Win, Serve And Retain Customers With 15 Customer Analytics Methods

Customer analytics takes center stage in the age of the customer for firms trying to understand and predict customer behavior. From descriptive to predictive methods, customer insights (CI) professionals can apply a wide array of analytics methods to behavioral customer data. CI professionals have a lot to consider when deciding on the right portfolio of methods to drive customer understanding – what dependencies exist between analytics methods, what investment levels are required, where to get help and what business value do these methods drive.

To make it easier, we identified 15 key customer analytics methods that help firms win, serve and retain their customers. In our latest report, “TechRadar™: Customer Analytics Methods, Q1 2014” (subscription required), we evaluate each of these methods in detail taking into consideration their current adoption as well future potential. These methods, ranging from behavioral customer segmentation, lifetime value analysis, next-best offer analysis to recommendation analysis, allow firms to analyze customer data and use the analytical insight to drive acquisition, retention, cross-sell/upsell, loyalty, personalization and contextual marketing.

Our analysis shows that:

  • Methods that drive contextual insights are in early stages. Emerging methods such as sentiment analysis, location analysis, and device usage analysis are in early stages of development, but they have the potential to provide valuable context around behavior and other customer analytics methods.
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Announcing the 2013 Customer Analytics & Measurement Survey

Last year, we published The State of Customer Analytics 2012 (subscription required)  based on the results of our annual customer analytics adoption survey where we uncovered key trends of how customer analytics practitioners use and adopt various advanced analytics across the customer lifecycle and highlighted challenges and drivers associated with customer analytics.

This year, I am teaming up with my colleague and attribution guru Tina Moffett to further explore measurement, attribution and customer analytics practices ranging from the type of attribution techniques in vogue to the adoption of advanced analytics methodologies.  With this expanded survey we want to understand how you use and apply measurement and analytics in your organization to optimize both cross-channel marketing campaigns as well as customer programs.

In particular, we’re fielding questions to understand the goals and challenges associated with measurement and analytics, the adoption and application of measurement and advanced analytics methods, the use of several marketing and customer metrics, the customer insights process and workflow as well as the organizational aspects that support measurement and analytics. We encourage you to participate in this survey, as this information will help you benchmark your measurement and analytics adoption efforts.

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Participate In Our TechRadar™ Research On Customer Analysis Methods

Customer insights professionals have many customer analytics methods (sub's reqd) to choose from today to perform behavioral customer analysis, and new techniques emerge as the complexity of customer data increases. Analysis of customer data involves the use of data-mining and statistical methods that span descriptive and predictive analytics. But how do you decide which customer analysis methods are right for you? How do you plan your customer analytics capability with the right mix of methods that address specific questions and uncover customer insights?

Using our Forrester TechRadar™ methodology we are kicking off research that will address many of the questions above as well as explore:

  • The current state of each customer analysis method, its maturity, market momentum, ecosystem interest and investment levels.
  • The potential impact of each method on your ability to understand and predict customer behavior

The customer analytics methods to be included in this report range from behavioral customer segmentation to propensity models, social network analysis, next-best offer analysis, lifetime value analysis, customer churn analysis to name a few.

If you are interested in participating in this research as an end-user/client, expert or customer analytics technology or services vendor reach out to me directly at ssridharan [at] forrester [dot] com.

Thanks in advance for your participation! All research participants will receive a copy of the published report.

Analytics Democratization Continues As KXEN Finds A New Home

SAP today announced plans to acquire KXEN, a provider of predictive analytics technology. The terms of the deal are not known. This is an interesting development for both companies and highlights the focus on the democratization of predictive analytics, especially for marketers. The proposed deal puts the spotlight on two shifts in the analytics landscape:

  • Expert user to casual user. Our research shows that finding top analytics talent is a key inhibitor to greater customer analytics adoption. As a result, users expect analytical tools to cater to nontechnical, nonstatistician business and marketing users.
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What Is Your Customer Analytics Persona?

Buy analytics software, hire marketing scientists, and engage analytics consultants. Now wait for the magic of customer analytics to happen. Right?

Wrong. Building a successful customer analytics capability involves careful orchestration of several capabilities and requires customer insights (CI) professionals to answer some key questions about their current state of customer analytics:

  • What is the level of importance given to customer analytics in your organization?  
  • Have you clearly defined where you will use the output of customer analytics?
  • How is your analytics team structured and supported?
  • How do you manage and process your customer data?
  • Do you have clear line of sight between analytics efforts and business outcomes?
  • What is the process of sharing insights from analytics projects?
  • What type of technology do you need to produce, consume and activate analytics?
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Find Your Insights Silver Lining With The Customer Analytics Playbook

 

The deluge of customer data shows no signs of abating. The perpetually-connected customer leaves data footprints in every interaction with a brand. This presents tremendous opportunities for customer insights professionals and analytics practitioners tasked with analyzing this data, to not only get smarter about customers but ensure that the insights get appropriately used at the point of customer interaction.

