There’s a big insights gap out there. Not enough insights are turning into actions that matter, despite continued investment in data, people, and technology. For example, in 2016, data and analytics pros reported that firms base only 49% of business decisions on quantitative information and analysis as opposed to opinion. That’s up from 2015, but only by 3 percentage points – out of alignment with the investment in insights capabilities. You feel the pressure, I know. So, it's action time - to drive more value from insights.
For sure, firms today have bright spots of insights value – for example, in digital channels, where A/B and other testing approaches enable continuous optimization of customer interactions that matter most to business outcomes. But disparate bright spots are not enough, and businesses must move from insights-spotty to insights-driven. Research by Forrester colleagues Brian Hopkins, James McCormick, and Ted Schadler paints the picture of what great looks like in insights-driven business. Such firms organize and operate differently to take advantage of data and analytics in every aspect of their products and operations, and that closed-loop approach is embedded everywhere in the organization. That's the end goal. Customer insights teams must up their game now, and a center of excellence (CoE) is a first step.
Happy 2017! Settling in to the New Year often renews hope and excitement for the future, and rekindles anticipation for the brands, products, and experiences on the horizon. This year, it’s hard to think about imminent innovations without considering a modern imperative that is rapidly moving to the forefront of conversation: customer empathy.
We are barely three weeks into 2017 and already the cry for customer empathy – and brands’ responses to it – are popping up frequently. At the Consumer Electronics Show, the “insanely cute” Kuri personal robot stole consumers’ hearts, and took the notion of “tech love” to a whole other level. The progression of Artificial Intelligence is sparking public debate about the role of compassion in human connection. And people find themselves seeking meaning, purpose, and understanding over happiness.
The need for empathy affects how customers evaluate brands too: Consumers increasingly prefer companies that resonate with shoppers’ personal values. Forrester’s Consumer Technographics® social listening data shows that consumer buzz about company values is on the rise:
Over the past few months, following publication of my "Customer Insights Center of Excellence" report , there’s been a significant uptick in questions by insights and analytics teams who want to talk to us about CoEs. That’s a positive sign that firms are feeling the crunch to get more value from their insights functions. What’s the evidence for that conclusion? What can we learn from who’s asking about insights CoEs? And most importantly, what really matters in how you organize?
Before we dig in to answers, let’s set the bar on what “great” looks like in truly customer obsessed organizations: they use data for insights to improve customer experience that matters most to business outcomes. As my colleagues James McCormick, Brian Hopkins, and Ted Schadler write in their recent report, "The Insights-Driven Business," customer obsessed businesses act on insights in closed loops, at speed, and at scale in all parts of the firm. They embed analytics and testing directly into operating teams. And, firms who implement these approaches run faster and fleeter than you. The pressure is on from insights-driven organizations.
This post is co-authored byShar VanBoskirk, VP and principal analyst at Forrester
On Monday, holding company Dentsu Aegis announced that it acquired a majority stake in Merkle, which is known for its CRM, data, and digital marketing capabilities. Logistically, this acquisition allows Merkle to increase its international presence, while beefing up Dentsu’s US coverage and allowing it to diversify outside of Japan. This acquisition is also important because Merkle was one of the last large independent agencies, which leaves slim pickings for marketers hoping to work with an agency not subject to holding-company rule (read: less autonomy, less entrepreneurial).
Dentsu Aegis is not unique in its acquisition of a data/CRM agency. All of the other holding companies have them too (WPP has Wunderman, Publicis has Rosetta [now Razorfish Global], IPG has The Hacker Agency, Omnicom has Rapp and Targetbase). This is because “customer relationship management” has broadened beyond direct mail and email marketing to include loyalty initiatives, ownership experiences, data strategy/modeling and technology integration — critical data and insights solutions for holding companies to provide to their clients.
With reported 2015 revenue at $436 million, Merkle will be Dentsu’s fourth-largest agency, behind Dentsu (the agency), Carat, and Isobar. With this move, we think that Dentsu’s should make CRM and data-driven marketing the centerpiece of its agency strategy — not just an additional services offering.
Is your business digital? Like Domino’s Pizza, do you realize that you are not a product or service business, rather you are a software and data business that provides products or services? Do you exploit all of your customers' data to know them inside-out? Are customers flocking to you because you are driving every engagement with insight about them? If the answer to any of these questions is not a resounding, “Yes!”, then you are losing revenue and shareholder value.
