Predict To Prosper In Digital ExperienceRowan Curran, Researcher
June 16, 2015
© 2015 Forrester Research, Inc. Reproduction Prohibited 3
Image source: Associated Press (AP.org), photo by Michael Sohn
The mobile mind shift
The expectation that I can get what I want in my immediate context and moments of need
We need to deliver personalized experiences to this customer
UK teleco combined customer records, geospatial analysis, and train scheduling to
identify high-value customers.
© 2015 Forrester Research, Inc. Reproduction Prohibited 7
Google Now takes contextual details to deliver in-the-moment content
© 2015 Forrester Research, Inc. Reproduction Prohibited 8
Many sites, many devices, many apps
Base: 135 digital experience delivery decision-makersSource: 2015 Digital Experience Delivery Online Survey
© 2015 Forrester Research, Inc. Reproduction Prohibited 9
The need for content in context drives the biggest tech investments
Base: 135 digital experience delivery decision-makersSource: 2015 Digital Experience Delivery Online Survey
© 2015 Forrester Research, Inc. Reproduction Prohibited 10
Big business technology budgets are here!
2009 2010 2011 2012 2013 2014 2015 2016 2017$70
$90
$110
$130
$150
$170
$190
Business technology Information technology
Mil
lio
ns
Source: October 14, 2014, “Sizing The US CIO’s Business Technology Agenda” Forrester report
© 2015 Forrester Research, Inc. Reproduction Prohibited 11
Digital experiences feed mobile mindshifts
Software to manage, deliver, and optimize experiences consistently
across every digital touchpoint.
© 2015 Forrester Research, Inc. Reproduction Prohibited 12
In the age of the customer, we gather massive amounts of data
• Behavioral data
• Social data
• Mobile data
• Environmental data
• Sensor data
• Transaction data
• Customer data
• Third-party data
• Financial data
• Sales data
• Product data
© 2015 Forrester Research, Inc. Reproduction Prohibited 13
Feeding all types of analytics
Past Present Future
Learn Decide Anticipate
Predictive Analytics
Real-time Analytics
Descriptive Analytics
© 2015 Forrester Research, Inc. Reproduction Prohibited 14
Predicting The Future For Contextual Experiences
Descriptive analytics stick you in the past.
Predictive reveals tomorrow . . .
. . . to make the right decisions today.
© 2015 Forrester Research, Inc. Reproduction Prohibited 18
y = f(x)
Predicted outcome
Prediction function
Input variables
A function that takes input variables, applies a formula and/or rules to predict an outcome.
Relationships
Finances
Devices
Attributes
History
Predict characteristics, likely behaviors, likes, and needs.
Customer
Behavior
Channel
Weather Location
Time Use in-the-moment context to predict next-best-action.
Customer
© 2015 Forrester Research, Inc. Reproduction Prohibited 21
Ways to create predictive models
›Handcraft business rules or program code to create a predictive model based on human experts.
›Use predictive analytics tools to build models that analyze data with statistical and machine learning algorithms to create a predictive model.
© 2015 Forrester Research, Inc. Reproduction Prohibited 22
Types of predictive models› Classifiers
• Predict a specific event, characteristic, or behavior
› Recommenders
• Make a recommendation
› Clusters
• Find groups that share common characteristics
› Numerical, time series forecasting
• Predict a numerical value
Predictive models can have a delightful, multiplicative effect on the bottom line
Direct Marketing – 1% response rate
Send marketing mail to 1,000,000 customers at cost of $2 per mailing to sell a $220 service.
$2 x 1,000,000 $2,000,000
1% response rate means 10,000 customer will buy service
$220 x 10,000 $2,200,000
Profit* $200,000
Predictive Direct Marketing – 3% response rate
Send marketing mail to 250,000 customers predicted most likely to buy at cost of $2 per mailing to sell a $220 service
$2 x 250,000 $500,000
3% response rate means 7,500 customer will buy service
$220 x 7,500 $1,650,000
Profit when using a predictive model* $1,150,000
Traditional
Predictive
* Profit calculation does not include other expenses
© 2015 Forrester Research, Inc. Reproduction Prohibited 24
“We are drowning in data and starving for insight.”
— Global Bank
© 2015 Forrester Research, Inc. Reproduction Prohibited 25
A flood of data, a trickle of insights
Insights for lines of business:
Source: October 16, 2014, “The Customer-Activated Enterprise” Forrester report
© 2015 Forrester Research, Inc. Reproduction Prohibited 26
Customers deserve a great experience across their entire journey
These get attention
These deserve more attention
Systems ofautomationconnect the
physical wo
Systems ofengagementtouch peo
Systems of insightpower digital
busineSystems ofrecord hostprocess
Source: “Digital Insight Is The New Currency Of Business” Forrester report
© 2015 Forrester Research, Inc. Reproduction Prohibited 28
Open the spigot with DX platforms
Extensions+Custom
code
Commerce Service
Customer data Content
Otherservices
Marketing
Analytics+
Insights
Contextualdelivery at “theglass”
Touch points
29© 2015 Forrester Research, Inc. Reproduction Prohibited
The battle for the future of your customers
of technology decision-makers have implemented predictive analytics.