When we asked customer analytics users about the challenges and drivers of customer analytics adoption, we found that data integration and data quality continue to inhibit better adoption of customer analytics while users still want to use analytics to improve the data-driven focus of the organization and drive satisfaction and customer retention.

 

Forrester’s Customer Analytics Playbook guides customer insights professionals, marketing scientists and customer analytics practitioners into this new reality of customer data and helps discover analytics opportunities, plan for greater sophistication, take steps towards building a customer analytics capability and continually monitor progress of analytics initiatives. It will include 12 chapters (and an executive overview) that cover different aspects of customer analytics.

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Just Published: The Forrester Wave™: Customer Analytics Solutions, Q4 2012

Customer Intelligence (CI) professionals invest in data-mining, predictive analytics and modeling tools and technologies to make sense of the deluge of data. In the past, they've had to adapt horizontally-focused analytics and modeling solutions to a customer intelligence and marketing context. Today, however, they can consider a gamut of customer analytics and marketing-focused analytics providers that have not only analytics production expertise but also domain and role-focused expertise.

We just published our first evaluation focusing on the customer analytics category here: The Forrester Wave™: Customer Analytics Solutions Q4 2012 . After screening more than 20 providers for analytics products specifically catering to customer analytics applications, we identified and scored products from six of the most significant providers: Angoss Software, FICO, IBM, KXEN, Pitney Bowes, and SAS. Our evaluation approach consisted of a 70-criteria evaluation; reference calls and online surveys of 60 companies; executive briefings; and product demonstrations. The core criteria included key dimensions such as core functionality (data management, modeling, usability); analytics production; analytics consumption; analytics activation and customer analytics applications. The evaluation also included the strength of the current product and corporate strategies  in the customer analytics market as well as the future vision for this category.

We found that four competencies define the current customer analytics market:

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The State Of Customer Analytics 2012

I’m excited to announce that our new research on how firms use customer analytics was just published today.  The new research reveals some interesting findings:

  • Customer analytics serves the customer lifecycle , but measurement is restricted to marketing activities. While customer analytics continues to drive acquisition and retention goals, firms continue to measure success of customer analytics using easy-to-track marketing metrics as opposed to deeper profitability or engagement measures.
  • Finding the right analytics talent remains challenging . It’s not the just the data. It’s not the just technology that hinders analytics success.  It’s the analytical skills required to use the data in creative ways, ask the right questions of the data, and use technology as a key enabler to advance sophistication in analytics.  We’ve talked about how customer intelligence (CI) professionals need a new breed of marketing scientist to elevate the consumption of customer analytics.
  • CI professionals are keen to use predictive analytics in customer-focused applications,  Forty percent of respondents to our Global Customer Analytics Adoption Survey  tell us that they have been using predictive analytics for less than three years, while more than 70% of respondents have been using descriptive analytics and BI-type reporting for more than 10 years. CI professionals have not yet fully leveraged the strengths of predictive analytics customer applications.
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Translate Customer Analytics Into Action

Companies adopt advanced analytics tools and techniques to convert data into intelligence and drive key customer-facing business decisions. We see that customer intelligence (CI) professionals involved in customer analytics broadly perform three activities:

  • Generate analytics: Create and produce analytical insights using analytical tools and technologies.
  • Apply analytics: Choose the appropriate analytical methodology for the business problem and apply it to the context of the customer lifecycle.
  • Activate analytics: Use analytical output and insights to optimize customer experiences and to drive customer growth, share of wallet, retention, and lifetime value.
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Customer Intelligence Teams Need Analytics "Translators"

Any big data or analytics conversation would be remiss without the mention of "data scientists." Much has been written about data scientists– who they are, who they should be, and where to find them. My colleague James Kobielus wrote an interesting series of blog posts about the skills required to become a data scientist.

From a customer intelligence (CI) perspective, we outlined four segments of CI professionals — marketing practitioners, marketing technologists, marketing scientists, and customer strategists. Of these, marketing scientists typically orchestrate the customer and marketing analytics function. They manage the reporting, analysis, and predictive modeling processes using marketing and customer data.

In a CI context, we find that the role of the marketing scientist has evolved from being a pure data analyst drowning in data analysis to that of an analytics translator — someone who is equally comfortable with building advanced predictive models and also adept at embedding the output of the models into customer-facing processes. What type of marketing scientist does your analytics team have?

We recently published a report on why "Customer Intelligence Needs A New Breed Of Marketing Scientist" (accessible to Forrester clients). In the report, we highlight ways to develop analytics translators across the staffing cycle — starting from attracting the right talent, nurturing the relevant skills, training with new skills, and incenting them based on business impact.

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