the age of "now marketing"
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IBM point of view on the future of marketing given consumer and technology trendsTRANSCRIPT
© 2009 IBM Corporation
Reinventing Customer Relationshipin the ‘Age of Now’Suresh Shankar, Global Director, Analytics, IBM Global Process Services
© 2009 IBM Corporation2
The Global CxO Studies are part of our C-suite study series encompassing interviews with over 13,000 C-suite executives
IBM Institute for Business Value
’04-’05 ’08-’09’06-’07 ’10-’11
CSCO
CEO
CFO
CHRO
CMOLate 2011 Release
CIO
© 2009 IBM Corporation
Standout CEOs understand the need to capitalize on complexity in 3 ways
Embrace ambiguity
Take risks that disrupt legacy business models
Leapfrog beyond “tried-and-true” management styles
Honor your customers above all else
Use two-way communications to sync with customers
Profit from the information explosion
Simplify whenever possibleManage systemiccomplexity
Promote a mindset of being fast and flexible
Be “glocal”
Source: IBM CEO Study 20103
1,541 CEO interviews
© 2009 IBM Corporation4
CEO focus over the next 5 years
Source: 2010 CEO Study Q13: “Which of the following dimensions will you focus on more to realize your strategy in the new economic environment over the next 5 years? ” (n=1,523); 2011 CIO Study, Q13: “Where will you focus IT to help your organization’s strategy over the next 3 to 5 years?” (n=3,018)
CIO focus over the next 5 years
IBM Institute for Business Value
CEOs and CIOs are both highly focused on insights, clients and people skills
“Business Intelligence will provide information to the company that no one in the industry has ever seen, and will open up opportunities that were not previously considered.”
Utilities CIO, USA
3000+ CIO interviews
© 2009 IBM Corporation
According to the 2010 CFO Study: Capabilities required to be successful while addressing the Broader Enterprise Focused Role of Finance are…
Source: IBM Institute for Business Value, The Global CFO Study 2010
Finance Efficiency
Business Insight
Demands on Finance
Help drive enterprise cost reduction
Support risk management
Partner in strategy and value creation
Improve access to and reduce cost of
capital
Provide performance insight and anticipate
Finance Capabilities Needed
1,917 CFO interviews
© 2009 IBM Corporation6
What are CMOs saying...
Innovators. This minority of CMOs will be championing a fully integrated approach to marketing that leverages cross-functional relationships and insights to engage customers, create perceived value, and generate a positive response to the brand and its proposition. Recognizing that dynamics such as social media have both a direct and an indirect impact on many of their marketing decisions, these CMOs will aggressively track and evaluate data from digital means to inform their “4P” decisions.
The initial results of the survey suggest CMOs are following two distinct paths:
Source: 2011, Today’s CMO: Innovating or following? IBM Institute for Business Value in cooperation with The Economist Intelligence Unit
AdoptersThese CMOs (a majority) are not yet on the leading edge to leverage new dynamics in marketing strategy. While well aware of new market dynamics in a broad sense, they could struggle with issues of execution. Lacking data, insights or other resources available to Innovators, Adopters may find it more difficult to craft proactively a fully integrated marketing approach. In the process, Adopters could gravitate (or bepushed) toward an increasingly narrow sphere ofinfluence—most likely focusing primarily on only two of the 4Ps: Promotion and Product.
