Sarbanes-Oxley: Catalyst for Manufacturer’s Investment

Like any publicly traded company, this $3 billion manufacturer of microcontroller, memory and analog semiconductors must conform to the regulations set forth under the Sarbanes-Oxley rules for separation of duties. That’s what led its CIO to deploy Dynaflow Solutions for compliance, both in IT and finance.

Previous Environment
Prior to deploying Dynaflow for its workflow and compliance features, the company used spreadsheets for managing controls. It went through a complicated and time-consuming process of combining the spreadsheets with text files for audit purposes. But the Dynaflow software gives the two dozen employees who use it more flexibility, efficiency and enhanced productivity.

Benefits to Date
This manufacturer uses the software in IT to manage other processes. When there are controls that are not finance-related, they are input into Dynaflow. An example of this is the company’s process for checking on utilization of its uninterruptible power systems at regular intervals.

The CIO cautions, “Software won’t guide you into writing better controls – it’s just the place to document controls. But a documented system is more efficient than using paper. Now our checklists are electronic, so we can issue reports monthly or quarterly as necessary. That helps to manage controls and limits risk.”

Software that’s designed for Sarbanes-Oxley controls allowed this business to create an electronic version of its audit papers—work that is defensible for both an internal audit committee and public auditors. It also helps to show that the workflow engine is working correctly with inputs from around the world.

“Enterprise Governance, Risk & Compliance Solutions: Risk and Rewards with Vendor Galaxy Rankings” ©2016-2017 Hypatia Research Group, LLC. All rights reserved. No part of this research study may be repurposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management.

Is #BreitbartNews a Cereal Killer?

An often repeated quote by Bette Davis “Fasten your seat-belts, it’s going to be a bumpy ride” (All About Eve 1950) foreshadows future business practices and customer behavior in 2017 and beyond.

An example of this is the recent social media conflict between Kellogg’s cereal and Breitbart. “Kellogg’s said it decided to remove its advertising because Breitbart didn’t align with its values. It said the decision has “nothing to do with politics.”

For its part, Breitbart has called for a boycott against Kellogg’s (NYSE:K), because the cereal company decided to pull its advertising from the site.

Other brands have followed Kellogg’s lead: “Vanguard said it removed its ads as soon as it became aware that they were running on Breitbart. As a policy, Vanguard does not advertise on any overtly political websites, including the site in question,” a spokeswoman wrote in an email. In addition, 3M (MMM), AARP, Allstate, Nest, EarthLink, Warby Parker, and SoFi among others are also pulling advertising dollars from Breitbart.

While Breitbart is billing Kellogg’s decision as “bigoted and anti-American,” it’s a well-established American business practice for corporations to shift their sponsorship to companies they believe will help bolster their brand. Mutual fund companies offering socially conscious investment options and businesses that provide matching dollars for charity campaign donations are just two such examples.

Some of the more interesting social media hashtags include:

Against Breitbart:

• #BreitbartNews is a cereal killer
• Grope Nut Flakes#BreitbartCereals
• Special KKK #BreitbartCereals
• Alt-Rice Krispies #BreitbartCereals

Against Kellogg’s:

• #dumpkelloggs
• Kellogg’s: #WAR
• #BoycottKelloggs

Brands have become highly visible political weapons in our current global business environment. The question we all should be asking ourselves is, are we using our technology investments and business acumen to engage with customers for good, or for evil? Perhaps then we might mitigate the business risk of that bumpy ride.

Takata Started with J-SOX Compliance; Plans to Expand

Takata is a global supplier of safety equipment for automotive industry OEMs, including seat belts, child seats, and air bags. Following Hypatia’s recommended mantra of “start small and expand,” the company deployed IBM OpenPages specifically for compliance with J-SOX, the Japanese equivalent of the U.S. Sarbanes-Oxley regulation.

According to Christian Ries, Head of Internal Audit for Takata EMEA in Aschaffenburg, Germany, Takata originally set up the risk assessment module for its internal control systems. A regional system integration consultant, Pentos AG, was engaged to deploy the application because the internal audit team at Takata preferred to focus on its core competencies and work directly with external expertise.

Current Environment
Takata uses IBM OpenPages for J-SOX compliance with six legal entities, but it plans to roll out risk management for an additional 23 legal entities across Europe. Like many global businesses, it used spreadsheets to manage risk prior to the deployment of a GRC application.

At present, Takata is using OpenPages to improve its internal financial controls. Any data that can end up in a financial statement requires a control to ensure both accuracy and completeness at multiple steps along the way (with regulations like J-SOX, management needs to be able to confirm accuracy). In the future, Takata plans to analyze and monitor business risk, strategic risk, environmental risk, and political risk as well.

In preparation for further expansion, the company has started work on defining various types of risk and processes for responding prior to investing further in IBM OpenPages. For Hypatia’s Galaxy Evaluation of Vendors and additional business benefits on how Takata Started with J-SOX Compliance; Plans to Expand see “Enterprise Governance, Risk & Compliance Solutions: Risk and Rewards” ©2016-2017 Hypatia Research Group, LLC. All rights reserved. No part of this research study may be repurposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management.

Avoiding Fraud & Risk with Multifactor Customer Identity Authentication

Two distinct – and possibly conflicting – motivations overshadow the discussion on customer identification authentication (CIA). On the one hand, organizations want to improve customer service, which means dealing with contact center queries quickly and efficiently. On the other, organizations want to improve risk management. That means limiting to as small a percentage as possible fraudulent attempts at credit card purchases, identify theft, prescription drug misuse, or other crimes. These two motivations overlap sometimes as well: organizations strive to assure customers that their call-center processes keep personal information safe and secure.

Organizations increasingly face problems with the way they current conduct CIA, however. In today’s call center, CIA involves a variety of options.

One option is passwords, which can be hacked or forgotten. Another option is knowledge-based authentication (KBA), in which customers respond to questions that only they know the answer to. These can be static (i.e., pre-determined) or dynamic (i.e., generated at the time from background information).

Another option: ANI, or automatic number identification. If someone calls in on a number not already associated with the account, the call is flagged as a risk – even though it may be an actual customer calling in from a mobile phone, a hotel room, or an office.

These are all fairly established methods. Another option is out-of-band authentication (OOBA); for more on this option, see our business return on investment assessment “E-Commerce Vendor: The Value of Out-of-Band Authentication.”

Accuracy, Security, Cost & Customer Effort
The problem: all of these either take too long, or cost too much, and/or are intensely disliked by customers (for instance, the answer to the question “who’s your favorite author?” might not be the same in 2016 that it was in 2010). The authentication process can take from 30 to 120 seconds, while customers’ preferred waiting time is just 60 seconds. In addition, we estimate that it costs 50 cents to authenticate each customer in the contact-center environment. Furthermore, industry estimates peg the percentage of calls because of “account lockouts” – that is, failure of passwords or challenge questions – at anywhere from 15 to 20 percent of calls, averaging one per hour per customer service agent.

For many years, vendors have promoted biometrics as a way to ensure authentication of a customer. These methods – which include fingerprint scanners attached to USB ports; retina scans using cameras, again attached to USB ports – tend to be both expensive and or inconvenient. While they are occasionally used in high-end security facilities and law enforcement, they have failed to gain traction in the part of the marketplace where cost is crucial, such as office workers. However, they are still viable in high-cost transactions, such as corporate wire transfers, or in law enforcement identification scenarios.

Conclusions
Customer identity authentication in the age of digital interaction, customer engagement and commerce is a highly necessary component of protecting customers from fraud as well as for managing business risk. While many organizations often consider a certain percentage of fraudulent transactions as an acceptable (risk calculation) cost of doing business, the bigger issue is how to prevent fraud and identity-theft related losses while enhancing the trust, quality and security of the customer experience.

There are many types of identity authentication technologies available. Some focus on finding patterns of fraudulent interactions and increasing visibility into these pretenders in order to block them. Others leverage keywords and passwords (KBA), biometrics (fingerprint, voice, retina-scan), and/or multi-factor authentication to name a few. In addition, organizations may have also utilized the following techniques:

• ANI spoofing detection
• Audio Analysis
• Behavior Analytics
• Biometrics
• Context and/or Telephony Analytics
• Dynamic knowledge based authentication KBA (answering a security question)
• Out of Band Authentication (OOBA)
• Speech Analytics
• Static KBA

We recommend businesses deploy authentication methods that are consistent across channels and modes – customers don’t care that you’ve selected different tools for online e-commerce and contact center usage. They think of your brand as one entity, and that’s the face that should be presented. Companies should seriously evaluate investment in voice biometrics technologies for the following reasons:

• Companies may reduce authentication related calls due to customers forgetting passwords by up to $.50 per minute. (Average call time 2 minutes);
• Reduction in false positive fraud and risk alerts has the potential to save businesses significant time and resources spent researching issues; (Estimated 1 in 3,000 calls is fraudulent;
• Customers want secure, consistent and frictionless access to brands they do business with via all channels of interaction: ATM, Call Center, IVR, Mobile, and Online.

