mwd

advisors

Strategic Insight
Analytics and the customer journey: driving greater loyalty and profitability
Helena Schwenk
Premium Advisory Report January 2011 Delivering an exceptional customer experience isnt just about becoming more customer centric it also involves maximising the opportunities that come from every interaction a customer has with your business over the duration of their relationship, throughout their customer journey. This Strategic Insight report examines why enhancing the customer experience is so vital to improving profitability and loyalty and how analytics can support critical junctures during a customers journey. It also outlines some of common technical challenges faced by organisations implementing analytics and how key technological advancements and innovations are helping overcome some of the barriers to successful customer experience management projects. This report has been made available free of charge as an example of our premium research reports
This report is published as part of the MWD Advisors Analytics and Information Management research program. It is an example of the wide range of reports available for download as part of the MWD Advisors personal, team or enterprise membership plans, or can be purchased as an individual report download from www.mwdadvisors.com. For further information about membership plans visit http://www.mwdadvisors.com/ec/membership.php MWD Advisors membership plans: invest in smarter decisions

MWD Advisors is a specialist IT advisory firm which provides practical, independent industry insights that show how leaders create tangible business improvements from IT investments. We use our significant industry experience, acknowledged expertise, and a flexible approach to advise businesses on IT architecture, integration, management, organisation and culture. www.mwdadvisors.com MWD Advisors 2011

Analytics and the customer journey: driving greater loyalty and profitability

Summary
The link between a positive customer experience, customer loyalty and ultimately a companys bottom line is growing stronger Improved customer experience management is an imperative today as the link between positive experiences and customer loyalty becomes more evident. It is generally agreed that loyal customers are more cost effective to retain than acquiring new ones, they are likely to purchase more products and services from your company, are less prone to leaving and are more likely to refer your company to others. Enhancing the customer experience and the resultant improvements in customer loyalty are seen as key to helping drive long term profitability for a company. Improving the customer experience is not only about being customer centric, its about maximising the opportunities that come from every interaction a customer has with your business over the duration of the relationship. This concept, commonly referred to as a customer journey, involves mapping the route customers take as they interact with your company and highlighting where along the way improvements can be made. Analytics play a key role in helping organisations optimise and support key junctures throughout this journey where the goal is to ensure that whatever type of interaction or channel used, the customer receives a consistent, personalised and compelling experience. BI, analytic and information management technologies support key element of a customer experience management solution. They provide an environment for delivering actionable insights to employees (or applications) that guide or automate the decision making process throughout the customer journey. Each insight in turn provides an opportunity to enhance and improve individual customer interactions in that way that drives greater loyalty and satisfaction. BI and analytics help in two ways: firstly, conventional analytic stacks provide an environment for integrating, aggregating and analysing large volumes of historical customer information to support the planning and execution of key customer experience decisions; secondly, operational analytics stacks make it possible to use analytic insights to deliver personalised and relevant actions at the point of action, which means they have to be integrated tightly with business processes and applications . Several technology advancements and innovations are improving the potential of BI and analytics within customer experience management projects. Pre-packaged analytic applications and greater support for guided and automated decision making are helping improve ease-of-use and support for operational analytics. In-memory, in-database analytics and columnar database are helping reduce data latency in operational analytic environments, whereas open source, appliances and cloud computing platforms are lowering some of the traditionally high upfront costs of BI and analytic software and hardware. Finally, unstructured data analytics is opening up rich sources of information that can be mined for greater competitive advantage.

