Digital IntelligenceCombining Analytics And Experience For

Digital Differentiation

James McCormick, Principal Analyst

AT Internet 2016

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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

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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

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Finding digital intelligence

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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.

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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

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Data

Tag

management

Data

warehousing

Optimization

RecommendationsOnline

testing

Behavioral

targeting

Analytics

Web

analytics

Voice of

the customerSpatial 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!

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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

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Experience

Expectation Perceived Value

Voice of the

customer metrics

Digital performance

metricsContextual 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

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Evolves & optimizes customer experience

Leverages every

customer interaction

Evolves customer

understanding

Evolves

interaction

treatment

Customer interaction

Customer understanding

Customer treatment

Intelligent and continuous optimization

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Multivariate

testing

The ideal state of continuous optimizationCOMMON DIGITAL MARKETING OPTIMIZATION TECHNIQUES

A/B testing

Traditional

segmentation

Rules-based targeting

Algorithmic targeting

Recommendations

Paid search

Programmatic buying

Segment discovery

Manual Automatic

Ad

van

ced

an

aly

tics

Bu

sin

ess r

ule

s

Manual and rules-

driven approaches are

still very important

To scale, you must

consider automated

processes driven by

advanced analytics

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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

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Stitch Fix has embedded insights into the fabric of its business

Source: “The Insights-Driven Business [135823]” Forrester report

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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

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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