©2016-2017 Hypatia Research Group. All Rights Reserved. | “Avoiding Fraud & Risk with Multifactor Customer Identity Authentication” is an excerpt from“Customer Identity Authentication: Best Practices for Avoiding Contact Center Fraud and Risk.” No part of this research study may be repurposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management.

27 Brand Mandate at L’Oreal

Leveraging Value via Social Analytics & Intelligence

L’Oréal USA, headquartered in New York City, with sales of $5 billion and 9,800 employees, is a wholly-owned subsidiary of L’Oréal SA, the world’s leading beauty company L’Oreal, (OR:EN Paris), (LRLCY:OTC US), with a portfolio of 27 international, diverse and complementary brands such as Garnier, Kérastase, Essie, Lancôme, Giorgio Armani Beauty, Yves Saint Laurent Beauté, and The Body Shop and was founded over 100 years ago.

Corporate Goals:
As a consumer goods company operating in over 50 countries worldwide, each with distinct cultures, languages and preferences for how customers wish to purchase, interact and communicate with the brand, L’Oreal USA executives were looking for an enterprise approach to social media and initially, three core objectives were identified:

•  Monitoring relevant topics and issues by volume, share of voice and timeframe;
•  Outreach and engagement via customer service and support functions;
•  Creation of business and customer insight for multiple stakeholders in various functions across numerous geographies and cultures.

Sounds simple, n’est-pas?

Challenges:
Social media in 2012 is hotter than summer in Morocco. Each brand and each department is interested in funding and acting on pertinent insights that might be derived from consumer feedback and user generated content. If allowed to grow organically within L’Oreal, silos could abound and each department in each brand would focus on what is most important to them only. Establishing a global enterprise approach with the goal of meeting the needs of all business stakeholders was a formidable decision, but very necessary to align with the company’s goal of achieving global solutions.

Breaking-down silos enable brands to not only meet the requirements of all business stakeholders but also to exceed expectations. Otherwise, the result would likely be inconsistent, inefficient and costly ad hoc efforts to utilize social media.

It is not surprising that a large organization the size of L’Oreal has a wide variety of business needs when it comes down to reasons for utilizing social media. For example, in addition to brand and reputation monitoring, this personal products company also wanted to employ social media tools for these business use cases:

•  Risk and crisis management;
•  Product Ideation and innovation;
•  Competitive Intelligence;
•  Insight into consumer behaviors or purchase triggers;
•  Customer service and support;
•  Relationship building.

In addition, the company quickly found that the high volume and velocity of conversations made it impossible to handle this manually even with additional resources allocated to finding, managing and analyzing topics and issues of relevance.

For the first two years, L’Oreal employees used “training wheels” in the form of free tools and then adopted Salesforce Radian6 across several geographies. At this point, classification of topics aided in “finding relevant needles in the haystack,” but the volume and velocity continued to increase as more consumers migrated to using social media. Managing this became too challenging to be as effective as desired for the company and other solutions were put on the table for consideration…vendor selection criteria continued in “Social Analytics & Intelligence: Converting Contextual to Actionable Insight”

Lessons Learned & Results:
In order to successfully break down internal silos and create truly collaborative cross-functional teams, top management support is essential. As with all new tools, a lot of people want to not only play with them, but retain ownership of the business benefits.

At present, the consumer care group manages the data and the conversations in real time. This group is already used to manage real time consumer interactions with other channels, phone and email, and as consumer conversations can be across multiple channels, social can become an escalation mechanism if an issue is not resolved promptly.

Currently, only three objectives are measured in order to enable the line of business executives to take action effectively. In 12 months L’Oreal expects to significantly reduce agency costs and has plans to realize significant return on investment by using social customer intelligence to dynamically adapt creative content online in real time interactions with customers with the goal of influencing their purchases more effectively.

Hypatia’s Assessment:
With a corporate strategy, operational plan, extensive domain expertise, performance metrics and phased approach, L’Oreal exemplifies one of the most mature levels of social analytics and intelligence usage from among the companies interviewed. (This Business ROI Evaluation is excerpted from: “Social Analytics & Intelligence: Converting Contextual to Actionable Insight” ©2012-2016 Hypatia Research Group. All Rights Reserved.

Capture, Analysis and Utilization of Customer Information (Part 3)

If customer expectations for historical knowledge, service and support, and value-added products and services seem high, it is because they are aware that industry is tracking them at a granular level—by brand preference, mobile device or IP address, warranty card registrations, product and service transactions, online behavior, demographic information and lifestyle stage. Moreover, advances in mobile, social, digital, online, interactive voice response, chat and Omni-channel customer engagement coupled with a reduction in business staffing serves to shift costs away from a company’s bottom-line to business and consumer customers.

Customers Create the Information Businesses Purchase & Use

Figure 1: Information Services & Decision Analytics: Supply & Demand Chain. ©2016-2017 Hypatia Research Group. All Rights Reserved.

In turn, customers expect that information gathered will be used to personalize the next interaction or communication they receive from businesses from whom they regularly purchase.

To create an operational foundation for data analysis and decision support, leading organizations most often take one of three approaches in the capture, analysis and utilization of customer information:

• Self-Reliant: Create an internal center of excellence comprised of statisticians, analysts and database marketing experts for decision analytics services. Partner with the internal IT department to develop a cohesive customer data management and governance process;
• Source Expertise: Partner with one or more providers of information services and/or independent consultancies for flexible, on-demand expertise;
• Hybrid Approach: Utilize in-house expertise combined with external expertise on a flexible per project basis, managed services, annual retainer or subscription model.

Case in point: Large office supply retailer Staples utilizes a hybrid approach to capturing, managing and applying marketing science techniques and services. An internal database marketing group comprised of 12 data modelers, analysts, statisticians, project managers, and marketing operations staff is accountable to help boost results by providing specific models (e.g., customer value, retention, acquisition or loyalty) to the direct marketing, merchandising, corporate strategy, catalog, online and SOHO business units. Additionally, consumer data is sourced from Acxiom, business data from D&B, and data enhancement, lifestyle cluster modeling and scoring services from Experian’s marketing services group.

Challenged by information overload, Staples explored a phased approach to executing a “single view of the customer initiative.” Designed to integrate and standardize the volumes of Omni-channel customer, product and transactional information residing in more than 5 unsynchronized internal databases, this retailer struggled to understand its customer base through in-house efforts at segmentation, profiling and model creation. Sourcing information and analysis services from multiple third-party vendors allowed this retailer to maintain control over proprietary customer information while enhancing their knowledge of customers.

Current Marketplace

Other marketing service providers (MSP) in this market-landscape include Alliance Data, Ansira, Epsilon, Harte Hanks, Merkle, Precision Dialogue, an RR Donnelly Co., Rapp, Targetbase,  Valassis Communications, Inc., and digital agencies such as Digitas LBi, OlgilvyOne, SapientNitro, RazorFish and Wunderman among others. In today’s highly competitive global economy, knowledge of consumer and business behavior, socioeconomic, lifestyle and/or demographic information can be transformed through information analysis into actionable insight. It is this insight that provides key decision-making support to companies that seek to enhance profitability and/or gain a competitive business advantage.

©2008-2016 Hypatia Research Group. All Rights Reserved. | “Capture, Analysis and Utilization of Customer Information (Part 3) is an excerpt from“Decision Science: Competitive Advantage.” No part of this research study may be repurposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management.

Capture, Analysis and Utilization of Customer Information (Part 2)

Customer Analytics: Competitive Advantage or Necessary to Compete? Wal-Mart, American Express, Cocoa-Cola, Staples, Best Buy, Harrah’s Entertainment, Proctor & Gamble, Toyota, Hilton International. AOL, IBM, and Oracle are among numerous blue-chip companies that believe leveraging business and consumer data is necessary to compete in today’s economy. What used to provide a ‘secret sauce’ or competitive advantage to companies savvy enough to exploit the value of customer data within their own proprietary databases, has now become a rather lucrative service business for vendors able to provide these key components:  Data Enhancement [Demographic, Lifecycle, Behavioral, Transactional, etc.…]  Customer Scoring / Cluster Analysis  Prepackaged Models [Ex. Customer Retention, Propensity, Credit Risk]  Web-based Subscription to Analytical Database [by Industry or Product-Category]  Custom Information Analytics Services  Syndicated & Custom Market Research  Customer Data Integration, Data Quality/Hygiene & Infrastructure Services  Database Marketing Services: Design, Production, Fulfillment  Integrated Digital Marketing Services Certain trends have emerged within the last few years. Approximately 50% of companies surveyed prefer to create a an internal center of excellence comprised of statisticians, analysts and database marketing experts that provide Decision Analytics services across the organization. These companies use information service vendors for tactical services such as list enhancement, data hygiene and/or prospecting. Other organizations, preferring to focus on critical core competencies such as sourcing and producing products, tend to outsource most of the above capabilities by partnering with a full-service Marketing & Information Services provider [MSP]. The benefit of this approach is to gain key expertise in multiple disciplines without incurring the overhead and maintenance of hiring employees internally. This flexible approach is especially attractive to companies that provide seasonal products or services. Expertise is easily sourced and available per project, per season, or on an annual service basis. Customer-centric organizations that strive to deliver anything, anytime, anywhere to their own customers, now demand this same granularity and knowledge from information and decision analytics vendors that service them. Sources of Business Information By virtue of federal tax and state tax laws and financial reporting regulations, business or professional license application and vehicle registrations, numerous public and proprietary data marts capture information on businesses in the United States. Moreover, credit history, incorporation documents, business transactions between partners, suppliers and customers is both taxable and, thus, traceable. Many of the information analysis and services providers also rely on subscriptions to professional and industry-specific publications, online business purchases (e.g., office furniture or computers purchased on corporate accounts), legal filings or complaints to reporting agencies.