Organisations need to understand and optimise the customer journey to deliver a truly excellent customer experience

Leveraging BI and analytics within an operational and analytic environments is key

Advancements in technology and deployment models are making BI and analytics easier and cheaper to use, consume and deploy

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Analytics and the customer journey: driving greater loyalty and profitability

Why the customer experience matters

Market changes and growing customer demands create new challenges
In the lead up to Christmas 2010, Europes snow and freezing temperatures keenly demonstrated how the airline industry in particular has a lot to learn about ensuring a compelling customer experience. During the severe weather many passengers across Europes airports experienced long delays, cancellations or rescheduled flights during the busy holiday period. At Heathrow one of Europes busiest airports British Airways (BA) and BAA (the airline operator) appeared to come out of it particularly badly. With hardly any planes managing to take off from Heathrow during the peak of the weather chaos BA's share price slumped while BAA boss Colin Matthews was forced to publicly apologise and face off accusations that he had under invested in anti-snow measures. While the weather experienced in parts of Europe may be more of a one-off rather than a common occurrence it underlines the link between the customer experience and a companys reputation and ultimately its bottom line. This link is becoming more evident especially in the context of the growing influence and sophistication of customers. A superior customer experience can not only drive sales, and improve customer satisfaction but is core to helping companies retain high value customers and improve customer loyalty, all of which have an impact on the bottom line. Equally for those organisations operating in mature and competitive markets, excelling at the customer experience can become a powerful way to build competitive advantage especially where their ability to differentiate on the basis of products and services is becoming increasingly unsustainable. Consequently organisations find that to compete effectively across the board they have to consider broader customer experience issues. Delivering a consistent and exceptional customer experience however is not only about putting the customer first; its also about maximising the opportunities that come from every interaction a customer has with your company over the duration of the relationship, whether this interaction happens prior to or during the sales process or equally during product delivery or customer support. Not only are todays customers more discerning and demanding than ever before, they are also utilising a greater number of touch points to communicate with a company whether this is in-store, online or via a mobile device. At the same time, smart connected customers using social media such as micro blogging, online forums, chat, and video-sharing sites are able to spread news about their experiences good and bad far and wide in seconds. Perhaps not surprisingly this proliferation of customer channels and social media increases an organisations risk of not being able to deliver a compelling and joined up customer experience across all touch points and interactions. The challenge for organisations is ensuring they meet a customers needs during each interaction whilst leveraging each channel (some of which are outside their control) to enhance the customer experience, fuel competitive advantage and deliver bottom line benefits. In the case of BA (as outlined in the introduction) one of the ways a better customer experience could have been achieved was to communicate flight conditions to passengers more effectively and ensure its most loyal customers got the assistance they needed, whether this was via an online channel (such as the companys website, Twitter or via a mobile device) or in person, by empowering front line workers with actionable information that enabled them to be more responsive to passenger demands.

The connection between customer experience, customer loyalty and increased profitability
Getting the customer experience right can of course reap significant rewards, especially when it leads to greater loyalty and customer advocacy that in turn generates long term profits for a company. In order to be a market leader companies need customers who are ardent 'advocates' customers who are highly loyal and drive new business to the company. Rather ironically the airline industry was one of the early pioneers of loyalty marketing programmes when it introduced its frequent flyer schemes, designed to reward high value passengers with air miles that could be collected and redeemed for free travel.

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Analytics and the customer journey: driving greater loyalty and profitability
The benefits of loyal customers are well understood. It is generally agreed that it is more cost effective to retain customers than to acquire them. Loyal customers are also likely to purchase more products and services, cost less to serve, are less likely to switch to a competitor and often refer your company to others. In fact, loyalty guru Frederick Reichheld asserts that loyalty leaders grow, on average, more than twice as fast as the industry average across a wide variety of industries 1. In the UK for example Tesco, the worlds third biggest retailer by sales, attributes its phenomenal growth and success to its Clubcard customer loyalty scheme. Apart from the benefits its brings in incentivising and creating loyalty amongst customers, the data collected by the scheme has been fundamental to deepening the companys understanding of its customer base, and for segmenting customers and tailoring products and services to specific groups or markets. However there is a caveat to all of this: not all loyal customers are necessarily profitable ones. To ensure efforts are directed at the right customers, organisations need to be able to pinpoint what makes their customers loyal, and understand the profitability of each customer segment so they can improve or cease relationships that are not proving profitable. Customer Lifetime Value (CLV) is a commonly used metric that helps provide a measure of how each customer is valued and can be used to determine exactly how much an organisation should be willing to invest in acquiring or retaining that customer. In short, companies can achieve greater profitability by increasing the lifetime value of profitable customers, all of which can be significantly improved upon through a compelling and rewarding customer experience.

