A Buyer s Guide to Customer Analytics
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- Eleanore Cunningham
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1 White Paper A Buyer s Guide to Customer Analytics Five Crucial Criteria for Success
2 Every interaction with your customers provides deep insight into their behavior, attitudes, and opinions insight that you can leverage to improve customer relationships and your competitive edge. Introduction Customers are the lifeblood of your business. And the relationship you have with your customers is more important today than ever before. How your customers feel and talk about your company and its products or services can, in an instant, propel you to the heights of racing to keep up with burgeoning customer demand or quickly turn one unhappy customer into hundreds or even thousands, leaving you frantically trying to push overstocked inventory to uninterested customers. The good news is that, while the importance of cultivating customer relationships continues to grow, the number of customer touchpoints and sources of customer data also continues to multiply. Every interaction your customers have with your business point-of-sale transaction details, loyalty card information, customer surveys, and social media content from Facebook, Twitter, Foursquare, Pinterest, and more provides deep insight into customer behavior, attitudes, and opinions that you can leverage to improve customer relationships and your competitive edge. While you probably understand the value in the vast amount of customer data you collect, if you are like most organizations, you struggle to unlock that value and leverage the data effectively. Spread across disparate systems and sources, customer data resides in nearly every corner of your organization, with no way to unify it without long, complicated, and expensive IT projects. More often than not, by the time you determine what is impacting how customers interact with your company, the market has changed and the question let alone the answer is no longer relevant. The key to unlocking the value of your customer data is analytics and choosing the right analytics platform is critical to your business success. This buyer s guide will help you understand what to look for in a customer analytics platform so you can leverage the value hidden in your customer data and create stronger, long-lasting relationships with your customers. Five Crucial Criteria of a Comprehensive Customer Analytics Platform Based on experience working with innovative companies using customer analytics to gain a competitive advantage, Alteryx has developed the following list of five (5) questions you should ask yourself when evaluating a customer analytics platform for your organization. An effective, comprehensive customer analytics platform will meet each of these five criteria. Question #1: Can you incorporate all types of data you collect about your customers, regardless of where the data is stored or located? As you know, data today is never stored in a single location and is rarely consistent or uniform in nature. There s one data warehouse for point-of-sale data, another for customer relationship and loyalty card data, a third for customer care/support calls, and even more systems for the growing volumes of unstructured Big Data, including web site tracking information, application logs, and sensor data among other machine-generated content. Plus, many companies store vast amounts of customer data in cloud-based software platforms, such as Salesforce, Marketo, and other sales and marketing automation systems. These platforms can provide significant insight into the end-to-end customer acquisition and renewal process. Other locations often contain customer data as well, including Sharepoint, Amazon S3 and Redshift, Pivotal Greenplum, and other cloud-based solutions that take advantage of shared storage. And, of course, there s also the inevitable data stored on individual users hard drives, including word processing files, spreadsheets, and databases. 2
3 What is Big Data? Leading IT industry research group Gartner defines Big Data as highvolume, high-velocity, and high-variety information assets that require new forms of processing to enable enhanced decision making, insight discovery and process optimization. Traditional sources of Big Data include point-of-sale transactions and scientific research but are now expanding to include activity-generated data from sensors and TV set-top boxes, purchase path behavior data in website logs, plus the vast amount of user-generated content on social media sites. What s more, a tremendous amount of customer insight can be gleaned from individual user profiles on social media sites, such as Twitter or Foursquare. Subject-matter expert blog comments, user forums, Facebook Likes, and other social influencer review sites also provide invaluable potential insight into what consumers really think about your product or brand. Unfortunately, most customer analytics solutions cannot quickly and easily unify all of these data sources so you have a single view of your customers across all channels and systems. Some solutions are limited in the size of the data they can access, while others are limited in the types of data they can import. Without the ability to directly access, integrate, and blend all your available customer data in a single location, your picture of the customer won t get any clearer than it has been in the past. When evaluating customer analytics platforms, ensure that the solution enables you to: Access all the types of data sources relevant to the business problem, from Big Data