Figure 1: Information Services & Decision Analytics: Supply & Demand Chain. ©2016-2017 Hypatia Research Group. All Rights Reserved.

Business to business industries such as telecommunications, software, manufacturing, professional services (law, accounting and advertising agencies), retail office suppliers, financial services and insurance rely on this type of data to ensure company contact records are up to date, companies are credit-worthy, and that service and transaction histories are accurate. Typically, B2B information analysis services are utilized by organizations that seek to optimize their investments in business development and marketing initiatives. Sources of Consumer Information Similar to business information, consumer information is sourced through multiple channels, consumer touch-points, proprietary and public information. Moreover, consumers are very aware that industry is tracking them at a granular level – by brand preference, warranty card registrations, product and service transactions, online behavior, demographic information and lifestyle stage. Figure 1 illustrates the most common avenues used to capture information. In fact, customers expect that information gathered will be used to personalize the next interaction or communication they receive from businesses from whom they regularly purchase. Figure 1 illustrates the nature of demand and supply creation by providing an overview of how consumer information is captured, managed, analyzed and utilized by various information service providers and purchasers of consumer information. ©2008-2016 Hypatia Research Group. All Rights Reserved. | “Capture, Analysis and Utilization of Customer Information (Part 2) is an excerpt from“Decision Science: Competitive Advantage.” No part of this research study may be repurposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management.

Cracking the Code: Capture, Analysis and Utilization of Customer Information

Information is the currency that companies have used for competitive advantage in business since the earliest beginnings of barter negotiations and commercial commerce. Success in barter commerce often depended on knowledge of sources of food, labor or materials that could be exchanged. In today’s highly competitive global economy, knowledge of consumer and business behavior, socio-economic, lifestyle and/or demographic information, can be transformed through information analysis into actionable insight. It is this insight that provides key decision-making support to companies that seek to enhance profitability and/or gain a competitive business advantage.

Figure 1: Common Sources of Consumer Information. ©2008-2016 Hypatia Research Group.

In most organizations, customer information resides in multiple data marts, is utilized by multiple departments and is captured through multiple channels. Across numerous industries inclusive of both B2C and B2B models, customer data is analyzed and applied primarily for operational and/or strategic decision support.

In short, it is all about revenues and customers.

Visibility and Usability Pose Challenges
Previous quantitative research performed by Hypatia revealed that use of timely, complete and accurate information leads to improved customer service levels, reduced operational costs, increased revenues and higher customer satisfaction and retention rates. In short, it’s all about revenues and customers – market share growth and enhanced retention rates. In fact, use of marketing science and information analysis services has moved beyond a competitive advantage for companies that seek to grow aggressively. It is now necessary to stay in the game. Leading companies consistently focus on retaining customers and growing revenues through the use of customer data for the following business functions:

 Customer service and support: Operational (64%)
 Corporate planning: Strategic (56%)
 Product design: Strategic (48%)
 Business development / sales: Operational (36%)
 Marketing: Operational (20%)

Gaining customer visibility across all channels, trading partners, distributors, suppliers, end users and stakeholders with the goal of gleaning customer insight is a top priority for organizations. In B2C industries such as telecom, retail and financial services, companies struggle to understand and respond to their best customers within a multi-channel environment. The leveraging of customer information requires visibility across purchasing channels, products and customer value metrics as well as demographic information, transactional history and lifestyle stages.

In today’s highly competitive global economy, knowledge of consumer and business behavior, socioeconomic, lifestyle and/or demographic information can be transformed through information analysis (known as decision analytics, marketing science or customer analytics in North America) into actionable insight. It is this insight that provides key decision-making support to companies that seek to enhance profitability and/or gain a competitive business advantage.

©2008-2016 Hypatia Research Group. | “Decision Science: Competitive Advantage.” All rights reserved. No part of this research study may be repurposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management.

Hypatia Research Group Publishes

Enterprise Governance, Risk & Compliance Solutions: Risk and Rewards

2016-2017 Galaxy^TM Vendor Evaluations

LEXINGTON, Mass. – Sept. 13, 2016 — Industry analyst and market research firm Hypatia Research Group announces publication of a new primary research study entitled “Enterprise Governance, Risk & Compliance Solutions: Risk and Rewards with 2016-2017 GalaxyTM Vendor Evaluations“. Along with the trademarked Hypatia’s GalaxyTM evaluation rankings of 20 vendors that offer enterprise-level (GRC) or risk management (ERM) software solutions, this study provides end-user organizations with an analysis of why companies invest in this software, what tangible benefits are possible, and what metrics can be used to measure the effectiveness or ROI of these initiatives.

This 70 page study with 30 figures and 5 case studies provides companies with actionable insight that may use in compiling a vendor short list, request for qualifications and best practice terms of engagement with software vendors and providers of services.

“Uncertainty creates challenges” states the report’s co-author Senior Analyst, Howard Baldwin, “and while most business risk is external, not internal, it’s important to note that enterprises derive some risk from the actions of employees or partners such as third-party suppliers and partners. Theoretically, with the proper controls, risk can be ameliorated.”

Co-Author Leslie Ament, Chief Research Officer and SVP added “Our assessment is that even the letters in the abbreviation GRC are not created equal. The concepts may have been equivalent at one time, but today, risk is beginning to overshadow governance and compliance.”

Research Approach
Hypatia Research surveyed more than 2000 global practitioners and executives directly involved with governance, risk, compliance and security functions at their organizations. Only the 510 respondents that actually utilize, recommend, influence, hold budget or veto power over the purchase of this software category were utilized in our analysis of how, why or when organizations:

• Invest in GRC and ERM software solutions—and how much is budgeted through 2020?
• Measure productivity and effectiveness of these initiatives and how often?
• Seek analytical functionality and features to mitigate impending risk?
• Prioritize specific initiatives against software selection criteria?
• Approach selection of enterprise platforms versus modules versus point solutions versus multiple options?
• Short-list and ultimately select certain vendors or management consulting firms over others.

Global Survey Respondent Profiles
Functions: primarily in accounting, audit, compliance, corporate strategy, customer service, data governance, finance, fraud, legal, operations, procurement and supply chain, IT governance, risk, compliance and security, and business intelligence analysts completed our survey. Company size encompassed: large enterprise with revenues greater than $2b (48.4%), mid-market (26.8%) and small enterprises with less than $100m in revenues (24.8%). Roles included:

• C-Level & EVP 26.5%
• Director/Manager 13.8%
• Supervisor / Team Leader 17.8%
• Team Member 36.7%

Geographic breakdown: (44.4%) EMEA, (33%) North America, (21.8%) Asia Pacific and (0.9%) South America. Industry breakouts are: Retail/CPG (21.4%), consumer good & electronics (12.6%), financial services (12.3%) business services (10.1%), and manufacturing (9%) comprised the largest industry sectors representation followed by hospitality, travel and leisure (7.6%).

About
Industry analyst and market research firm Hypatia Research Group delivers high impact market intelligence, industry benchmarking, best practice, maturity model and vendor selection research for how businesses use software technology, professional services and management consulting providers to capture, manage, analyze and apply customer and market intelligence to enhance corporate performance and to accelerate growth. Coverage includes: Customer Engagement (CRM), Business Intelligence, Advanced Analytics, Big Data Insights, Customer Analytics, Social Media, Text Analytics, Digital Marketing, Information Management, Customer Data Management/Data Quality and GRC. Since 2001, clients have relied on Hypatia for industry insight, expertise and independent market research for guidance in assessing various technology and service options.

The report is available now at http://hypatiaresearch.com/product/enterprise-risk-manage…. For advisory, licensing or further analysis on this topic by company size, industry, job function or geography, please contact Research@HypatiaResearch.com or call 781-862-5106.

“Enterprise Governance, Risk & Compliance Solutions: Risk and Rewards” ©2016-2017 Hypatia Research Group, LLC. All rights reserved. No part of this research study may be repurposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management.

Hypatia Research Group: 10 Years Judging CRM Market Leaders Awards (Part Two)

This is the 10th year Hypatia Research Group has served as judges for these awards for various categories including CRM, Business Intelligence, Digital Marketing and Management Consultancies.