Loyalty Rules: How Todays Leaders Build Lasting Relationships by Frederick F. Reicheld (ISBN-10: 1578512050)

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Analytics and the customer journey: driving greater loyalty and profitability

The customer journey and opportunities for applying analytics

So what exactly is the customer experience? A good way of thinking about the idea of customer experience is: The sum of all experiences a customer has with a supplier of goods or services, over the duration of their relationship. The argument inherent in this viewpoint is that looking at customers experiences from the perspective of one-off transactions is only going to take you so far. What can appear to be a series of one-off transactions from a suppliers perspective is actually part of a journey from the customers perspective and that journey can be intensely frustrating for customers, even if individual interactions within that journey pass off without problems. In other words virtually every customer touch point or interaction whether directly or indirectly contributes in some way to customer perception, satisfaction, loyalty, and ultimately profitability. The concept of a customer journey is a great place to start if you want to understand how an organisation can leverage analytics to improve its customer experience. A customer journey, as shown in figure 1, can be seen as the series of touchpoints that a customer goes through as they seek to do business with your organisation but its important to focus beyond a simple sales cycle, and to put the customer at the centre. The customer journey is a well understood concept used by marketing professionals. The idea is to map out the journey that different kinds of people will take as they seek to do business with you, and look for points in that journey where the experience breaks down from the customers perspective. Figure 1: A simplistic view of a customer journey
Continue or stop

Investigate

Purchase

Deliver

Use

Get support

Tell friends

Applying analytics as part of the customer journey

There is a close correlation between analytics and being customer centric as the former can play a key role in each phase of the customer journey as well as in the planning and implementation behind customer journey initiatives. In the context of the customer journey, analytics and BI can be used to underpin core business functions, processes, interactions and touch points that impact on the customers journey. These include: Investigate. This is when a customer or prospect is looking for a product or service that meets their needs. Analytics can become a key component for supporting this stage of the customer journey by underpinning key activities such as: Marketing campaign management. Supports the planning, testing, execution and monitoring of highly tailored multi-media marketing campaigns to promote an organisations product or service Marketing optimisation. Uses forecasting and optimisation techniques to assess the right mix and level of investment afforded to advertising and promotions activities.

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Analytics and the customer journey: driving greater loyalty and profitability
Acquiring customers. Using advanced analytics to help organisations accurately target the best and most profitable prospects for acquisition. Survey and marketing analysis. Using text mining tools to understand about people, their thoughts, opinions and behaviours in order to better understand their product needs and requirements

Purchase and deliver. This is when the customer or prospect purchases the goods or services and takes delivery; analytics can support key areas of this capability such as: Pricing optimisation. Use analytics to optimise the price offered at the right time in view of sales performance, competitor actions and new market opportunities. Profiling and segmenting customers. Use advanced analytics to create customer profiles or personas to better understand customers preferences and identify those customers who might be suitable for cross sell and upsell opportunities. Market basket or product affinity analysis. Identifies products that sell together by looking for trends in customer and product purchase data. Sales analysis. Use BI and analytics organisations to understand the demand, cost and profitability of products and services. Calculating profitability. For customers, products and channels at the level where costs are incurred.

Continue or stop. This is when a customer decides to either continue using the product or service or finish their association with that product or service. Analytics supports key elements of the customer journey by enabling organisations for example to: Retain customers. Historical data and data mining and predictive projections can be leveraged to assess the motivational and behavioural factors associated with customer churn or defection and to provide insights into what can be done to prevent them from leaving. Calculate the next best offer. By mixing decision models and business rules organisations can determine how best to approach or service a customer prior to and during an inbound interaction such as a request, complaint or an inquiry.

Get support. Customers and prospects can need help at any time, and expect to be able to get it even before theyve bought anything. Their ability to get the right supporting information quickly may make an average experience into a stellar one, even if they dont buy in that particular instance. Analytics can support many aspects of this process by: Utilising Customer Lifetime Value (CLV) calculations to dictate the appropriate prioritisation and level of service to apply to a customer interaction. Tracking customer service and the analysis of unstructured data such as support logs and emails to improve the understanding of customers frequently occurring question, issues and complaints.

