© people & data | www.weigend.com Andreas S. Weigend, Ph.D. 韦思岸教授

SPECIESNoordwijk, 03 February 2009

The Customer Data RevolutionAndreas S. Weigend, PhD

Stanford University

This is superseded by Canalys

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0 SPECIESS

SPECIESS: What do we do? Service Partner Ecosystem Conference to Increase End-customer Sales and Satisfaction

What would Amazon.com do? What do I do?

Teach, Consult, Speak People and Data Marketing 2.0: People have changed! Impact of changing economics of communication: Individuals, society, and business Attitude to information access has dramatically changed. Contribution Business: You enable future of work: Single person, fraction of a person

WWAD

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0 How can you get business insights?

Myth: At the beginning, there is data. And then you create actionable insights

Analysis is good to help us create hypothesis

WWAD?Measurement and data-centric culture? Yeah. But more importantly:Experiment centric culture

Instead: Ideas (“Hypothesis”) Actions Experiment DataReverse the direction?Data Ideas … Ideas DataIterate (“f-word”)Institutional learning, not random experiments

WWAD

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0 You want to be PHAME-ous!

Phishing

•PHAME Problem Hypotheses Action Metrics Experiments

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0 You want to be customer centric

Yeah, yawn, but what does that really mean?

To support customers in their decision making Where is your organization?

Mini case: Vodafone Incredulous [Video] Metrics gone wrong

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0 Customer centricity: Help people make decisions

Cost saving phone trees “Government award”

WWAD? Play with reversing the direction of information flowOLD: What can the ISP do for the user?NEW: What can the customer do for the ISP?

Customers do want to communicate with the company!!Not just be communicated at!What are their expectations?It should be as easy as hitting up their friends, and they should listen!

WWAD

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0 Conversations

Conversation / CommunicationBetween whom?

Company

Individuals

down

cast

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0 Leverage the social graph

Example: New communications service US phone company with deep experience with targeted marketing Sophisticated segmentation models based on experience, intuition, and

datae.g., demographic, geographic, loyalty data

• Hill, S., F. Provost., and C. Volinsky.Network-based Marketing: Identifying likely adopters via consumer networks.

Statistical Science 21 (2) 256–276, 2006• .

Response increases by a factor of 4.82 by marketing to nearest neighbors (NN)

From 0.28% based on segmentation, to 1.35% based on social graph

1

4.82

2.96

0.4

Non-NN 1-21 NN 1-21 NN 22 NN nottargeted

(0.28%)

(1.35%)

(0.83%)

(0.11%)

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0 Recommendations 2.0

•People Friends

Specific people you knowViral marketing

PeersFans (G-star)

ExpertsFashion bloggers

•Data Clicks

Purchases

Forward, tell a friendRelationship

AnnotateAttention

SearchIntention

LocationSituation

Product data

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0 A data revolution, not a software revolution

Mapping companies did not realize that users can add value…Example: NAVTEQ acquired by Nokia for USD 8.6B in Oct 2007 spent USD 300M to reach breakeven 1000 employees driving with GPS… … vs 100M GPS-enabled Nokia phones alone sold in 2008

…vs Amazon.com realizing early on that users can add valueE.g., by reviewing books

… vs Google enabling external developers to build services using company’s data

Q: When will airlines, banks etc follow?

WWAD

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0 We-Business

Myth: Company is in charge1. Owns customer 2. Owns product3. Owns brand

WWAD? Customer supported customer support getsatisfaction.com: “Customer service is the new marketing”

Platform where everybody can contributeSmart relevance functions use user data and decide what bubbles upIf some reseller is really good, they will soon be on top because people constantly give implicit (clicks) and explicit feedbackAll: Reputation systems, incentive to not give positive feedback after positive experiences with suppliersOpening upLayers

WWAD

We-Business

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0 Customer Network Value

MYTH: Unique users matterFrom newspaper copies soldFocus on engagement (from pages / browsers / people)

WWAD? What actually matters iswhat they do (1st order), andwhat they tell others (2nd order)

Strong and weak virality

Communication and connectivityIncentivesExample: Amazon Share the Love

Phone company case / Recommendations

WWAD

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0 Marketing 2.0

OLD: The 4 Ps of marketingProductPlacementPricingPromotion

NEW: Ecosystem Marketing Design interactions with and between your customers empowering

them to create valueFor themselvesFor other customers, and thus:For your firm

Other termsFeedback MarketingConversational Marketing

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0 Where is the conversation?

Call 800-4-SCHWAB Where are the conversations

With other customers With customer service With “the brand”

WWAD? Design the ecosystem such that the whole is more than the sum of its parts

WWAD

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0 Reputation. Relevance. Respect.

Reputation is based on sequence of interactions Reputation is a shortcut in decision making

Relevance Reputation Respect

Instrument the world: Design system for interactions

Create an ever growing pool of data which creates value for

you and your customers

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0 My camera and microphone

Adobe Flash installed on approx 1 billion connected computers and mobile devices

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0 What really has changed?

Attitude of consumers / customers to information they are creating and sharing

Both about themselves…Hopes, dreams, and fears Knowingly and unknowingly

and their relationshipsTagging someone in a picture

Need for Data StrategyExample: DopplrAmazon Wishlist

But just data isn’t all: Focus on experimentsAlgorithms have reached ceilingData now key differentiator

• (incl company learning, richer data to power recs for others)

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0 Summary (1 of 2): Me-Business

User focus (“E Me”)User is at the center of Web 2.0(not the company)CMR (Customer Managed Relationships) or VRM (Vendor Relationship Management) (not CRM, Customer Relationship Management)

System engineered for feedback (“Instrument the world”)System engineered to improve over time by leveraging user data (not deteriorating over time)

Network effects (“Viral marketing”)Demand-side economies of scale (not only supply-side economies of scale)

Data strategy (“Users create value”)Google Maps: Make it easy for outsider to use and enrich the data (not increase security)

Why? Spreading memes and genesBelonging, immortality, self-interest (e.g., file sharing sites)

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0 Summary (2 of 2): The Customer Data Revolution

1. Sniffing the digital exhaustMainly implicit data, some explicit dataWhat is new? More data sources, esp. location data

• 100GB per person on the planet

2. Individuals talk about themselvesMainly explicit contributions

3. Individuals reveal relationships with othersDirected, asymmetrical, multidimensional (not binary!)

The Customer Data Revolution: Shifting expectationsAttitude of individuals to their informationEconomics of data

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0 Discussion

What are the implications for you?Do experiments: Measure interactions in an instrumented world Example: MrTweetLong-term focus: relationship focus

Trans-action

Inter-action

s

Relation-ships

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0 Thanks

Thanks to: Kimmo Alkio Antti Reijonen Mari Huhtiniemi … and all of my friends in the F-Secure Family!

Plus: Ted Shelton (The Conversation Group) Mingyeow Ng (just follow MrTweet on twitter!)

More information:

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