and cloud data to local data, corporate data warehouses and social media streams; Include and process data of different types, including unstructured, semi-structured, structured and spatial; and Integrate, cleanse, and prepare the data for analysis. Question #2: Do you have access to the right third-party data to segment your customers and find new prospects? Establishing data connections from your analytical environment to your customer data housed in the plethora of different channels and systems is an important first step to really understanding customer behavior, but it only goes so far. To truly unlock the value of your customer data and drive revenue, you need to segment your customers, determine which customers will be most receptive to new offers or products, find new prospects, and focus on expanding your customer base. But that insight cannot be gleaned from existing customer data in your CRM or marketing automation systems. Only when you put your customer data in context with third-party demographic, firmographic, and segmentation data can you determine, for example, which segments of the population have purchased your products in the past and use that segmentation to identify prospects with the highest propensity to purchase in the future, generating greater revenue and increasing profit margins. When evaluating customer analytics platforms, ensure that the solution enables you to: Enrich your existing internal data with high-quality, third-party demographic, firmographic, segmentation, and geo-location data; Incorporate this third-party data as seamlessly as your internal data within a single analytic workflow; and Reduce costs with bundled, integrated data rather than adding on separate third-party data packages. Question #3: Can you get the customer insight you need within a single analytics platform? Traditional customer analytics tools and models focus on an outdated customer lifecycle: awareness, decision-making, purchase, and use and maintenance that influences future purchases. However, customers today engage with your 3
4 While reporting on your customers past behavior is important, predicting their future behavior and buying preferences is critical to your company s success. company s brand and products or services at completely different points and in different manners than in the past. Most customer analytics tools have not kept up with the evolution in customer interactions, leaving critical customer insight out of the strategic decision-making process. What s more, many tools were built to do a certain task in a certain way, and many vendors have created loosely coupled product suites both through independent development and acquisition to address the full complement of capabilities required by the modern business analyst. To find out what s driving your customers behavior, you must often jump from tool to tool: one tool for data cleansing and blending, another tool for conducting analysis, and yet another tool for reporting. And none of them feeds data to the others. To pull together all the data you need for your critical business decisions if you can get it at all often requires enlisting scarce IT specialists in your cause, which can create unacceptable delays in both analysis and actual decision-making. When evaluating customer analytics platforms, look for a solution that drives the entire analytical process in a single tool, so you can: Unify analytic workflows from data integration to analytics to sharing of analytic applications dramatically reducing not only the time to create analytics but also the time to iterate or improve them; and Reach a specific answer quickly, before the customer behavior or the market as a whole changes. Question #4: Do you have access to the right types of analytics that help you make the right decisions? To best understand your customers and make the most informed strategic decisions, you must be able to run the right analyses. You can t rely on your gut feelings or instincts, nor can you rely on error-prone spreadsheets. What s really driving customer demand? Which offers were successful and which were duds? How many prospects were you able to turn into real customers last month? While many of the traditional customer analytics solutions on the market can help you get your arms around those basic questions, that s just not enough in today s market reality. Reporting on past behavior is important, but conducting sophisticated predictive analytics that helps you anticipate your prospects and customers buying preferences and future behavior is the golden ring. When evaluating customer analytics platforms, you should look for a solution that enables you to: Access a wide range of statistical, predictive, spatial and other advanced analytics tools; Make these tools accessible to a wide range of decision-makers within your enterprise, without steep learning curves or complicated code writing; Allow users to leverage the vast amount of open source predictive models that exist using the R statistics and predictive language; and Embed these analytics into analytic applications quickly and easily, delivering their power to users while hiding their complexity. 4