Consultancies by Leonard Klie

THE LEADERS

Ernst & Young can still be described as the new kid on the CRM consulting block, but its position can’t be denied. The firm, which made its debut on the leaderboard last year, scored an industry-leading 4.0 in company direction this year. “E&Y has made significant investment and inroads in the customer advisory practice area in the last few years, bringing it up to par with consultancies that have been in this space longer,” says Leslie Ament, senior vice president and principal analyst at Hypatia Research Group.

With its acquisition of Bluewolf earlier this year, IBM Global Business Services took an already solid business and elevated it to the next level. IBM also rode an industry-leading score of 4.2 in ability to execute and a 3.9 in company direction to the leaderboard this year. “Cross-pollination between IBM’s ExperienceOne design-thinking approach and Global Business Services is a significant change in how it works with clients, and a highly positive one at that,” Ament says.

One to Watch

Deloitte, which bounces on and off the leaderboard from year to year, this year finishes as a One to Watch based on its 3.9 score in ability to execute and a respectable 3.7 score in company direction. “Their approach to hiring consultants who are triple threats—with industry, domain, and functional expertise—is valued by their clients,” Ament says.

Digital Marketing – By Sam Del Rowe

IBM received strong marks in depth of functionality and company direction, with scores of 4.1 and 4.0, respectively. According to Leslie Ament, senior vice president of research and principal analyst at Hypatia Research Group, IBM is not always the cheapest choice, but it has “acquired quite a great portfolio of digital marketing solutions…such as Coremetrics, Unica, Silverpop, [and] Tealeaf.” She goes on to say that the company has combined these solutions “with consulting from their Interactive Experience agency,” which “works closely with Global Business Services, the consulting arm of IBM.” She says that despite a high cost, IBM has “a lot to offer companies.”

THE WINNER

Salesforce.com is the winner in this category for the second year in a row, earning high scores of 4.3 and 4.0 in company direction and customer satisfaction, as well as a 3.9 in depth of functionality and a 3.5 in cost. According to Ament, “Salesforce has really grown over the years” and has “done a really great job of growing their footprint and expanding their offerings as their customers demand it.” She notes that the company does “a really good job of listening to their customers, creating visually appealing and interactive dashboards and easily configurable workflows, and they also deliver on a brand promise that includes social responsibility, which is appealing to a lot of people.”

Business Intelligence Solutions By Sam Del Rowe

Hypatia Research Group’s Coverage Areas

THE LEADERS

After receiving a 4.2 in depth of functionality last year, Oracle had another strong showing in that area, earning a 4.1. However, the company once again struggled in terms of price, scoring a 2.6 in five-year cost. The company earned a 3.2 in company direction—a dip from last year’s 3.9—and a 3.5 in customer satisfaction. Leslie Ament, senior vice president of research and principal analyst at Hypatia Research Group, says that “for a while, Oracle was doing really well with their analytics layer, and they do tend to integrate that layer into just about every solution from CRM to their business suite and so forth.” However, she notes that “costs are higher due to the professional services required to deploy…and they don’t offer as much flexibility or choices as an IBM or SAS.”

THE WINNER

After an eight-year streak, IBM was knocked out of the winner’s spot last year, but it reclaims that position this time around. The company posted strong scores across the board, earning a 4.6 in depth of functionality, a 4.1 in company direction, a 4.2 in customer satisfaction, and a 3.7 in cost.  Ament noted that the company’s acquisitions of Cognos, Netezza, Star Analytics, and SPSS “have been well integrated, so that end users can actually move seamlessly through a business intelligence or advanced analytics solution based on the configurations chosen.”

No part of this research study may be re-purposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management. Permission to link to this research must be requested in writing. For information on licensing, reprint or purchase of research, please contact Research@HypatiaResearch.com.

Hypatia Research Group: 10 Years Judging CRM Market Leaders Awards (Part One)

This is the 10th year Hypatia Research Group has served as judges for these awards for various categories including CRM, Business Intelligence, Digital Marketing and Management Consultancies.

Enterprise CRM Suites By Oren Smilansky

THE MARKET

Three major trends are shaping the large enterprise CRM suite market, according to Leslie Ament, senior vice president and chief research officer of the Hypatia Research Group. First, a greater emphasis on analytics means more intuitive and visually appealing dashboards. This has translated “not necessarily [into] an increase in insights, but definitely [into] an increase in the ability to visualize and play with data in a way that’s easily consumable,” Ament says.

Second, workflow configurations have been simplified so that employees can interact with customers more consistently and provide them with similar experiences across the board.

Third, result-oriented outcomes such as commerce and conversion are receiving a greater focus, Ament says. Salesforce.com, for instance, recently acquired Demandware for $2.8 billion, helping it catch up with IBM, SAP, and Oracle, which have also invested in this area.

And all three of these trends are driven by the desire to reduce friction in a customer’s journey.”

THE LEADERS

Microsoft has been bumped from the top, but it posted the highest score for cost (4.1) and remains strongly functional. “Microsoft Dynamics CRM now provides customers with a fully integrated (converged) suite of products to enhance customer engagement via multiple touch points and to do so with enterprise-wide intelligence supported by [its] Business Analytics platform,” Ament says via email.

SAP, like Oracle, earned points for the range of its products’ functionality (4.1), but it also struggles with cost and customer satisfaction (a 3.3 rating in the latter).  Ament says the vendor’s customer engagement and commerce solutions have “feature-rich functionality for sales, service, and marketing that are designed for omnichannel customer engagement journeys with a bias towards results-oriented outcomes such as commerce.”

SugarCRM returns to the leaderboard, thanks to high scores for cost (4.0) and functionality (3.8).  Ament notes that SugarCRM has received a big boost from its partnership with IBM, adding that “SugarCRM is positioned as part of IBM PureSystems Centre offerings and as aligning with IBM ExperienceOne/Smarter Commerce, IBM Collaboration Solutions, IBM Analytics, and IBM Infrastructure.”

THE WINNER

Salesforce.com reclaims the title this year, after falling behind Microsoft in 2015. One reason: The company continues to rate highest overall in depth of functionality (4.4). “Salesforce customers are vocal, responsive, and loyal to its brand promise and delivery on social responsibility, highly graphical user interface with intuitive dashboard, and workflow visualization and ease of use,” Ament says. “The company listens to customer demand and offers a robust set of features and functionality with various pricing options.”

Mid-Market CRM By Oren Smilansky

THE MARKET

When it comes to CRM suites, companies in the midmarket are at a slight disadvantage compared to the heavyweights at the enterprise level, observes Leslie Ament, senior vice president and principal analyst at Hypatia Research Group. “When a vendor packages a midmarket solution, typically the features and functionality are less robust, and the price isn’t all that much better,” she points out. Companies wishing to grow and empower their sales, marketing, and customer service teams would be well advised to do their “due diligence” and also consider factors such as their industry and customer base to narrow down their options, Ament advises.

THE LEADERS

Bpm’online makes it onto the leaderboard again this year, with impressive scores all around. It did particularly well in the cost category, where it earned its highest mark (4.3).  Ament points out that though BPMonline started out as a vendor for small and medium-size businesses (SMBs), it is “moving up the food chain into the midmarket, and I wouldn’t be surprised if, a few years down the road, they move into the enterprise space.”

Microsoft posted impressive marks for both cost (4.0) and functionality (3.9), but this wasn’t quite enough to help it keep the title it snatched from Salesforce.com last year. “Despite the departure of Robert Stutz, former Microsoft corporate vice president and head of Dynamics CRM, the company’s product roadmap for Dynamics looks strong under new leadership, Ament notes; Jujhar Singh was recently appointed general manager of Microsoft Dynamics CRM.”

THE WINNER

Salesforce.com reclaims the top spot from Microsoft this year.  Ament points out that since Salesforce.com offers its services through a subscription model, it’s easier for midsize businesses to select applications “a la carte. If you want ERP from a Salesforce.com partner, you pay for what you want—you don’t have to have it in your license.”

One to WatchNetSuite is this year’s One to Watch, having earned its highest marks for cost (3.8). The vendor has “an integrated back-end ERP/front-end CRM, with all the bells and whistles, built on a single data repository, so [customers] get a 360-view of the customer throughout all of the functionality, whether it’s front office or back office,” Ament says. (Note: Oracle today [July 28, 2016] announced its intention to acquire NetSuite for $9.3 billion.)

SMB CRM – By Sam Del Rowe

One to Watch-Zoho slipped from the leaderboard this year, receiving low marks in company direction and customer satisfaction. Nevertheless,  Leslie Ament, senior vice president of research and principal analyst at Hypatia Research Group, says that Zoho “allows small-business users to select and choose exactly the functionality they need for the exact number of users [with its subscription model]” and adds that “businesses can accomplish a lot on Zoho, and the cost of ownership is low.”

No part of this research study may be re-purposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management. Permission to link to this research must be requested in writing. For information on licensing, reprint or purchase of research, please contact Research@HypatiaResearch.com.