Tell friends. It might not be an integral part of the interactions a customer has with your organisation, but smart organisations are finding ways to take proactive roles in conversations that customers have with their peers online so they can influence the overall experience the customer has. Analytics supports this capability through: Social media analytics. Using the analysis of unstructured text such as public forums, webchat, social network content and blogs to stay abreast of sentiment, put out fires and demonstrate to customers that they care about their wants and needs.

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Analytics and the customer journey: driving greater loyalty and profitability
Social network analysis. Using advanced analytics to understand the value of a customers influence in the context of your social community.

Understanding the past, the here and now, and the future
As mentioned previously, BI and analytics can be used to model, measure, predict or provide actionable insights that enable organisations to deliver a superior customer experience. In order to understand how to deliver these insights, its worth differentiating between the various components of BI and analytics technology. Perhaps not surprisingly, CRM applications are a natural home for analytics as they provide packaged capabilities for out-of-the box analytic models, template, reports and dashboards. In this regard they provide a good entry point for applying analytics to the customer journey as they are focused around specific customer processes and real time interactions. However they often lack analytic and data management depth and flexibility and this can prevent them from becoming a one-stop-shop for customer experience analytics that offers a differentiated and personalised customer experience. If anything, CRM analytic applications should be complemented by the conventional BI and analytic stack which consists of: Foundational BI tools. Tools such as standard and adhoc reports and OLAP for querying, reporting, and comparative analysis capabilities. Advanced analytics tools. Tools such as text, predictive and data mining tools are used to uncover previously unknown trends and patterns in large volumes of structured and unstructured data. Equally recommendation and optimisation engines, business rules and simulation techniques can be used to determine a set of alternative actions or automate parts of the decision making process. Analytic applications. These combine domain expertise, business logic, and predefined content (such as analytic models, templates, and reports) to address a particular business issue. Examples are market basket analysis, marketing optimisation and churn reduction. Data integration tools and data management platforms. Tools such as ETL, master data management, metadata management and data quality tools together with data warehouses and data marts are responsible for structuring, cleansing and integrating data in a format that is accessible for analysis.

Expanding focus to higher-value decision-making Although lots of companies already use BI and basic analytics to help improve the customer experience, organisations are increasingly looking beyond these basic capabilities to derive deeper insight into their businesses to help create and sustain competitive advantage. Whereas BI has traditionally been associated with rear-view analysis such as analysing historical data and events companies increasingly recognise the value of a more predictive and forward-looking approach. Analytics differs from conventional BI because it is oriented towards knowledge discovery in which the relationships and patterns between different data points are unknown or not understood. The focus is on producing a solution that can generate useful insights, trends or predictions. In turn, analytics can help organisations ask more complex questions from their data such as what customers will drive future growth?, who is likely to churn and why? and what types of customers are likely to be interested in what products? This requires more sophisticated analysis methods such as data mining, predictive modelling and text analytics and in turn requires organisations to expand their traditional focus to identify new ways to target new or existing customers, anticipate, predict and understand customer behaviour.

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Analytics and the customer journey: driving greater loyalty and profitability
Bringing analytics into an operational environment at the point of impact Both CRM applications and conventional BI and analytics architectures have an important role to play in supporting the customer experience as shown in figure 2. The analytics stack provides an environment where a full range of unstructured and structured data analytics can be supported typically on an integrated set of data (such as a data warehouse). However the environment is not typically geared for execution in operational situations where the data is volatile and real time responses are required. The need to bring deeper customer insights into the customer journey at the point of need is driving more analytics techniques to be embedded within the operational environment. Embedding pre-built analytic models into business processes makes analytics more accessible as they can also be used to guide or automate decision-making in more consistent and repeatable ways. This is being made possible through a blended approach that typically uses the analytic environment for historical and trend analysis for building an analytic model and using customer interaction data to re-analyse and recommend the best strategy based on the course of a conversation. The output from the model is usually a recommendation for action based on a score and is used to guide the decision making process. In this scenario the analysis needed to create the model is not performed in real time, however when the model is deployed into the operational environment it runs against a single set of customer data, which is often carried out in real time. Figure 2: Meshing together operational and analytic environments

