Market Insights Needs To Collaborate Better With Customer Experience

Recently, I had a discussion with my colleague Andrew McInnes about the role market insights (MI) can play for customer experience departments, and why so many customer experience (CX) teams are doing research themselves instead of collaborating with their MI counterparts. In this talk we came up with the term “shadow MI.”

Shadow MI: research commissioned or executed OUTSIDE of the MI department. It applies to all research done by a person or group inside the company without the approval or involvement of market insights.

Shadow MI is not good for the company or MI stakeholders. Key risks in shadow MI include:

  • Fragmented knowledge. Distributed research and insights can undermine the organization’s knowledgebase and understanding of customers, competitors, and markets.
  • Bad business decisions. Improper research techniques (sampling, surveys, fielding, analysis) can lead to the wrong conclusions and the wrong decisions.
  • Subpar solutions. Lack of robust data cross-analysis and comparison can result in blind spots and missing aspects of an optimal solution.
  • Higher costs. Individually negotiated purchases can undermine scale-related discounts.
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Social Listening Isn’t Enough: Start Integrating Social Data

Nearly two years ago, I published our first report on Social Intelligence; it included this headline: “The Time To Start Listening Is Yesterday.” In the report, I pushed for the importance of social listening, but I made a call that there’s more to social media than monitoring conversations for brand mentions. But now, as we near the end of 2011, we’ve found that while most companies do in fact listen, few have Social Intelligence strategies and most don’t yet gain true actionable business insights from the data they collect. So even though listening is still very important for brands, it’s time Customer Intelligence teams start using social data.

That’s why I’m eager to announce our latest research on social media data, “The Road Map To Integrating Social And Customer Data” (client link). This report focuses on the role social media data plays for CI professionals. And as the title hints, the role is “integrated with customer data.”

This research was born out of the idea that too many companies have siloed data practices, keeping marketing and business data on one side of the organization and social media data on another. But as I often say – if you only listen to social media, you only learn about social media. To get the most out of social media data, you must integrate it with other data.

For CI teams, integrating social and business data gives you deeper customer insights, the ability to inform targeted marketing, and a more complete view of marketing measurement. But because integrating social data is easier said than done, we’ve put together a road map on how to do it (hence the “Road Map” part to the report’s title) – here’s a quick peek:

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Wells Fargo's Statement Snafu, Or Why PIDM Isn't Just About Digital

This week, some Wells Fargo customers in South Carolina and Florida got a nasty surprise. Turns out, a "malfunctioning printer" printed multiple customers' account information (including transactions and, in some cases, Social Security numbers) on the pages of other customers' statements. 

The number of customers affected hasn't been made public -- a real misstep in my opinion, and one which renders Wells Fargo's public apology rather hollow sounding. Remember: Transparency is a key factor in gaining consumer trust in the era of personal identity management.

Aside from the bank's public handling of the matter, though, there's another important issue. Too often, when organizations talk to us about security and privacy, they're focused on digital data. But the truth is, there is plenty of analog data that follows individuals around, from in-store transactions and personal trainer visits to, yup, mailed bank statements. It's not enough for firms to spend millions of dollars protecting consumers' digital footprints if they're not also thinking about both inbound and outbound uses of offline data. 

Does your organization have discipline and governance around the way offline data is captured, managed, and disseminated?

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It's Time For Business Leaders To Embrace Customer Intelligence

Forrester believes that we have entered the age of the customer — an age in which customer obsession matters more than any other strategic imperative, requiring firms to focus their strategy, energy, and budget on processes that enhance knowledge of, and engagement with, customers.

It sounds straightforward, right? Which of us doesn’t wish to become more customer-centric? Yet we see few executive teams that treat customer understanding and intelligence as a strategic imperative. Don’t believe me? Look at the agenda or the minutes from your last several executive team meetings or board meetings. How much time was devoted to understanding customers better or to leveraging that customer knowledge in new ways to drive business success?

Our research shows that fewer than fifteen percent of firms operate at a strategic level of Customer Intelligence. These are the firms that have turned customer knowledge into a corporate asset. The vast majority of them drive improvements in customer acquisition, retention, satisfaction, revenue, profitability, and customer value. And they apply CI broadly within the business. Ninety-five percent of strategic intelligence firms use CI to drive corporate strategy, versus 30% of those we categorize as functionally intelligent. And 87% of strategic intelligence firms use CI to drive business operations, versus 19% of those at the functional intelligence level.

But before you switch off and tell me this is someone else’s job, be aware of the role of executive management. Strategically intelligent firms are far more likely to have a senior-level sponsor or champion: 46% of them strongly agree that their company has a C-level evangelist or champion for Customer Intelligence, versus 20% of marketing intelligence firms and 7% of functional intelligence firms.