Co-opetition Benefits SMB and Mid-Sized Customers: Zoho Expense Integrates with QuickBooks Online

As an industry analyst, primary market researcher, management consultant and former CMO, I’ve been covering the CRM, Customer Intelligence and Customer Engagement software and services market for more than 20 years now. Moreover, I’ve implemented and performed business requirements scoping of numerous customer-facing software applications as well as serving as a judge for the CRM Market Leader Awards for a decade. Analysis reveals that co-opetition benefits SMB and mid-sized customers when the integration is the result of customer demand. Moreover, software vendors benefit through customer retention, loyalty and share of wallet when business requirements are met either though partners or as in this case, co-opetition.

Our research shows that organizations of all sizes continued investment in various software applications and delivery models—cloud, on premise, or hybrid—the proliferation of various information sources expands. In our end-user based studies such as: “Next-Generation CRM: All about Achieving Business Process Excellence”, “Delivering Big Data Insights: Why Choose between Accuracy, Agility or Speed?”, and “Convergence of Enterprise Governance, Risk and Compliance”, we consistently find that top performing organizations (as benchmarked against their peers), use more information sources for financial reporting, analysis and for passing annual audits.

Figure 1: Multiple Information Sources Utilized for Operational Reporting

Source: ©2016 Hypatia Research Group. All rights reserved.

Not surprisingly, global businesses use more than eight information sources when analyzing enterprise data, and rely on this information for a variety of business purposes—finance, sales, operations and marketing among them. Several drivers for this change include:

• Employee / Customer expectations for a seamless, frictionless interaction;
• Ubiquitous use of smart phones and other mobile devices;
• Advances in customer data integration techniques and proliferation of open application program interfaces (APIs);
• Enhancements to dashboards and the ability to configure them by role, function or industry;
• Redesign of workflows, approval processes and use of business process automation to configure and/or automate repeatable processes;
• Realization that financial intelligence doesn’t reside only in an Enterprise Resource Management or financial accounting application: It lives throughout & beyond the enterprise

Our assessment of the businesses benefits this collaboration between Zoho and QuickBooks online provides to end-users include:

• Reduction in data errors: Expense receipts such as travel and entertainment scanned as pictures from phones or recorded via data entry in Zoho minimizes key in errors and employee time since the expenses are automatically registered as bills in QuickBooks Online
• All corporate card charges entered automatically: All expenses charged to corporate cards are automatically entered. Employees just select a category and the expense is populated by category for manager’s approval. Managers can then approve or reject expenses.
• Track reimbursable versus billable amounts: Users can easily record money advanced to employees, employees’ recorded expenses, and outstanding amounts that need to be reimbursed.
• Re-bill customers – Re-billable expenses can be tracked separately. Customers can be invoiced for those expenses via QuickBooks Online.
• Business workflow flexibility, configurability and control – Customers have the ability to configure their preferred business processes for how expenses recorded in Zoho Expense show up in QuickBooks Online.
• Information integration flows both ways: from Zoho Expense into QuickBooks Online and from QB Online into Zoho Expense via mapping of chart of accounts.
• Availability: The integration of Zoho Expense and QuickBooks Online is free of charge and effective immediately for all U.S. users. The integration covers the Zoho Expense Free and Professional plans as well as the QuickBooks Online Essentials and Plus plans. Users need subscriptions to both Zoho Expense and QuickBooks Online.

The Fine Print: What You Should Know

When using Zoho Expense with QB Online, the base currency does need to be in US dollars for now, (2016) however, expenses can be entered and will be supported in any currency within the United States. Zoho plans for this capability to expand to other countries in future roadmaps based upon customer demand.

Zoho Books does compete with QuickBooks, however this integration is the result of customer demand. Our assessment is that co-opetition and collaboration that benefits customers will likely result in higher rates of customer retention, satisfaction and ultimately benefit the software provider’s bottom line as well.

Disclaimer—Hypatia Research Group has used both Zoho CRM and QuickBooks for business operations, however, we do not currently use Zoho Expense or plan to integrate with QB this year.

“Zoho Expense Integrates with QuickBooks Online: Co-opetition Benefits SMB and Mid-Sized Customers” ©2016 Hypatia Research Group. All rights reserved. No part of this research study may be re-purposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management. Permission to link to this research must be requested in writing. For information on licensing, reprint or purchase of research, please contact Research@HypatiaResearch.com.

The Imperative of Omni-channel Engagement with Precision Marketing

Across all industries and company size, growing revenues is a top priority for organizations. This holds true for all business models: business to business (B2B), business to consumer (B2C), not-for-profit, and for those that perform the “marketing two-step” (B2B2C). Moreover, top-line growth is not the only pressure faced. Marketers also seek to do more with less. They are pressured to identify and invest in their most valuable or profitable customers while optimizing both budgets and resources applied.

In short, marketers must find ways to communicate, interact and provide service to customers via a “blended omni-channel journey” based on value metrics. Ideally, highly profitable customers would receive more attention, service and resources than less profitable ones. Customer retention and acquisition rates among preferred segments or profiles would increase, as well as market share among most valuable customers.

Key Business Value Findings
HRG surveyed and interviewed 500+ companies to gain an understanding of how top performing  organizations select, deploy and measure Omni-channel engagement with precision marketing techniques. Our research demonstrates that effective precision marketing techniques leads to improved customer retention rates, higher revenues from up-sell / cross-sell campaigns, and enhanced levels of customer satisfaction. Enterprises that deploy precision marketing enjoy a greater share of each customer’s wallet. More than fifty percent of top performers have customers who purchase multiple products or services from them annually—twice the rate of other benchmarked groups.

Overall, top performers that hold higher competencies in advanced precision marketing capabilities also enjoy a higher return on investment in key performance metrics. Case in point, 51% of these top performers, (in contrast to only 10% of other bench-marked groups), attained customer satisfaction levels in excess of 70%.

Selection Criteria
Vendors and service providers who are able offer solutions that are financially attractive as well as easy to use for line of business (LOB) employees in marketing, sales/business development or call center will be in high demand. Overwhelmingly, survey respondents cited cost and ease of use as top priority criteria for selection of Omni-channel engagement with precision marketing tools and services.

Hypatia’s Analysis

While enabling technologies and service providers facilitate the planning and execution of Omni-channel (both inbound and outbound) engagement, enterprises are challenged by lack of internal expertise in precision marketing techniques. The majority of survey respondents revealed they lack the ability to establish and measure meaningful performance metrics. Reminiscent of the proverbial “chicken and egg” scenario, organizations struggle to secure the budget and resources necessary to improve precision marketing techniques, but lack the ability to build a business case and gain buy-in through the establishment of measurement of key performance indicators (KPI’s), metrics or goals.

All respondents confirmed they are addressing challenges from a technology, process, performance and organizational perspective. They realize that no one “silver bullet” exists, but that a more holistic, process-driven approach to customer interactions, comprised of “closed-loop marketing techniques” is necessary to drive continuous performance improvements in precision marketing.

Further analysis is available in our latest Galaxy study: How Customer Analytics and Insights Enrich Customer Journey Design: GalaxyTM Vendor Evaluations.  ©2015-2016 Hypatia Research Group. All rights reserved. No part of this research study may be re-purposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management. Permission to link to this research must be requested in writing. For advisory services or assistance with vendor selection, requirements gathering or business process mapping, contact Research@HypatiaResearch.com. For information on licensing, reprint or purchase of research, please contact Research@HypatiaResearch.com.

Success Strategies in Customer Engagement and Journey Design: Show Don’t Just Talk About It!

Recently I presented our analysis (based on primary voice of the customer research) on a webinar hosted by a a software provider in the Customer Relationship Management category.  More than  3,000 global organizations were surveyed and only those 1000 respondents with direct accountability for selection or use of software and services for customer engagement, sales, support or marketing functions were utilized for this research. For those of you who missed it, a replay should be available here:

Why do organizations seek to design effective multi-channel customer engagement? Customers demand it. Technology has enabled consumers to use multiple channels of interaction at the time, place, and manner of their preference. Our research analysis revealed that that 70% of global organizations now offer customers the option of interacting independently through various channels due to customer demand, preference and expectation of anywhere, anytime, and any channel of support.

However, the proverbial Achilles Heel in offering an Omni- or Multi-channel customer engagement is when companies continue to offer this via a siloed approach rather than as a “blended” experience. As seen in the chart, less than 12% of businesses reported being able to interact with prospects and customers via a “blended” approach. Our recommendation: “Providing customers a truly seamless, ‘blended’ experience should be an organizational goal for all customer-centric companies.”

Select Market Pressures:

• In order to defend or retain market share and to potentially increase top line growth and cost take-outs, businesses are pressured to comply with whatever their customers desire;
• Customer expectations for a seamless, frictionless interaction regardless of the channel they choose;
  High levels of fragmentation exist among business perception and understanding of how to improve customer loyalty in a multi-channel environment while reducing operational costs;
• Rapid adoption of mobile phones, tablets and devices.

Select Challenges:

• Organizations tend to create customer facing business processes from the corporate optimization perspective: inside-out (resource focused);
• Shifting a corporate culture from the inside-out (resource optimization) to the outside-in (customer-centric) requires changing a cultural mindset long defined by major business objectives (MBO) aligned with functions, roles, teams, and/or departments;
• Illustrated in our research analysis:
  • 16.7% cited transformation of a siloed organizational business structure and cultural mindset as priority one;
  • 11.1% cited determination of how to organize internally cited as priority one.