In-store

Web

Mobile

Social media

While some analytic models simply augment a human decision such as in the example above, sometimes the output can be used as part of an automated system that executes a decision. This is sometimes commonly referred to as automated decision management whereby the results of analytic models are combined with business rules and operational data to deliver targeted decisions to other services or systems. The benefit of running automated decision logic in the background is that businesses can speed up operational customer facing decisions and lower the requirements for (costly) human intervention. The rules-based nature of automated decision making means the technology is best suited to high volume operational decisions where both the problem and the relevant decision criteria are clearly defined and structured.

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Operational

Customer facing processes, applications and systems Analytic applications Scoring and recommendations BI and analytic modelling Data integration and information management Automated decision making

Analytical

Analytics and the customer journey: driving greater loyalty and profitability

Beyond the theory: what does reality look like?

Common technical challenges and pitfalls to implementing analytics as part of the customer journey
As mentioned previously BI and analytics has an important role in each phase of the customer journey as well as in the planning and implementation behind each phase. While companies are becoming more proficient and mature in their use of BI and analytics, they still struggle with the ideal of delivering a consistent, personalised and joined up customer experience throughout the customer journey. Apart from the strategic and organisational choices that inevitably impact on the success of such a project, there are wider technology issues such as data quality, complexity and lack of specialised skills that make the process of differentiating on the customer experience a challenge for many companies. In spite of the compelling reasons and potential value for investing in BI and analytic technologies, many organisations find there are barriers to implementation that prevent them from maximising its true potential and deploying analytics throughout the whole organisation. Some of the most common pitfalls to successful customer experience analytic projects include: Cost. The high cost of buying, implementing and maintaining a BI or analytics tools has so far prevented adoption of these technologies on a mass scale. The most immediate obstacle to this mass adoption comes from the high upfront cost of implementing the technology and some of the pricing and licensing models employed by many of the vendors. Lack of specialised analytic skills. As organisations continue to leverage analytics for higher value customer interactions they often find that the skills required for preparing the data, knowing what to look for in the data, making sense of that data and recognising relevant patterns and trends within it are in short supply. In spite of the high demand for analytic capabilities, the experience and skills need to make a customer experience project a success are often scarce and expensive. This is placing a premium on acquiring, developing, managing and deploying the right analytic talent within end user organisations. Data integration and quality. Issues such as poor data quality, isolated data silos and multiple versions of the truth contribute to lack of trust and confidence in customer data which can prevent many customer experience deployments from maximising their true potential and ROI. Moreover, getting a single analytical view of the customer often becomes the Holy Grail for large enterprises, especially those that sell products and services through multiple channels. The problem is by leveraging multiple channels (such as online, phone or in store), this often means multiple customer touchpoints which, from an IT perspective, means data is fragmented and strewn across multiple systems, applications and databases. This makes it much harder for organisations to service their customers and gain an understanding of their preferences, interactions and behaviour. Complexity. Another potential pitfall is BI and analytic tools themselves. Though the tools are more scalable and user-friendly than they used to be, they have still failed to penetrate the mainstream user base, many of whom still find it hard to use, navigate, and interpret the information they need to do their job successfully. Increasing both ease of use and improving the capability for self service is a core requirement for improving the adoption of BI and analytic technologies.