© 2009 IBM Corporation7
We have heard the voice of the CxO…
…now let’s hear the voice of the customer
© 2009 IBM Corporation
The fundamental rules of doing business are changing because of the disruptions
caused by new consumer realities
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© 2009 IBM Corporation
The consumer reality has created an EXPECTATION economy characterized by instantaneity, the ‘AGE Of NOW’
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FREE
AlwaysON
Networked
Share of Time
Loyalty is Dead
Transparency Tyranny
Less is More
© 2009 IBM Corporation
FREE is the future of businessConsumers increasingly expect and want
complimentary” services for giving business to firms
Firms needs to have clarity on their business model by adopting innovative
cross-subsidized business models
ProFree 100 MB monthly photo
upload limit 2 video uploads each
month Limited to 200 most
recent images Only smaller (resized)
images accessible Post images up to 10
group pools
Unlimited photo uploads Unlimited video uploads HD
Video Unlimited storage Unlimited bandwidth Archiving of high-resolution
original images Ad-free browsing and sharing Post images up to 60 group
pools
$24.95$0.00
Giveaway the razor, sell disposable blades
Give away the printer, charge a premium for the ink
Make the video game console cheap, sell expensive games
Shift in Burden
Shift in Level of Service/Access
Freemium: Freemium: Free Vs ProFree Vs Pro
Shift in Time
Ecosystem Ecosystem of Serviceof Service
Free Now Free Now Pay LaterPay Later
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© 2009 IBM Corporation
FREE is the future of businessConsumers increasingly expect and want
complimentary” services for giving business to firms
Banks needs to have clarity on their business model by adopting innovative
cross-subsidized business models
Shift in Burden
Shift in Level of Service/Access
Shift in Time
Advertising, sale of info, eyeballs, fees from new services
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Premium users pay more not less for true transparent differentiationStandard users provide mass base
Beyond just lock-insQuantify continuous value delivered
© 2009 IBM Corporation12
… will make most of its money from innovative
cross-subsidized pricing models that
deliver key services for free
The Marketeers of the future…
© 2009 IBM Corporation
TRANSPARENCY TYRANNYConsumers are more informed than ever before and able to evaluate every aspect of
their purchase decision…
Firms are turning transparency into an advantage – by being transparent about their offers v/s competition, cutting down
evaluation time and saving time.
Today’s consumers have
more infoat their fingertip
Data is available on anything & everything
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Progressive, a key player in the insurance industry, openly compares its rates against
other insurers
mySupermarket, a neutral service provider, provides price comparisons across major
supermarkets
© 2009 IBM Corporation
TRANSPARENCY TYRANNYWhen data is available on anything & everything,
it is futile to keep info hidden
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Transparency will become
the competitive differentiator
that drives trust
…consumers will perceive such businesses to be transparent in other areas as well
SingTel, has become the first Telco in Asia to unveil the average access speeds of its mobile broadband services vs its own claims
CSL Telecom, engages its customers effectively online with the One2free
Facebook page
© 2009 IBM Corporation15
… will try to build an emotional quotient
with the customer for being transparent
with the customer on the competitive value delivered
The Marketeers of the future…
© 2009 IBM Corporation
Loyalty is DeadIncreased choice & abundance of loyalty
programs have made it a discount mechanism; delayed gratification is no longer
valued
Firms need to deliver instant gratification & a series of supreme
customer experiences at every point of customer contact
lives for now, desire variety and are quick to shift loyalties.
However, even the benefits of coalition loyalty has its limits…
Organizations have to devise innovative ways to deliver a supreme customer
experience at EVERY moment of touch
Customer experience @
While coalition loyalty simplifies rewards
• Wider choice
• Holistic view of the customer
• Cheaper
• Easier
Random acts of kindness work even better
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Spreading HappinessFoursquare-based campaign employs a ‘Surprise Team’ to give passengers tailored, unexpected gifts at the airport
Redefining Customer experience @
Customer service @ Zappos has always been a
critical part of the brand
© 2009 IBM Corporation17
… will define loyalty as something they create
– by delivering a series of supremely
differentiated customer
experiences at every moment of truth
The Marketeers of the future…
© 2009 IBM Corporation
NETWORKEDConsumers are embracing social networks
as part of their digital lifestyle, and increasingly, trust networks and not
brands
While firms are starting to use ‘social media’ tactically as yet another vehicle to
reach customers...
…which make a big difference. 70%
That trust extends to product preferences… 92%
They trust other consumers like
themselves.90%
People don’t trust advertising. 86%
Source: GFK,/Roper, 2006
Source: The Nielson Company, 2009
Source: The Nielson Company, 2009
Source: The Nielson Company, 2009
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…there are those who are building businesses around social networks, in the
way they want to be engaged…
770K + Gap Facebook fans
100K tweets make Gap revert the logo
back
Collaborative ConsumptionA web-based swap meet for books, CDs, DVDs and video games
Yet larger % of marketing dollars are still spent on advertising
Social Insurance company leverages on communities to reduce premiums by up to 70% less than competitors
© 2009 IBM Corporation
NETWORKED
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Each day, offers for sale a deep-discount coupon from a business in your town.