Why did I start this research blog with “Success Strategies in Customer Engagement and Journey Design: Show Don’t Just Talk About It”? Our host for this webinar designed their purpose-built, process driven CRM solution to engage with prospect and customers via a blended approach throughout their journey.  Not only did the hosting company present these capabilities during product demonstrations, they walked the walk* by using their own software to engage more than 600 registrants for this webinar; fully half of them attended online. Kudos to the management, product strategy and marketing team at BPMOnline for developing a solution worthy of short-listing for consideration.

Further analysis is available in our latest Galaxy study: How Customer Analytics and Insights Enrich Customer Journey Design: GalaxyTM Vendor Evaluations.  ©2015-2016 Hypatia Research Group. All rights reserved. No part of this research study may be re-purposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management. Permission to link to this research must be requested in writing. For advisory services or assistance with vendor selection, requirements gathering or business process mapping, contact Research@HypatiaResearch.com. For information on licensing, reprint or purchase of research, please contact ZGR@HypatiaResearch.com

*At Arthur D. Little Management consulting, we called this “eating your own dogfood”.

Next Generation CRM for Enhanced Customer Journeys: from Leads to Loyalty

Bpm’online has invited Leslie Ament, SVP Research & Principal Analyst at Hypatia Research Group, to share her expertise on how next gen CRM technology can help stakeholders transform their businesses into truly customer-centric enterprise thanks to advanced customer journey management.

During the webinar, Leslie Ament will talk about why tech-savvy, modern consumers are no longer impressed with the current personalization level. Today, enhanced customer journeys should start with a deep understanding of the customer behavior and preferences, which is a backbone of enhanced customer experience.

All investment in customer engagement solutions should reduce the customer’s effort, be seamless, and encourage interaction via all preferred channels while providing stakeholders analysis and multi-channel visibility into customer preferences, behaviors and purchases.

Session: Next Generation CRM for Enhanced Customer Journeys: from Leads to Loyalty
When: February 23, 2016, 2:00 p.m. – 3:00 p.m.

Register and learn how top performers use customer analysis and insight:

• Improve enterprise level operational business processes;
• Guide marketers, sales professionals and contact center agents on best practices for customer engagement and/or offer management;
• Redesign workflows and use of business process automation to configure and/or automate repeatable processes;
• Realize that customer engagement intelligence doesn’t reside only in a CRM application: it lives throughout and beyond the enterprise;
• Transform into a truly anticipatory customer-centric enterprise by replacing inside-out business processes (resource optimization) with purpose-built business processes designed from the outside-in (customer focused).

Don’t miss out on learning how next generation CRM can be the right tool to transform business into a customer-centric enterprise providing a seamless consistent experience while your customer makes a journey from a lead to loyalty.

Third-Party Power: Rise of the B2B App Store

How Customer Analytics and Insights Enrich Customer Journey Design

Why do organizations seek to design effective multi-channel customer journeys? Customers demand it. Technology has enabled consumers to use multiple channels to interact at the time, place, and manner of their preference. In order to defend or retain market share and to potentially increase top line growth and cost reductions, businesses are compelled to respond to customer demands.

Leveraging multi-channel customer analytics and insights to enrich customer journey design has the potential to:

• Optimize omni-channel[2] customer interactions and engagement;
• Enhance employee engagement via “guided intelligence^TM “(e.g. a version of next best offer);
• Improve the customers’ purchase (commerce) experience;
• Segment, profile, predict and prescribe best practices for optimal types of customer engagement;
• Mitigate identity theft, fraud & risk, (See “Customer Identity Authentication: Best Practices in Avoiding Identity Theft, Fraud & Risk.”);
• Improve operational business processes through a customer-centric lens.

Customer Analytics and Insights

Insights gleaned from business intelligence reports and dashboards are worthwhile for decision support, early warning signals or identifying trends that warrant further investigation before taking action. However, advances in analytical technology (cognitive and machine learning) for example—combined with the proliferation of customer engagement channels has created the potential to fuel omni-channel customer journey design.

At present, there are five main types of advanced analytics:

• Descriptive-Identifies customer segments using metrics such as frequency, lifetime value, or behavior, in order to create propensity models.
• Diagnostic-Explores causal relationships like root cause analysis to better understand why customers purchase or pass on offers.
• Predictive-Uses customers’ past behavior with seasonal or lifestyle triggers to model and predict future behavior.
• Prescriptive-Optimizes knowledge from aforementioned three advanced analysis techniques via synthesis, and “what if?” or Monte Carlo simulations to suggest best outcomes in the form of guidance.
• Cognitive-Bridges the gap among machine learning (automated self-learning from experience and the ability to identify associations), the potential of Big Data and practical decision-making in real time with confidence scores that reflect the accuracy of responses.[3]

It should come as no surprise that enterprise-level omni-channel customer analytics, similar to Big Data Analytics (BDA), encompass numerous information sources, multiple technologies (software and hardware), nimble business processes and specialized human expertise in advanced analytics. Not surprisingly, this Hypatia Research Group study found that global organizations are successfully utilizing various analytical techniques in the form of these types of engagement. (See Figure 1)

Research Approach: How Customer Analytics and  Insights Enrich Customer Journey Design

Hypatia Research Group surveyed more than 1000 global executives directly involved with extrapolating and applying customer insights with goals such as growth acceleration, service and support enhancement, customer acquisition and retention improvements.

Input from 566 respondents that actually use, recommend, influence, hold budget or veto power over the purchase of enterprise customer analytics and insights, customer engagement and journey design process software were included in our analysis of how, why or when organizations:

• Invest in customer analytics and journey design software solutions—and how much is budgeted through 2018?
• Measure productivity and effectiveness of customer analytics and journey design initiatives and how often?
• Prioritize specific customer analytics and journey design initiatives against software selection criteria?
• Commit a percentage of company revenues to customer analytics and journey design program investment?
• Realize a return on investment (ROI)?
• Evaluate and ultimately select specific customer analytics and journey design vendors or consulting firms?

Further analysis is available in our latest Galaxy study: How Customer Analytics and Insights Enrich Customer Journey Design: GalaxyTM Vendor Evaluations.  ©2015-2016 Hypatia Research Group. All rights reserved. No part of this research study may be re-purposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management. Permission to link to this research must be requested in writing. For advisory services or assistance with vendor selection, requirements gathering or business process mapping, contact Research@HypatiaResearch.com. For information on licensing, reprint or purchase of research, please contactZGR@HypatiaResearch.com

[1] See “Delivering Big Data Analytics Insights: Why Choose Between Accuracy, Agility or Speed?”

[2] Omni-channel versus multi-channel: omni-channel is the use of all physical channels (offline) and digital channels (online) which offers a seamless, innovative and unified customer experience. Multi-channel is the use of three or more channels of engagement.

[3]  In the consumer world, pieces of cognitive analytics form the core of artificial personal assistants such as Apple’s Siri® voice recognition software and the Google Now service, as well as the backbone for the Xbox® video game system’s verbal command interface in Kinect®.

Perception: Customer Experience versus Customer Engagement

In 2015, more than 500 software companies consider themselves providers of “customer experience solutions. Fewer than 100 self-identify as providers of “customer engagement solutions”. Is there really a difference between the two and how does one know which will benefit the brand as well as consumers of the brand’s products or services? Which approach will reduce customer churn, enhance customer acquisition and retention and ultimately enable a brand to grow?

Our analysis illustrates that while vendors are keeping their options open as to whether they provide customer experience or customer engagement solutions, the majority of actual business users see a difference between the two. More importantly, customer engagement offerings are gaining traction because they are seen as a more tangible—and measurable.

Performance Metrics
While customer experience management is an important concept—one that emphasizes customer-centricity as an overall enterprise goal—customer engagement is where theory meets practice in terms of quantifiable business results. Critical considerations include:

•  How does one measure the overall customer experience with a brand?
•  Over what duration or time-frame? Which channels will be measured?
•  Do the key performance metrics correlate to actual changes in retention, acquisition, market-basket size, customer lifetime value, top-line or bottom-line results?
•  Are cost reductions and/or agent productivity part of the business benefits realized?
•  Do customer loyalty and satisfaction performance metrics directly correlate to top or bottom-line results, market share or customer value?

Figure 2: Perception: Customer Experience versus Customer Engagement

Research Approach

Hypatia Research Group surveyed more than 1000 global executives directly involved with extrapolating and applying customer insights with goals such as growth acceleration, service and support enhancement, customer acquisition and retention improvements.

Input from 566 respondents that actually use, recommend, influence, hold budget or veto power over the purchase of enterprise customer analytics, customer insights, customer engagement and journey design process software were included in our analysis of how, why or when organizations:

• Invest in customer analytics and journey design software solutions—and how much is budgeted through 2018?
• Measure productivity and effectiveness of customer analytics and journey design initiatives and how often?
• Prioritize specific customer analytics and journey design initiatives against software selection criteria?
• Commit a percentage of company revenues to customer analytics and journey design program investment?
• Realize a return on investment (ROI)?
• Evaluate and ultimately select specific customer analytics and journey design vendors or consulting firms?