5 Giving your data analysts and artisans access to sophisticated, predictive analytics enables you to keep your finger on the pulse of customer behavior and change course quickly when needed. Question #5: Are the analytics tools easy enough to use so you don t have to rely on IT resources? With the viral, always-on nature of the Internet and especially social media ensuring that you can respond quickly to customers needs, desires, comments, and yes, complaints, is a necessity. One wrong move and you can turn your cadre of happy, loyal customers into a huge brand problem. Keeping your finger on the pulse of your customers and changing course quickly based on that pulse, is crucial for today s successful business. But it s often difficult, if not impossible, to get the answers you need so you can make those strategic business decisions due to the historical dependence on overworked IT staff and expensive statistical experts for custom analytics. After a detailed scope of work and long delays, the analytics are often no longer relevant to the business situation at hand. Plus, not every consumer of analytic output wants or needs to be involved in creating complex analytic workflows; it s important to be able to put the power of customer analytics in the hands of everyone in your organization, many of whom have vastly different needs and experience levels, but all of whom impact your customer relationships. Many organizations have turned to cloud-based business intelligence (BI) as a solution, only to find themselves faced with a no-win situation in getting data and analytics into the hands of the right people: either use a modern Cloud BI solution with compelling visualization but limited analytics, or implement an expensive, legacy solution in a hosted cloud that still doesn t make data or analytics more accessible. When evaluating customer analytics platforms, you should look for a solution that enables you to: Give data analysts in the line-of-business access to sophisticated, predictive customer analytics without relying on scarce IT specialists or expensive data scientists; Allow more casual, less frequent consumers of analytics to easily incorporate data and selections relative to their needs and get results quickly, without requiring knowledge of the underlying analytical workflows; and Support the IT department s need to control access to data, but allow them to offload development of analytics to the individual departments that are most familiar with the data and business problem at hand. With Alteryx we can dig deeper into our customer transaction data and find out more about our customers at a store-by-store and household-by-household basis. By doing that we become more relevant to our customers. John LeTourneaux, Analyst, The Kroger Co. 5
6 Alteryx Analytics has proven itself in some of the most challenging Big Data environments, handling everything from hundreds of demographic variables across millions of customer records for Experian to analyzing 0.6 TB of new set top box data collected every day from over 7.9 million Time Warner Cable subscribers. The Alteryx Solution for Customer Analytics Alteryx Analytics uniquely meets all five criteria for a comprehensive customer analytics solution. As such, it: 1. Creates a complete picture of customers across all channels and systems. Alteryx Analytics is the only analytics platform that enables you to access, cleanse, and blend virtually any data source across any channel or system, regardless of volume, variety, or velocity, deriving greater value than ever before from your customer data. Whether structured or unstructured and whether it physically resides in your enterprise or in the cloud, Alteryx lets you connect to and combine all of your data in a single location, creating a 360-degree view of your customers across all channels and systems. Alteryx Analytics has proven itself in some of the most challenging Big Data environments, handling everything from hundreds of demographic variables across millions of customer records for Experian, to analyzing 0.6 TB of new set-top box data collected every day from over 7.9 million Time Warner Cable subscribers. In addition, you can easily create sophisticated analytic workflows that take advantage of in-database analytics for Teradata and Aster databases, including complex cross-platform analytics, dramatically reducing the time and expense of doing analysis across multiple platforms. Alteryx Analytics provides access to virtually any data source, including: Data warehouses and databases, such as Oracle, IBM Netezza, Pivotal Greenplum, and Teradata ERP and cloud-based applications, such as Salesforce.com and Marketo Hadoop-based Big Data NoSQL databases, such as MongoDB Social media data, including Twitter and Foursquare Flat files, including word processing documents and spreadsheets 2. Puts third-party consumer and business insight just a click away. You know that the right data drives the right decisions, but corporate or even external data sources don t always give you the context and insight into your customer and market environment that you need. That s why Alteryx uniquely packages the industry s leading third-party customer and market data within Alteryx Analytics, enabling you to quickly and easily put your customer data in context. Thanks to tight integration between Alteryx and these third-party data packages, not only is deep insight into your customer data just a click away, it also saves you the expense and cost of procuring and integrating these packages yourself. Alteryx Analytics includes the following third-party customer and market data: Experian household, demographic, and segmentation data Dun & Bradstreet business firmographic data Tom Tom geo-spatial data for location intelligence 2010 US Census data 6