The coupons aren’t actually distributed until a critical mass of people (say 50) have clicked “Buy.”
Each day, offers for sale a deep-discount coupon from a business in your town.
The coupons aren’t actually distributed until a critical mass of people (say 50) have clicked “Buy.”
The Gripe app lets consumers post complaints about a business and warns businesses of each complainer's social media influence.
The Gripe app lets consumers post complaints about a business and warns businesses of each complainer's social media influence.
Collaborative consumption…Collaborative
consumption…
Reactive community engagement….
Reactive community engagement….
… proactive models… proactive models
New business models are emerging, focusing on…
© 2009 IBM Corporation20
… will have a marketing strategy
driven almost entirely around a true
community based engagement model
focused on collaborative consumption
The Marketeers of the future…
© 2009 IBM Corporation
ALWAYS ON
I am always ‘ON’
Technology has transformed consumers’ digital lifestyle...they are plugged in 24/7!
Firms need to find a way to become more instant than their customers are, by offering
real-time products, services and experiences.
• 60% of BB owners check email in bed• Spending Time Online: +56%• Using My Mobile: +49%• Sending E-Mails: +41%• Social Networks: +37%• Most people keep their friends informed
of their travels via ‘status’on Facebook
Source: MTV Asia Research on Digital Trends, Neilsen Reports, Newsweek Article**
--- I want it ‘HERE & NOW’ ---INSTANT is the name of the game
Real-time publishing
Real-time search
Real-time reviews
Real-time news
Real-time price
comparisons
Real-time conversations
Allows you to compare prices and make purchase decisions instantly
• SnapTell allows users to take photos of an item or scan a barcode on their phone
• Amazon searches for the product online and enables instant price comparisons and an option to purchase the item securely from their mobile device
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Allows you to make person-to-person transfers instantaneously by simply bumping mobile phones
© 2009 IBM Corporation
ALWAYS ON
Technology has transformed consumers’ digital lifestyle...they are plugged in 24/7!
Firms need to find a way to become more instant than their customers are, by offering
real-time products, services and experiences.
--- I want it ‘HERE & NOW’ ---INSTANT is the name of the game
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Hindsight …. so yesterday!
Insight …. need of the hour!
Foresight …. leads to impacting results!
Perpetual beta…. Being 80% right and
getting it done!
© 2009 IBM Corporation23
… will shift its customer emphasis from
understanding the past to predicting the future
and reacting in the present to deliver real-time products,
services and experiences
The Marketeers of the future…
© 2009 IBM Corporation
SHARE OF TIME
19981998 20052005 TODAYTODAY
Window to the world…
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What is the most valuable piece of real estate in the world?
© 2009 IBM Corporation
Facebook ad Revenue jumps by 1000% and is estimated to be $1.8 Bn, targeted to touch $2 Bn in 2011 and is fast poised to catch up with
SHARE OF TIME
The marketer who owns the customer’s time, owns the
customer and hence his wallet!
Marketers need to shift their focus from share of wallet to share of time
Today consumers have more money but less time; Today’s currency is time
Apple uses the APP Store to get share of time of
customers, and then share of wallet
The 3rd largest populated ‘territory’
Mastered the art of creating an emotional asset through friends,
their photos, status messages, emotional wall posts and
relationship status. 25
Research findings predict that Apple's app-related
revenue in 2011 will be $2.9 billion vs. $1.8 billion last
year.
© 2009 IBM Corporation
SHARE OF TIME
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Shopping begins at home with an online shopping list
In the store, the customer can wirelessly access her list, and each item appears at the exact location within the store
Items are scanned as they are gathered Customers can look up recipes and the
shopping list is updated The assistant highlights promotions based
on the customer’s preferences or location in the store
The Personal Shopping Assistant dramatically increases speed, efficiency and personalization
© 2009 IBM Corporation27
… will value share of time more than share
of wallet… and use every opportunity to
translate share of time to monetized
opportunities and happily engaged
customers
The Marketeers of the future…
© 2009 IBM Corporation
LESS IS MOREConsumers seek simplicity and want firms to remove barriers between them and what
they want
Choice is exploding for all consumers; Paradox of Choice : consumers are moving
from ‘not enough’ to ‘too many’
More choices More is actually less…
… and less is MORE.