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Analytics and the customer journey: driving greater loyalty and profitability Hope for the future: lower technology costs, new innovations

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Although the process of applying analytics throughout the customer journey can be complex and expensive, advancements in technology and deployment models are making BI and analytics easier and cheaper to use, consume and deploy. Similarly the requirement for improving the analysis of large and complex data sets as dictated by the high volumes of customer data processed by analytic solutions is driving demand for better performing data management or data warehousing infrastructures. Several new and existing technologies are emerging that can lower the barrier to entry for those embarking on a customer experience analytics project. In the following sections we look at examples of these. Improving ease of use Today organisations have a choice between buying a pre-packaged analytic application or building one from scratch using tools for statistical analysis and modelling. Today the general trend is veering towards buying pre-built packaged solutions that aim to reduce the complexity of building predictive analytic models and pre-packaged models, reports, and processes gleaned from predictive analytic best practice or industry-proven practices. This trend is driven by the general trend in corporate IT to reduce deployment time and costs and drive faster time to value from IT investments. Similarly vendors are incorporating capabilities into their analytic workbenches which apply best practices and help automate parts of the model building process to lessen the dependency on analytic professionals such as statisticians and data miners. Equally, embedding pre-built analytic models into customer-based business processes makes analytics accessible in the operational environment, where they can be used to inform and guide a call centre agent during a customer interaction. For example, certain words or responses routinely captured by agents could automatically trigger a cross-sell model using information derived from previous and the current interactions for a more personalised recommendation. Moreover the capability to automate elements of the decision making process by leveraging business rules and predictive analytics based on mathematical and statistical algorithms can be a useful technology to drive greater precision and consistency for real time operational decisions. Mining non-traditional data sources New text and social media analytic applications are emerging to provide deeper customer insights in the rich stream of unstructured data that is captured by companies in call logs, comments, email, web chats or social media discussions. These data sources are proving to be invaluable as a source of intelligence and competitive advantage. Social media data in particular is a hot area of interest, especially as organisations look to tap new sources of online information such as Twitter feeds and blogs to understand how successful they have been in engaging with their customers, to understand their attitude and intent and to help understand how best to serve these customers in the future. However, social media analytics also raises new issues such as what social media sources to monitor, how to integrate these with other marketing efforts, as well as issues around privacy, data protection, governance and regulatory compliance. Reducing data latency The need to make decisions in faster timeframes in response to a customer event or shifting business priorities is creating demand for faster analytics processing at near real time speeds. The traditional batch-oriented analytics model can introduce latency as data is moved between transactional and analytic databases and platforms. Subsequently this mode of operation can result in delays in the decision making process or even worse cause decisions to be made on outdated or decayed information. New technologies are emerging to reduce delays inherent in this processing model including: In-memory computing. This provides business users with a fast and streamlined way to access and analyse information loads by making data available in-memory rather than the slower method of processing it on disk. This performance advantage allows users to look at data on the fly, without the need to access pre-aggregated data, pre-built OLAP cubes or for IT to undertake specialist database tuning.

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Analytics and the customer journey: driving greater loyalty and profitability

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Columnar analytic databases. These are becoming a fashionable way of storing data as they process data by columns rather than by row which can improve response time and save on disk space (due to its capability for data compressions). However the drawbacks of columnar databases are that they are slow for write operations or updates, particularly when new data has to be inserted into the columns. As such, they are particularly suitable for operational/real-time environments, where there is a need for near real time updates. In-database analytics. This refers to embedding or pushing analytic functions, procedures and algorithms within the database as opposed to having to analyse, process and model data in a separate staging area or analytic environment. This not only saves on storage costs but reduces the amount of data movement required and allows companies to take advantage of the availability of parallel processing capabilities of the source database to speed up processing times.

