes driven by advanced analytics
  • 14. 13© 2016 Forrester Research, Inc. Reproduction Prohibited 13 Shop Direct assessment: continuous optimization Assessment CO IS A STRATEGIC INITIATIVE Value gained • Optimization tech ROI is up to 20% • Key acquisition conversion metrics are 6% desktop, 3% mobile • Validated that cross- channel engagements increased conversion What they do: • Optimization is a key corporate strategy • 60+ tests/ month: MVT, A/B/n • Recommendation engines • Fail fast and learn • Most visits have optimization applied Source: The “Transform Customer Experience With Continuous Optimization [116870]” Forrester report Use of optimization techniques Proportion of channels optimized Optimization coverage across customer lifecycle Proportion of engagements optimized Good
  • 15. © 2016 Forrester Research, Inc. Reproduction Prohibited 14 Stitch Fix has embedded insights into the fabric of its business Source: “The Insights-Driven Business [135823]” Forrester report
  • 16. © 2016 Forrester Research, Inc. Reproduction Prohibited 15 Attract student borrowers Fine degree of pricing discrimination • Avoid the good looking “baddies” • Price for bad looking “goodies” Engage only during moments of need Use customer data and credit scores Stay connected Continuously collect all sorts of data • Historical data around decisions (approvals and rejections) • Keep data on those who refused loans • Collect & connect 100K data points/person (income, 6 months financial transactions etc..) Strategy Customer data Continues optimization algorithm • Creates high fidelity decision spectrum between good and bad borrowers • Refines and adjusts decision-making • Make fine grain decisions • Provides nuanced decisions over time Insights driven What else do they do differently? Execs are insights-driven to the core • Learn from other insights-driven business • CDO came from Netflix Run business like SW company • CTO run software engineering Embed data scientist into the product teams Insights-driven financial services
  • 17. © 2016 Forrester Research, Inc. Reproduction Prohibited 16 Source: The “Predictions 2017: Artificial Intelligence Will Drive The Insights Revolution” Forrester report (coming soon) Data and analytics: 2017 and beyond › Contextual data will truly contribute to mainstream customer understanding • Mobile measurement will be backed into omnichannel views • Two in three firms will use customer location data in 2017 › Customer insights will become an enterprise priority • In 2017 a (small) majority of firms will have a CDO • A majority of firms will invest in big data integration initiatives › Artificial intelligence (AI) and big data will become common CI practice • Only 10% invested in AI in 2016. Over half will invest in 2017 • Application vendors will bake AI, big data, and IoT into their insights solutions
  • 18. forrester.com Thank you James McCormick +44 (0) 20 7323 7660 jmccormick@forrester.com