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? Postponement of decision
making
escalation of expectations for the perfect products
more dissatisfaction from making the wrong choice
© 2009 IBM Corporation
LESS IS MOREConsumers seek simplicity and want firms to remove barriers between them and what
they want
Choice is exploding for all consumers; Paradox of Choice : consumers are moving
from ‘not enough’ to ‘too many’
More choices
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Postponement of decision making
escalation of expectations for the perfect products
more dissatisfaction from making the wrong choice
From more choices to…less choices that each
make more sense
© 2009 IBM Corporation30
… will spend inordinate amount of
time on making things simple for their
customers and removing the barriers
between them and what they want
The Marketeers of the future…
© 2009 IBM Corporation
As Consumers, it is easy to relate to these trends and react positively…
As Business Managers, how can we stop going back to our old ways of doing things?
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© 2009 IBM Corporation
… will need to leverage the
data it already has in each of these areas!
The Marketeers of the future…
© 2009 IBM Corporation
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Volume Every day, 15 petabytes of new information are being generated. Data volume are expected to double every 2 years.
VelocityCEOs are emphasizing the need to make faster and smarter decisions to reducing risk and enhance competitive advantages
Variety 80% of new data growth is from non-relational and non traditional data types like emails, documents, RFID feeds, multimedia etc
In fact, there’s been an explosion of data!
© 2009 IBM Corporation
…. will have learnt to profit
from the explosion in data
The Marketeers of the future…
© 2009 IBM Corporation35
New technologies are emerging...
…changing the way we handle the explosion of data
…changing the way we handle the dynamic consumer landscape
© 2009 IBM Corporation
Extreme Innovations in Technology
Stream Computing / Data in Motion
Massively Parallel Processing driven by appliances
Unstructured Data
© 2009 IBM Corporation
Managing this explosion in data requires a change in not just technology but also mind-sets
Real time analysis of data-in-motionHistorical fact finding with data-at-rest
Traditional ComputingTraditional Computing Stream ComputingStream Computing
Batch paradigm, pull model
Query-driven: submits queries to static data
Relies on Databases, Data Warehouses
Streaming data
A stream of structured or unstructured data-in-motion
Stream Computing
Analytic operations on streaming data in real-time
© 2009 IBM Corporation38
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Continuous Ingestion Continuous Queries /Analytics on data in motion
Stream Computing: A new paradigm for ultra low latency and high throughput in-motion analytics
© 2009 IBM Corporation39
Appliances make it simple, completely transforming the user experience, providing ability to handle massive amounts of data easily
Dedicated device
Optimized for purpose
Complete solution
Fast installation
Very easy operation
Standard interfaces
Low cost
© 2009 IBM Corporation
New tools help make sense of unstructured internal/ external data by mining multiple dimensions across key business drivers
Dimensional Analysis
Filtering Voice
Keyword Search Dimensional
Navigation Drill Through to
Content
Relevant Topics Associated Themes Ranking and Volume
Relationship Tables Relationship Matrix Relationship Graph
I. COMPREHENSIVE ANALYSIS
II. SENTIMENT
IV. EVOLVING TOPICSIII. AFFINITY ANALYTICS
Business Drivers
Customer CareCustomer CareCorporate ReputationCorporate Reputation
Campaign EffectivenessCampaign Effectiveness
Competitive Analysis
Product Insight
* Supports 35 languages including English, German, Spanish, French, Greek, Japanese, Chinese (except Sentiment) and others
Dimensions Displays them in an efficient and simple dashboard*
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© 2009 IBM Corporation
Enter
WATSON
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© 2009 IBM Corporation
WATSON is IBM’s next generation computing system designed to rival a human’s ability to answer questions posed in natural language with speed, accuracy and confidence
DeepQA is the technology behind Watson:Massively Parallel Probabilistic Evidence-Based Architecture
DeepQA generates and scores many hypotheses using an extensible collection of Natural Language Processing, Machine Learning and Reasoning Algorithms. These gather and weigh evidence over
both unstructured and structured content to determine the answer with the best confidence.
