All your big data will mean nothing without systems of insight

Businesses want to use data to understand customers, but they can’t do that without harnessing insights and consistently turning data into effective action

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Your relationship with your customer has become increasingly personal. Your business is starving for customer analytics that help you better understand each individual customer — not just a broad customer segment.

That focus on individual customers means we’re entering a world of extreme segmentation. This new focus is a key strategy for companies that realize that understanding and meeting individual customer needs addresses what Forrester data has identified as businesses’ top two priorities: revenue, and customer experience transformation. Big data, of course, will play an enormous role in addressing both of these priorities, but without a systematic way to harness data and turn insight into action, your efforts are doomed.

On its own, big data addresses only part of your data problem: turning more data into deeper insight. Many companies have already bought into this and are investing heavily.

But it’s not enough. Big data alone does not validate the value of insights against business outcomes, deliver insights into where those original insights create effective actions, or create continuous learning.

Systems of Insight — the business discipline and technology to harness insights and consistently turn data into effective action — deliver on what all the big data noise can’t promise: tested insight at the point of action and continuous learning. In Forrester’s research, we identified a type of digital predator, the insights master, which has built entirely new business models around systems of insight. Amazon and Google were pioneers; more recently, Facebook, LinkedIn, Netflix and Uber have fit this profile.

Insights masters share some common behaviors. They bring together insights teams that unite developers, data and business experts to work directly with a digital leader, with a budget and an outcome to manage. The teams also utilize agile continuous-delivery methods and source data from everywhere, working collaboratively to codify, approve and deliver insights to software.

But how do you apply systems of insight to customer experience? Three factors influence your customers’ perception of an experience with you: how effectively your company meets customer needs, how easy you are to do business with, and how positive or negative an experience made the customer feel. Systems of insight can improve all three by doing the following:

  • Helping you care for high-value customers in their time of need. Your customer’s needs are contextual and change all the time. Due to adverse weather conditions, is your high-value customer stuck in a crowded airport with no information, no place to sleep, and no way to get out? An insights team dedicated to your customer’s journey will be able to sift data, discover insights — like the fact that hotels are filling up due to flight cancellations — and recommend action to customer-care employees who tend to your high-value patrons.
  • Solving problems efficiently when customers transact. When customers want to transact with your firm, they expect it to be easy. Disconnected processes and employees who lack cross-process insight frustrate and drive them away. Systems of insight unify data across process silos and use insights to drive contextually relevant and easy experiences. For example, if your customer has just tried to make a payment on your website and failed, a system of insight arms your contact center agents with knowledge to quickly resolve the problem.
  • Disrupting the competition with revolutionary experiences. Digital predators create new experiences that competitors cannot easily replicate. For example, online retailer Stitch Fix sells clothes to people who don’t want to spend time shopping. The company’s competition must get customers online or into a store, but Stitch Fix uses insight to just send clothing. As another example, Tesla Motors uses a system of insight to continually improve the customer driving experience, sometimes while customers are driving. Ford Motor, General Motors and Nissan are only now starting to do this.

Forrester estimates that gearing up your first systems of insight and evolving your current capabilities to a digital insights architecture will take one to three years and $2 to $10 million — not a trivial sum. The cost may seem prohibitive but, without systems of insight, you’ll just be producing a lot of “interesting” data with no actionable insight in an era dependent on creating personalized customer experiences.

Brian Hopkins is a vice president and principal analyst at Forrester Research.

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