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Silk's Other CI Concern

David Streitfeld at The New York Times' Bits blog comments on Representative Edward Markey's (D-MA) letter to Amazon. Streitfeld says:

But if you use the tablet to post reviews of Italian restaurants on Yelp, Amazon would merely collect that data, bundle it with the fact that a lot of customers in your community seemed to be favorably reviewing Italian restaurants, and then strike a deal with one restaurant to offer discounts, which it would e-mail to you. Some customers might feel tracked; others might not even notice.

David's example is certainly worthy of consideration. Building a database of targeted offers and triggered campaigns from aggregated browse behavior is one way for Amazon to extract value from Silk. It's clearly a striking example for privacy advocates, but it's not the whole story.

Aside from the Customer Intelligence advantages, Amazon's Silk browser also provides the retailer with competitive intelligence (the other CI?). Amazon can watch for products or product combinations purchased on competitor websites, then optimize its merchandise to match or beat those competitors. Besting other retailers doesn't require it to track individual Kindle Fire users or target them through seemingly creepy direct marketing. Instead it can continue to do what it does best -- optimizing its supply chain and catalog -- without appearing to overstep customers' privacy expectations.

The competitive issues raised by Silk are as critical as the individual privacy concerns. 

Are you a retailer who competes with Amazon? What should CI professionals do to combat Amazon's move?

An Updated Look At The Web Analytics Market

I’m pleased to announce that we’ve published "The Forrester Wave™: Web Analytics, Q4 2011." The Wave methodology is Forrester’s time-tested, exhaustive, and transparent approach to vendor evaluations. This research is based on data gathered through extensive vendor briefings, product demonstrations, customer reference calls, and online user surveys. We evaluated seven leading vendors against 80 criteria and gathered reference feedback from more than 160 user companies.

This Wave focused on established vendors that offer web analytics products targeted at enterprise clients. We evaluated the following companies: Adobe, AT Internet, comScore, Google, IBM, Webtrends, and Yahoo. Forrester clients can read the full report and access the underlying scorecard details for each vendor. And don’t forget that the Forrester Wave scorecard also includes an interactive tool allowing users to customize the Wave model with personalized criteria weightings. 

I’ve been asked several times why this Wave focuses on web analytics as opposed to a broader digital analytics or online marketing suite approach. I’m not ruling those options out for the future, but today the answer is simple: because web analytics is still challenging. My research agenda is heavily influenced by the questions and projects we address for our customers. As of this writing, more than half of my client inquiries are still about the technology, processes, staffing, and best practices of web analytics. That tells me that web analytics is a topic that still deserves our attention.

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Kick Out The Tills, CI Professionals

Mike Brown, CIO of Lowe’s, in an interview with Bloomberg on the purchase of 42,000 iPhones as point of sale (POS) devices:

Forget about the competition, we are playing catch-up with the customer psyche.

CI professionals need to follow Brown’s lead. A substitution of tablets and smartphones for cash registers promises both to improve customer experience and to transform face-to-face customer interactions into a stream of behavioral and contextual data. The benefits of digitizing human channels through consumer devices include:

  • Adding clickstream analysis to human interactions. As sales associates interact with customers, their devices can relay clickstream data back to the company’s data warehouse. For example, Pfizer’s tablet program allows it to track doctors’ content consumption patterns during sales presentations. Using interaction management, firms can test real-time content variations to optimize the sales process.
  • Expanding customer data integration options. By using the phones for mobile POS, employees will pull in customer identity. Firms can also add new methods for data capture – such as Bump-style, near-field communications – into its consumer and enterprise apps. As sales associates transfer a shopping list to the customer’s phone, the device can capture and associate customer identifiers and contextual information with the interaction.
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Are You Ready For A World Of Consumer-Managed Data?

It has been a few years since Forrester delved deeply into the issues surrounding consumer privacy, and in that time, an awful lot has changed:

  • Facebook Connect, Google ID, Yahoo Identity, and Sign In With Twitter have emerged as a whole new way of being recognized across a myriad of websites across the Net. As little as a decade ago, most adults online couldn’t have imagined the convenience of single sign-on.
  • At the same time, data capture methods have not only proliferated, they’ve become exceptionally sophisticated. Tactics like Flash-based cookies and deep packet sniffing surreptitiously collect behavioral data about online consumers, while loyalty and membership cards provide more insight into consumers’ purchasing habits at the line item level than ever before.
  • All that extra data is hard to protect without big changes to governance policies and technology stacks, and when data breaches happen, they're public and ugly.
  • Finally, legislators have forged ahead with regulations to protect consumer data. Europe's answer is the Data Protection Directive – a regulatory framework that governs the capture, management and use of consumer data, while in the US, congressional leaders, egged on by consumer advocacy groups, are introducing bills designed to limit data capture and to provide remediation in cases of data and security breach.
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