Further analysis is available in our latest Galaxy study: How Customer Analytics & Insights Enrich Journey Design: GalaxyTM Vendor Evaluations.  ©2015-2016 Hypatia Research Group. All rights reserved. No part of this research study may be re-purposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management. Permission to link to this research must be requested in writing. For advisory services or assistance with vendor selection, requirements gathering or business process mapping, contact Research@HypatiaResearch.com. For information on licensing, reprint or purchase of research, please contactZGR@HypatiaResearch.com

Mattel, Inc. Builds Toys and Customer Journeys with Analytics

The Mattel family of companies (NASDAQ: MAT) is an American based multinational leader in the design, manufacture and marketing of toys and family products. Mattel’s portfolio of best-selling brands include Barbie®, Hot Wheels®, Monster High®, American Girl®, Thomas & Friends® and Fisher-Price® brands; Little People®, Power Wheels®, MEGA® Brands, and RoseArt®. Mattel’s companies employ approximately 31,000 people in 40 countries and territories and sell products in more than 150 nations. Worldwide headquarters are located in El Segundo, Calif.

Business Challenge

With multiple global brands that appeal to consumers at various life stages such as toddler (0-3 years old), four to five year old (4-5), six to seven year old (6-7), and eight or more (8+), combined with numerous types of toy products such as action figures, dolls, DVD’s, games and outdoor play, the company determined that providing a seamless, connected customer experience at a global scale would be the optimal way to stay in touch with their customers. To that end, Mattel embarked upon a massive transformation with digital marketing and listening to the voice of the customer at the center of its innovation. Technologically, the company was challenged by its global scale, multiple brands, products and diverse channels—indirect sales channels such as retail stores or catalogues in addition to direct to consumer marketing encompassing multichannel communications channels.

Vendor Selection

One of the key requirements in selecting a vendor was the ability to map, analyze, and engage with the customer journey across every channel and touchpoint. Only a handful of vendors offered all three capabilities.  Ultimately, Mattel selected Salesforce.com because it enabled everyone involved to work off of the same platform. Brands are no longer siloed which means individual journeys, aggregated journeys, and journeys by channels of engagement are visible to stakeholders. Along with Journey Builder, Mattel chose to implement Marketing Cloud.

To read more of Hypatia Research Group’s evaluation of Mattel’s business return on investment from Salesforce Marketing Cloud see:  How Customer Analytics & Insights Enrich Journey Design: GalaxyTM Vendor Evaluations.  ©2015-2016 Hypatia Research Group. All Rights Reserved. For information on licensing, reprint or purchase of research, please contact ZGR@HypatiaResearch.com

Hypatia Research Group Presents Complimentary Webinar “Best Practices in Customer Engagement and Loyalty” Hosted by CRMXchange

Research Reveals Customers Prefer ‘Blended’ Over ‘Siloed’ Multichannel Experience

Industry analyst and market research firm announces a webinar scheduled for Thursday October 29th entitled “Best Practices in Engagement and Loyalty” hosted by CRMXchange with support from Bright Pattern, InContact and SparkCentral.

Webinar:  Best Practices in Customer Engagement and Loyalty
When: Thursday October 29^th, 2:00 pm EDT
Registration Link: http://www.crmxchange.com/roundtable/engagement/oct2015.asp

Hypatia’s primary research finds that enterprises now interact with and support their customer in ways that are constantly becoming more varied and increasingly complex. Customers, already suffering from extreme information overload, are receiving more than 10X messages per hour than just five years ago. Getting and keeping them engaged now requires a team of professionals rather than just one very overworked marketing specialist as customers expect that brands will interact with them through ANY channel of preference with both historical and contextual awareness.

©2015-2016 Hypatia Research Group, LLC. All rights reserved.

According to Leslie Ament, “Our analysis shows that 70% of global organizations now offer customers the option of interacting independently through various channels due to customer demand, preference and expectation of anywhere, anytime, and any channel of support. However, the proverbial Achilles Heel in offering an Omni- or Multi-channel customer experience is when companies continue to offer this via a siloed approach rather than as a “blended” experience.  Providing customers a truly seamless, ‘blended’ experience should be an organizational goal for all customer-centric companies.”

REGISTER NOW to hear Leslie Ament, Senior Vice President, Research & Principal Analyst, Hypatia Research Group as she discusses best practices and trends in global multi-channel engagement that foster customer loyalty and enhance ROI.

Attendees will learn:

• How companies are increasing customer engagement through services and tools such as mobile, chat, SMS messaging, screen sharing, co-browsing, and video;
• The changing priorities and return on investment from responding to customers via social media;
• How to identify the best people and information resources to respond more quickly to customer inquiries;
• Why “guided intelligence” reduces customer effort while increasing agent productivity.

Hypatia Research Group surveyed more than 1000 global organizations and only respondents with direct accountability for selection or use of software and services for customer service & support functions were utilized for this primary research.

About Hypatia Research Group

Industry analyst and market research firm Hypatia Research Group delivers high impact market intelligence, industry benchmarking, best practice, and vendor selection research for how businesses use technology and service providers to capture, manage, analyze and apply customer and market intelligence to enhance performance and accelerate growth. Coverage includes: Customer Analytics, Advanced Analytics, Customer Intelligence, Customer Management (CRM), Social Media, Text Analytics, Digital Marketing, Information Management, Customer Data Management/Data Quality and GRC. Since 2001, clients have relied on Hypatia for industry insight, expertise and independent market research for guidance in assessing various technology and service options.

About CRMXchange

Founded in 1995, CRMXchange has long been recognized as a premiere destination on the Internet for the exchange of information and ideas on customer relationship management, sales, contact center, and telemarketing issues. Today, the site offers a wide variety of resources for CRM professionals. Through nearly a decade-long partnership with industry leaders and analysts, CRMXchange has developed unique insights into the kinds of business intelligence and professional development programs required for successful contact center operations. And as pioneers of the Internet, CRMXchange understands the profound role the Web can play in the all-important arena of peer-to-peer communication. Known by our audience as the “event site,” CRMXchange has gained a reputation as experts in the hosting and marketing of webcasts and other online events.

Contact:

E: Research@HypatiaResearch.com

O: 781-862-5106

Enterprise Customer Analytics Effectiveness: Key Factors to Consider

CRM analytics is often acknowledged as a type of business intelligence that most often provides historical reporting in the form of dashboards, operational reports, sales forecasts and/or account segmentation among others. While historical reporting, queries, and data visualization is highly useful in illustrating what has occurred and in certain instances can be used to perform “what if” planning scenarios, it is not based on advanced analytical techniques such as predictive modeling. In addition, CRM analytics is often based on customer information residing in a system or multiple CRM systems of record, thus, financial information and purchase history along with other relevant customer information may be lacking unless it is ported into a customer information hub or business intelligence application for analysis. (Click here for more on “Realizing the Downstream Benefits of Effective Customer Data Management”)

In contrast, customer analytics is often utilized for in-the-moment or near-real time decision support for marketing, merchandising, Ecommerce, customer service and support, and sales when analysis of multivariate dimensions are required. For example, multiple dimensions such as time-frame (duration), product/service purchase history, industry, company size, household income, education level, geography and purchase amount (market-basket), can be used to define certain performance metrics such as customer lifetime value or limits on customer acquisition costs. In addition, trade promotions, customer service guidance, fraud alerts, customer identity authentication, and affinity marketing along with cross-sell/up-sell offers are largely dependent on advanced analytical techniques. In short, customer analytics combined with appropriate algorithmic models, business process rules and workflows has the potential to enhance engagement by being contextually relevant, in the moment and in the channel of customer preference.

Customer Information Lives Throughout and Beyond the Enterprise

In today’s Omni-channel, customer-obsessed marketplace, businesses need to embrace the reality that customer information does not only reside in a CRM system–it lives throughout and beyond the enterprise.  The proliferation of customer interaction channels serve as a catalyst for investment in multi-channel software solutions. From mobile phones, tablets, computers, in store, catalogue, SMS, social networks, and online forums, customers are able to interact with businesses when they want, how they want and for any reason. Converting both unstructured (contextual) and structured (data) information into actionable insight and responding to customers according to their preferences with customized information is a challenge for most organizations. However, enabling technologies based upon advanced analytics combined with customer engagement solutions such as digital marketing, contact center, sales and/or Ecommerce solutions may provide support for overcoming this challenge.

Five Primary Types of Advanced Analytical Techniques

Through the lens of customer engagement, the practical applications of these five types of techniques should be viewed as:

• Descriptive-Who is the customer?
• Diagnostic-Why are they engaging with your brand?
• Predictive-What are they likely to want?
• Prescriptive-How best should your brand engagement with them?
• Cognitive-When the customer engages with your brand, your brand knows why, what they likely want, and how best to engage with them based on numerous previous experiences.