7 Alteryx Analytics uniquely meets all five of the critical criteria for a comprehensive customer analytics platform, enabling you to leverage the value hidden in your customer data and create stronger, long-lasting relationships with your customers. 3. Delivers all phases of the analytical process in an intuitive workflow. Alteryx Analytics eliminates the need to jump from tool to tool or to rely on scarce IT specialists or expensive statistical experts within your organization to deliver the information you need for analysis or decision-making. Bringing together the ability to blend, analyze, and share data in a single platform and workflow, Alteryx makes it easy to incorporate all aspects of analysis and package this data into a powerful analytical application for use by critical decision-makers. With Alteryx, you can foster analytic creativity and inspire deeper business insights in hours, not days or weeks as is common with other analytics platforms. 4. Offers the ideal combination of data mining, spatial, and predictive tools. With Alteryx Analytics, you can easily gather, cleanse and analyze your data in an intuitive workflow and then add powerful spatial and predictive analytics within the same workflow to glean even more value from your customer data. The powerful Alteryx geo-coding engine turns basic names and addresses into spatial information that can deliver valuable visual insight and reveal new details about your customers, such as proximity to store locations and other consumers, plus buying patterns, enabling you to better target offers and create new revenue streams. What s more, because Alteryx embeds the R statistical language directly into the platform, anyone in your organization can write sophisticated analytical workflows and predictive analytics applications using pre-built tools, without requiring complex scripting or coding. 5. Makes powerful analytics accessible to line-of-business users. Alteryx Analytics uniquely enables everyone in your organization to use statistical, predictive, spatial, and other advanced analytics without requiring the skills of expensive specialists or data scientists. Thanks to its powerful yet easy to use drag-and-drop interface, anyone no matter what his or her skillset can create sophisticated analytical workflows. When you re ready to share your analytical workflows with others, you can leverage the power of secure, cloud-based technologies to simplify and accelerate how everyone in your extended organization including partners, customers, and suppliers can consume powerful analytics. With one click, and without any assistance from overburdened IT staff or expensive data scientists, you can publish analytic applications to the Alteryx Analytics Gallery, a public cloud offering where business decision-makers can perform sophisticated analytics in a familiar, application-based setting. The Alteryx Analytics Gallery represents a revolutionary shift in how you create, deploy, and consume analytic applications. No matter your degree of analytical expertise, you can browse a collection of private analytic applications shared personally with you by your organization s data analyst to blend and enrich data, plus perform detailed analytical, spatial, and predictive modeling. Or, you can browse the wide range of general interest and vertically focused analytic applications in the public gallery to quickly analyze uploaded datasets or generate a specific piece of insight based on their selections. If the analytic application needs to be modified in accordance with local business rules, you can easily download it from the Alteryx Analytics Gallery to the Alteryx Designer for customization. Consuming analytic applications has never been this easy! 7
8 Alteryx Analytics uniquely meets all five of the crucial criteria of a comprehensive customer analytics platform. About Alteryx Alteryx is the leader in data blending and advanced analytics software. Alteryx Analytics provides analysts with an intuitive workflow for data blending and advanced analytics that leads to deeper insights in hours, not the weeks typical of traditional approaches. Analysts love the Alteryx analytics platform because they can deliver deeper insights by seamlessly blending internal, third party, and cloud data, and then analyze it using spatial and predictive drag-and-drop tools. This is all done in a single workflow, with no programming required. More than 300 customers, including Experian, Kaiser, Ford, and McDonald s, and 200,000 + users worldwide rely on Alteryx daily. Visit or call Access to All Data Integrated 3rd-Party Data Single Analytic Solution All Necessary Analytic Tools Accessible by LOB Users Conclusion Alteryx Analytics Platforms BI Platforms Cloud BI Platforms Your relationship with your customers is more important today than ever before, and every interaction provides deep insight into their behavior, attitudes, and opinions insight that you can leverage to improve customer relationships and your competitive edge. Using customer analytics, you can leverage and unlock the value in the increasing volume of customer data, but you need the right customer analytics platform to help your organization succeed. To transform your organization from one that merely possesses customer data to one that extracts real value from it, analytic capabilities must be placed into the hands of business analysts and business decision-makers. These people may not have PhDs in data science and statistics, but they know your business, understand what data is relevant to it, and are smart about what they need to get done. With Alteryx Analytics, you can make data more accessible, more usable, and more experiential, thereby empowering your employees to make better, more informed, impactful strategic business decisions. Victa BV Demmersweg BN Hengelo tel. +31(0) info@victa.nl Alteryx, Inc. Alteryx is a registered trademark of Alteryx, Inc. 3/14
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