© 2009 IBM Corporation
WATSON is more than a search engine – it provides high confidence expert answers to natural queries
Decision Maker
Search Engine
Finds Documents containing Keywords
Finds Documents containing Keywords
Delivers Documents based on Popularity
Delivers Documents based on Popularity
Has QuestionHas Question
Distills to 2-3 KeywordsDistills to 2-3 Keywords
Reads Documents, Finds Answers
Reads Documents, Finds Answers
Finds & Analyzes Evidence
Finds & Analyzes Evidence
In using a search engine, the decision maker is still required
to parse through the search results to find his answers
On the other hand, WATSON operates like an expert: it works to understand the question, and provides an exact answer with
some level of confidence attached
Expert
Understands QuestionUnderstands Question
Produces Possible Answers & Evidence
Produces Possible Answers & Evidence
Delivers Response, Evidence & Confidence
Delivers Response, Evidence & Confidence
Analyzes Evidence, Computes Confidence
Analyzes Evidence, Computes Confidence
Asks NL QuestionAsks NL Question
Considers Answer & Evidence
Considers Answer & Evidence
Decision Maker
Using a Search Engine
Talking to an ‘Expert’
© 2009 IBM Corporation
WATSON is able to deliver these answers in natural language with Precision, Confidence and Speed
Precision Confidence Speed
• Watson combines many analytics in a novel architecture to achieve very high levels of Precision over a huge variety of as-is content
• Watson’s analytics understand the structure and wording of the question asked and finds a specific answer
• Watson answers ‘natural language’ questions: puns, slang, jargon and acronyms that must all be evaluated
• Watson-like analytics provide answers with a confidence ranking that can be gleaned from both structured and unstructured data by running hundreds of different kinds of analytical queries across different kinds of information
• Confidence levels can be used to make betting decisions and manage risks associated with possibly getting wrong answers
• Watson’s computation for Jeopardy! was optimized over 2,800 POWER7 processing cores
• Watson went from 2 hours per question on a single CPU to an average of just 3 seconds over the course of its development
© 2009 IBM Corporation
From battling humans at Jeopardy! to transforming business
Tap into a broad, open domain of Tap into a broad, open domain of cluesclues
Do all of that in under three Do all of that in under three secondsseconds
Be highly precise at finding the Be highly precise at finding the answer and put a confidence answer and put a confidence
behind that answerbehind that answer
Parse complex human languageParse complex human language
To compete at Jeopardy!, humans and computers
need to:
Watson-like capabilities can now be applied to your
business:
Manage massive amounts of Manage massive amounts of data from business operations data from business operations
and an instrumented worldand an instrumented world
Do it at the speed of business, in Do it at the speed of business, in real timereal time
Have a high level of confidence Have a high level of confidence in analytics to make key in analytics to make key
business decisionsbusiness decisions
Deal with structured and Deal with structured and unstructured data to gain unstructured data to gain
meaningful insight into your meaningful insight into your businessbusiness
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© 2009 IBM Corporation
The core technologies behind WATSON are already available and can help enterprises in many different ways
Natural language recognition to understand the original customer questions and answers
Voice Recognition to allow a non text interface
Ability to provide “reasoning” when feeding back recommendations
Optimized workload to allow massively parallel searches to be handled quickly & efficiently
Free text Analysis of structured and unstructured data to aggregate the available social media and review sites
Location services to narrow down customer feedback to like customer segments
Machine learning to continuously improve the accuracy and relevance of recommendations from customer to customer
Social Media Analytics and semantic frameworks to extract the meaningful reviews and feedback from the vast arrays of available information
© 2009 IBM Corporation
Pushing the Frontiers of IT
WATSON, the Internet of Things, Stream Computing, Workload Optimised systems…
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© 2009 IBM Corporation
To find out more on how we can help you in ‘Age of Now’, contact:
Suresh Shankar Director, GPS [email protected]+65 9663 9144