Reducing software and deployment costs The rise of the open source languages R and Weka and the commercial open source offerings based on them, are providing a lower cost alternative to proprietary offerings for modelling and statistical analysis, allowing companies to do predictive analytics on a lower budget. Similarly, appliances (prepackaged software and hardware bundles) promise to shorten implementation times and lower costs as they require less tuning and configuration than traditional approaches so less time and money is wasted on assembling, configuring and optimising the hardware and software infrastructure. Additionally, cloud computing is starting to offer a risk-free way to prototype and engage in analytical data warehousing and datamarts without having to invest and install IT infrastructure. The ability to get a high-performance analytic application up quickly (without waiting for hardware procurement) and to provision resources on-demand will continue to appeal to companies who want to start or trial customer analytic technology as a way of lowering the risk and cost of a project. Equally Software-as-Service (SaaS) CRM analytic applications can provide a good entry point for the most commonly used customer analytics capabilities. However, although they are good at foundational BI capabilities such as reporting and query they do tend to lack the depth and coverage of more advanced analytics such as predictive modelling and data mining. Improving performance and scalability Massive parallel processing (MPP) architectures can boost the performance of analytic systems by splitting the processing of operations across a number of parallel-processing nodes running on clusters of commodity hardware where each node works on its own set of data. This is also commonly referred to as a share nothing architecture. MPP architectures and databases are becoming increasingly common as a means to improve the processing performance and scalability of analytic systems on growing volumes of customer data at a lower cost compared with traditional approaches. A newer development in parallel processing is the uptake of distributed computing frameworks such as Hadoop and MapReduce. These distributed software frameworks offer significant benefits for analysing and processing large amounts of data in parallel across large clusters of compute nodes in a cost effective way. As such it has become a popular development area for vendors in the large scale analytic platform space.

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Analytics and the customer journey: driving greater loyalty and profitability

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What should you do?

The organisational and process perspective Organisations embarking on a customer experience initiative need to start by getting a complete view of their existing customer interactions and touch points, together with the people and processes that support them. This can then be used as a basis for identifying, measuring and understanding which touch points are essential for delivering a compelling customer experience and where any gaps or broken parts exist. In turn companies may also need to rethink and optimise existing legacy systems and processes that have until now been focused on the needs of the company rather than the requirements and needs of the customer. Above all its important to remember that a customer experience strategy needs to work across multiple business functions and silos from sales and marketing, to customer service, finance and R&D. This inevitably means the success of any customer experience initiative depends on senior executive leadership, solid management, a clear understanding by all of the benefits (and risks) of such a project and an organisations readiness for change. The skills perspective In addition those who are new to analytics or have thus far had a limited exposure need to pay careful consideration to how they source, retain and promote the highly skilled and specialist analytic professionals needed to make your customer experience initiative a success. These analytic skills extend beyond traditional BI capabilities and involve being proficient in data selection and preparation, analytical algorithms, modelling, and data interpretation. In many cases sourcing the right people and skills can be problematic, which consequently makes recruitment expensive. Building an analytical competency using in-house or professional services will be needed. Organisations that are new to analytics or have limited experience should use consultants or the vendors professional services in the first instance, using the opportunity to learn from the experts and undertake skills transfer and internal staff training to promote analytical capabilities in house. Equally many companies can complement in-house expertise by outsourcing analytic work to a vendor or system integrator. In a growing number of case organisations are considering offshoring expertise to India and China where there are highly skilled and cheaper analytical resources. The technology and deployment perspective To succeed in offering a more satisfying and profitable customer experience, we believe there must be a strong focus on information management that provides an up-to-date, comprehensive view of customers, covering all touch points, interactions, transactions and experiences. In this regard, the development of a data integration layer that provides clean, consistent, timely and complete customer data is fast becoming a strategic imperative for organisations who want to pursue customer experience initiatives. Arguably the greatest value of having a single view of a customer is delivering a robust foundation for leveraging analytics (for example predictive modelling or text mining) that provides a deeper understanding of the preferences, attitudes and behaviour of the customer base so a company can better serve its customers. Organisations that are struggling with the performance of their analytics information management infrastructure should consider alternative architectures and processing models. In-database analytics, MPP architectures, in-memory and columnar databases can improve the performance and reduce data latency within analytic deployments for resource and computational intensive functions like predictive analytics and data mining. Similarly, packaged analytic applications, run on premise or as a managed service, do help address some of the complexities of analytic projects by providing packaged content and models that allows organisations to fast track some of the development process without huge investments in skills and technology infrastructure. Equally, alternative deployment models such as cloud computing, and open source analytic packages offer a way for companies to lower software license, maintenance, and service costs. However, while the lure of faster implementation times and lower total cost of ownership may provide instant appeal, organisations should be aware that these modes of deployment are still at a relatively early stage of maturity and are likely to complement rather than replace existing data and tool infrastructures.

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