Greater than 45%
40%of technology decision-makers plan or are interested to implement predictive analytics.
Base: 984 Technology Decision-MakersSource: Forrester’s Business Technographics Global Data And Analytics Survey, 2015
© 2015 Forrester Research, Inc. Reproduction Prohibited 30
Analytics Must Drive Actions
© 2015 Forrester Research, Inc. Reproduction Prohibited 31
Neither data nor insights are enough to drive great
customer experiences.
© 2015 Forrester Research, Inc. Reproduction Prohibited 32
Without delivery, insights are wasted
Software to manage, deliver, and optimize experiences consistently
across every digital touchpoint.
© 2015 Forrester Research, Inc. Reproduction Prohibited 33
Learnings
Digital insights
Link data and action through digital insights and continuous learning
All possible data
All possibleactions
Rightdata
Effectiveactions
Source: April 27, 2015, “Digital Insight Is The New Currency Of Business” Forrester report
© 2015 Forrester Research, Inc. Reproduction Prohibited 34
Three uses of predictive insights for better DX decisions › Augment human expertise and intelligence
• Enhance human decision-making with dashboarding
• Provide context around the prediction to help the user leverage their knowledge and expertise
› Automated experiences and actions
• Deliver contextual, experientially-relevant content using rules driven by predictions
• Shape customer journeys by directing to next-best-actions
› Discovery of new products and services
• Explore data and predict areas where there are business gaps
• Prototype new products and services and predict their potential impact based on current offerings
© 2015 Forrester Research, Inc. Reproduction Prohibited 35Source: August 7, 2014, “Closing The Experience Gaps” Forrester report
Four customer experience gaps loom
Performance Gap
Convenience Gap
Personalization Gap
Trust Gap
What businesses
deliver
What customers
expect
© 2015 Forrester Research, Inc. Reproduction Prohibited 36
Bridge the valley with predictive analytics
Performance: Internet scale, real-time, any device,
instrumented for data-driven improvement
Convenience: Simple, compelling, complete, unified delivery across
channels, can act immediately, anywhere
Personalization: Context-rich, next best action, location-aware, socially
connected, customer-journey-mindful
Trust: Honest, accountable, transparent,
contextual, reliable, privacy-respecting
What businesses
deliver
What customers
expect
Source: August 7, 2014, “Closing The Experience Gaps” Forrester report
© 2015 Forrester Research, Inc. Reproduction Prohibited 37
Predictive platforms
WCM
Testing
Recomm-endations
SearchCampaign
Mgmt
Commerce
Custom
It’s an ecosystem of solutions
© 2015 Forrester Research, Inc. Reproduction Prohibited 38
Predictive platforms
WCM
Testing
Recomm-endations
SearchCampaign
Mgmt
Commerce
Custom
It’s an ecosystem of solutions
© 2015 Forrester Research, Inc. Reproduction Prohibited 39
It’s an ecosystem of solutions
Predictive platforms
WCM
Testing
Recomm-endations
SearchCampaign
Mgmt
Commerce
Custom
© 2015 Forrester Research, Inc. Reproduction Prohibited 40
It’s an ecosystem of solutions
Predictive platforms
WCM
Testing
Recomm-endations
SearchCampaign
Mgmt
Commerce
Custom
© 2015 Forrester Research, Inc. Reproduction Prohibited 41
Predictive platforms
WCM
Testing
Recomm-endations
SearchCampaign
Mgmt
Commerce
Custom
It’s an ecosystem of solutions
© 2015 Forrester Research, Inc. Reproduction Prohibited 42
Predictive platforms
WCM
Testing
Recomm-endations
SearchCampaign
Mgmt
Commerce
Custom
It’s an ecosystem of solutions
© 2015 Forrester Research, Inc. Reproduction Prohibited 43
Predictive platforms
WCM
Testing
Recomm-endations
SearchCampaign
Mgmt
Commerce
Custom
It’s an ecosystem of solutions
© 2015 Forrester Research, Inc. Reproduction Prohibited 44
Predictive platforms
WCM
Testing
Recomm-endations
SearchCampaign
Mgmt
Commerce
Custom
It’s an ecosystem of solutions
© 2015 Forrester Research, Inc. Reproduction Prohibited 45
Get going with predictive digital experiences › Start with a single customer touchpoint and ask: what information could
I predict to make their experience better?
› What data is available in the organization to understand our customers and behaviors?
› What technology capabilities do we already have to leverage predictions(e.g. can we create offline models to put into existing rules engines)?
› Create a shared culture: this challenge is everyone’s problem! (marketers, developers, operations)