In Forrester’s new report, The Insight Driven Business, my colleagues Ted Schadler, James McCormick and I identify a type of business that ignores the "data driven" hype. Instead, insights-drivenbusinesses focus on implementing insights - that is actionable knowledge in the context of a process or decision - in the software that drives every aspect of their business. This is a big shift from most firms that fret over big data and technology. Instead insights-driven businesses focus on turning insights into action. The big data and technology pieces come along naturally as a consequence.
To gauge the economic impact of insights-driven businesses, Forrester built a revenue model that conservatively forecasts insights-driven businesses will earn about $400 billion in 2016; however, by 2020 they will be making over $1.2 trillion a year due to an astonishing compound annual growth rate between 27% and 40%. Given that global growth is less than 4%, how will they pull this off? Plain and simple, they’ll do this by understanding customers more deeply and using that insight to steal them from their competition.
Today in the US, we are gearing up to celebrate Cinco de Mayo with lively music, ice-cold margaritas, colorful clothing — the works. But while many Americans use the day to revel in the trappings of Mexican culture, they often don’t realize that the holiday is actually met with little pomp and circumstance in Mexico itself.
Cinco de Mayo is one of many traditions that have been adopted — and appropriated — across country borders. But the holiday represents a larger concept that applies to people, too: As individuals relocate around the world, they spark cultural variations and build unique identities in their own right.
For example, Forrester’s Consumer Technographics® survey data shows that Mexican-born individuals who now live in the US develop distinct behaviors and attitudes: Not only do these longer-tenured US residents become more comfortable sharing sensitive data (like financial information) online, they also increasingly execute digital transactions:
It’s interesting to note that even though metropolitan Mexico and the US have similar mobile penetration rates, the device profile, technology attitudes, and digital behaviors that characterize Mexican consumers shift after they settle in the US.
Forrester is kicking off research on what it means to be a sustainable business and why it matters. In short, it matters because customers and investors care. But what do they care about? And, what does sustainability mean to them, and to the companies they do business with?
First stop in exploring the definition of something is, of course, a search for the term. “Sustainable” means that something can go on, and continue and “be maintained at a certain rate or level.” For consumers, that might mean their health, their environment, or the health and environment of others -- but also their budgets. The literature on sustainability often refers to three pillars: social, environmental and economic. But how does this translate into business metrics?
We have all this valuable data about our customers, but we need to make better use of it.
This is the most common theme I hear on inquiry calls, at conferences, and in advisory sessions. At this point, companies are fully aware that their data contains enormous value. In fact, I like to think that data has a potential value much like the concept of potential energy in physics. In physics, the conversion of potential energy to kinetic energy requires force. In business, customer analytics is the Force that unlocks the hidden value in your customer data.
Because customer analytics often relies on advanced machine learning algorithms, it used to be the domain of statisticians who could write code in R or Python. Today, thanks to the 11 customer analytics solution providers in The Forrester Wave™: Customer Analytics Solutions, Q1 2016, customer insights professionals are applying these techniques to their data to address key business objectives. This report, which is only available to Forrester clients, evaluates the customer analytics solutions of Adobe, AgilOne, Angoss, Alteryx, FICO, IBM, Manthan, Pitney Bowes, SAP, SAS, and Teradata.
Many times, what we want says more about us than what we do. This is why readers are fascinated with news from the Consumer Electronics Show, which gives us an aspirational glimpse at the technology of tomorrow. This is why Google publishes the most frequently searched “how-to questions,” which reveal what people are striving for. It’s also why emerging customer insights methodologies like social listening, which uncover visceral consumer reactions and desires, are gaining traction.
Two weeks ago, people around the world expressed their wishes for 2016 by sharing their New Year’s resolutions online. What do people want this year? Forrester’s analysis of the social conversation shows that physical and mental wellbeing dominated most of the resolutions posted across the globe. But certain geographical differences shed light on varied cultures and attitudes. For example, while US consumers also discussed social causes and career goals, UK consumers mentioned artistic pursuits and relaxation:
I'm just back from two weeks in Hong Kong, where I'd been invited to give a keynote at the 10th anniversary conference of the Business Information Industry Association. Since I was there, I took the time to meet with some fantastic Forrester clients in industries ranging from travel to insurance to retail to consulting. In nearly every discussion, whether I was speaking to a BT or a marketing exec, we eventually got to the topic of the "privacy-personalization paradox."
This is an issue I've explored extensively, and have written about before. It's a challenge that marketers in the US dabble with when they're considering investments in tools like retail beacons and cross-device identity resolution. But it was enlightening to hear about the challenges that firms in APAC face: antiquated privacy laws, a dearth of third-party consumer data, and even the incredible difficulty of compiling a single customer view across their own first party data. Interestingly, though, the solution in both markets is similar: preference management.