"Know thy customer" is the first rule of business. What does that mean today? Companies are realizing the only way to influence the behavior of their customers is to know them on a deep level. In a world where our virtual lives and our "real" lives are converging, however, that deep level requires instantaneous updating via real-time data and analytics.
CIOs have their work cut out for them if they hope to implement the real-time personalization of customer service, but this is clearly a trend. As I learned in my reporting this week on what the Obama-Biden campaign can teach CIOs about real-time data and analytics, personalization ("microtargeting," in campaign talk) is the holy grail of purveyors everywhere. Retailers, manufacturers, political campaigns -- you name it -- hold this truth to be self-evident: To win us as customers is to know us -- and not just by what we buy or do, but by how we feel -- right now!
"Imagine walking into a Starbucks where a ceiling camera recognizes you, knows what you usually order, and more important, can analyze your face to determine your mood," Forrester Research analyst Mike Gualtieri told me. "You get to the counter, and the barista says, 'You look like you could really use a vanilla scone today; here's one on the house.'"
Move over, hybrid cloud: Hybrid big data analytics is around the corner
To do that kind of personalization you need real-time data (probably of the big variety) and predictive analytics, Gualtieri said. Companies such as Google, Amazon, Facebook and Netflix are paving the way for mass market personalization, he said, just as some of them did with cloud computing. Now these giants are exploiting the potential of real-time data analytics, and companies will line up to buy it.
Companies are realizing the only way to influence the behavior of their customers is to know them on a deep level. However, in a world where our virtual lives and our 'real' lives are converging, that deep level requires instantaneous updating via real-time data and analytics.
Gualtieri predicts the adoption of "big data" and analytics will include a mix of on-premises systems and public services, similar to the hybrid cloud model deployed by many enterprises. There are plenty of startups out there vying to turn big data into gold. "A good example is a company called BloomReach, a predictive analytics service that hooks up to a company's e-commerce website and looks at what terms people are searching on, and injects other product recommendations into the site," he said.
Trolling websites for customer search terms will not be enough. To take advantage of the personalization that, for example, helped the Obama-Biden campaign win a sufficient number of hearts and minds, companies will have to change the ways they analyze customers, said Todd Thibodeaux, CEO at CompTIA. Businesses -- and their business intelligence systems -- need to move beyond blunt, company-centric market research (When do you intend to buy? How much do you want to spend?). If businesses really want to provide personalized customer service, they will have to give up their habit of sticking customers into neat buckets, asking everyone the same questions and pushing business intelligence down to the lowest common denominator, and, instead, be willing to "deal with people on a one-to-one basis," he said. "It's a new way of looking at data and information."
The tools are there; most companies are just not using them. The hotel sector does a good job at this; so do casinos, Thibodeaux noted. In the Obama campaign, volunteers asked potential voters questions about everything under the sun in an attempt to find the nugget of information that might help the campaign press its case. It was not one call and be done, either, but call after call over time, because stuff happens, things change.
"You have to be looking for customers in smaller batches. There no longer are these huge pools of people just dying to buy any particular product out there, aside from some new product releases," Thibodaux said.
Living in the digital and physical moment with real-time data
Knowing customers deeply now also means keeping up with them. We are buffeted many times a day by new information, some of which will have an impact on our buying decisions. To keep up with a customer, the analytics must be updated in real time, according to Tony Haile, CEO at Chartbeat, a real-time analytics service. Speaking at a gathering of chief strategy officers in New York recently, he advised companies to live in the here and now, making "simple, tactical responses based on real-time time data."
Haile invoked the example of Taiichi Ohno, father of the Toyota production system, who -- by using the human body as a model -- developed a system of production fine-tuned to react to real-time data. Productivity was important, but getting it right was more important. "He knew it didn't matter how productive the factories were if they were building the wrong thing," Haile said. Ohno's answer was to engineer the systems collecting and processing real-time data so that they met the needs of the moment. The next critical innovation, Haile said, was to put data into the hands of the people on the factory floor most able to effect change, in a form they could understand. "Complex strategic decisions were replaced by simple, tactical responses."
Despite technology advances, the human body hasn't changed since Ohno's time. We still use our brains to assess, then act on the data before us. As the virtual world gets a grip on our everyday lives, however, engineering a system that can understand customers on a deep level and respond quickly to their demands will require better integration and eventually the true unification of our digital and physical selves.
Let us know what you think about the story; email Linda Tucci, News Director.