There are software vendors that offer solutions with templates and features that facilitate creating specific types of models such as customer retention for retail and telecommunications, or identity fraud for banking or medical claims management. Operationalizing analytics by embedding models within customer engagement workflows facilitates brand consistency and optimizes personalization through automation. Evaluate how, and if this might shorten time to value when implementing customer analytics, customer journey design and customer engagement programs. (See Galaxy Vendor Evaluations Chapter Three)

Evaluate how, and if this might shorten time to value when implementing customer analytics programs.

Summary

• Enterprise customer analytics differs most from CRM analytics in that five primary types of advanced analytical techniques are utilized in addition to business reporting such as historical, operational, sales forecasting, and/or account segmentation;
• Enterprise customer analytics is dependent on numerous information sources from multiple channels, legacy systems of record, devices, cloud, and streaming data–inclusive of interactional and transactional information as well as externally purchased third-party data;
• Expertise is advanced analytics combined with well-defined goals, an operationally executable plan, clear definitions for measurable performance metrics and cross functional resources able to execute on this plan are critical to success.

For business return on investment justification, case studies and a Checklist for Success  see our latest study:  “How Customer Analytics & Insights Enrich Journey Design Processes: Benchmarks, Best Practices & GalaxyTM Vendor Evaluations.” ©2015-2016 Hypatia Research Group. All rights reserved. No part of this research study may be re-purposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management. Permission to link to this research must be requested in writing. For advisory services or assistance with vendor selection, requirements gathering or business process mapping, contact Research@HypatiaResearch.com.

Research confirms that the ability to effectively map and engage with customers during multi-channel journeys is dependent on real-time analysis of numerous information sources

Industry analyst and market research firm Hypatia Research Group announces publication of a new primary research study entitled “How Customer Analytics & Insights Enrich Journey Design Processes: Galaxy^TM Vendor Evaluations“. This fifty page study with twenty-five figures provides end-user organizations with best practice benchmarking, vendor evaluations and an analysis of how, why, and when companies invest in Customer Analytics and Journey Design (CEA&JD) software, what tangible benefits are possible, and which metrics can be used to measure an organizational return on investment (ROI). In short, our research provides actionable insight that companies may use in compiling a vendor short list, request for qualifications and best practice terms of engagement with software vendors and providers of services.

In this age of digital engagement, interaction, and commerce, analysis of customers’ interactional and transactional behaviors with the goal of creating actionable business insights are essential in designing effective, frictionless multi-channel customer journeys. According to the report’s author, Leslie Ament, SVP and Principal Analyst, “Business intelligence and dashboards are great tools for serving up historical or near-real time guidance and trends, however, transforming massive amounts of customer information (structured and contextual) into actionable insights and utilizing this insight to engage with customers in the moment is THE challenge for organizations of all sizes, across all industries and within all geographies.

GalaxyTM Vendor Evaluations 2015-2016

Ament continued, “Our research demonstrates that enterprise-level Omni-channel customer analytics, similar to Big Data Analytics (BDA), encompass numerous information sources, multiple technologies (software and hardware), nimble business processes and specialized human expertise in advanced analytics.

Research Approach

Hypatia Research surveyed more than 1000 global practitioners and executives directly involved with creating customer insights, utilizing customer insights and applying customer insights to engage with customer in order to accelerate growth, provide service and support, retain customers, prevent customer migration and/or acquire customers.

Only the 566 respondents that actually utilize, recommend, influence, hold budget or veto power over the purchase of enterprise Customer Analytics, Customer Insights, Customer Engagement and Journey Design Process software were utilized in our analysis of how, why or when organizations:

• Invest in customer analytics & journey design software solutions—and how much is budgeted through 2018?
• Measure productivity and effectiveness of customer analytics & journey design initiatives and how often?
• Prioritize specific customer analytics & journey design initiatives against software selection criteria??
• Commit a percentage of company revenues to customer analytics & journey design program investment?
• Realize a return on investment (ROI)?
• Evaluate and ultimately select specific CEA&JD vendors or consulting firms?

 Evaluation Methodology

Our due diligence included a 1) vendor briefing, 2) product demonstration and 3) customer reference interviews. In certain cases, customer references were obtained without vendor involvement through our professional network.

Survey Respondent Profiles

Over 566 global respondents with functions primarily in merchandising, marketing, customer service and support, operations, business analysts and IT completed our survey. Company size encompassed: large enterprise with revenues greater than $2b (54%), mid-market (44.6%) and small enterprises with less than $100m in revenues (1.4%). Roles included:

• 42.1% C-Level / EVP
• 26.9% Director / Manager
• 18.7% GRC Supervisor / Team Lead

Geographic breakdown: (47%) North America, (33.9%) EMEA, (18.7%) Asia Pacific and (0.4%) South America. Industry breakouts are: Retail/CPG (22.3%) financial services (14.1%) manufacturing (11.7%) and consumer good & electronics (10.2%) comprised the largest industry sectors representation followed by telecommunications and media (7.4%).

About

Industry analyst and market research firm Hypatia Research Group delivers high impact market intelligence, industry benchmarking, best practice, maturity model and vendor selection research for how businesses use software technology, professional services and management consulting providers to capture, manage, analyze and apply customer and market intelligence to enhance corporate performance and to accelerate growth. Coverage includes: Customer Management (CRM), Business Intelligence, Advanced Analytics, Big Data Insights, Customer Analytics, Social Media, Text Analytics, Digital Marketing, Information Management, Customer Data Management/Data Quality and GRC. Since 2001, clients have relied on Hypatia for industry insight, expertise and independent market research for guidance in assessing various technology and service options.

For advisory, licensing or further analysis on this topic by company size, industry, job function or geography, please contact Research (at) HypatiaResearch (dot) com or call 781-862-5106

Customer Analytics: The Delta Between a Right Versus Left Brain Approach

Have you ever sat in a cross functional business meeting attended by line of business functions (sales, marketing, customer service, finance, and/or merchandising), members of the IT department AND business analysts, data scientists and data engineers–and desperately wished for a Star Trek type of universal translator*? Oh, and did I mention the discussion centered on scoping out business requirements for improving customer journey workflows with a goal of increasing revenues AND reducing customer effort that involve one or more of the following enabling software applications:

• Customer Engagement & Interaction;
• Customer Service & Support;
• Digital Marketing;
• Ecommerce & Merchandising;
• Finance; and/or
• Enterprise Resource Planning.

According to the theory of left-brain or right-brain dominance, the human brain consists of the right brain and the left brain. The shapes of these two parts are similar, but differences have been gradually found in their functions. The left brain is also referred to as the digital brain. It controls reading and writing, calculation, and logical thinking. The right brain is referred to as the analog brain. It controls three-dimensional sense, creativity, and artistic senses.

Whether by training, professional experience or simply genetics, many employees drawn into marketing are right brain dominant while those in IT/IS related functions are often left brain dominant. While most people use both sides of their brains everyday, how information is received, processed and articulated is often guided by dominance in one of these hemispheres. An exception to this are those highly trained in mathematics and music who tend to “parallel” process information using both sides of their brains. (Note: Parallel processors are not superior, we are just different.)

Why is all of this relevant to a discussion on business requirements gathering for selecting software, designing workflow processes and closed-loop metrics and milestones for assessing return on investment? With all of the current discourse on topics such as; digital transformation, moving to the cloud, listening to the “voice of the customer” and advice on how to become more “customer-centric” by using customer analytics to proactively anticipate customer desires, it is crucial that companies realize that definitions for customer analytics and key performance metrics are not always consistent across industries, functions or geographies.

For example most of us recognize that 2+2=4. However, when assessing campaign return on investment, the marketing function often uses a “campaign uplift” metric, typically defined as the difference in response rate between a segmented group and a randomized control group, thereby isolating the effect of a marketing campaign and measuring its effectiveness. In short, what is measured is the incremental effect of a campaign rather than the “lift“, which is defined as the overall response rate.

Customer analytics, generally defined as a process by which information (data and unstructured content) from customer behavior (both interactional and transactional), is used to support key business decisions through the use of market segmentation and advanced analytics. (Descriptive, diagnostic, predictive, prescriptive and cognitive analytics or computing. See Delivering Big Data Analytical Insights for more on this.)

Organizations utilize customer analytics in order to measure, analyze and make decisions regarding:

• Customer Lifetime Value
• Customer Loyalty
• Up-sell, Cross-sell & Affinity Opportunities
• Customer Retention Rates
• Customer Migration/Churn Rates
• Customer Demand for Products or Services
• Ecommerce, Merchandising & Brand Extensions
• Product Innovation
• Trade Promotions

Important? Of course. Notice that some of the decisions listed above involve functions other than marketing? Finance, merchandising, IT, business analysts, decision scientists, demand and supply chain as well as product management and research & development should have input into some of these decisions. For example, when analyzing the success and return on investment from trade promotions, finance is likely to use activity based costing** (ABC) rather than campaign uplift metrics. As for “customer lifetime value”, should the company define it as net profits over the expected customer lifetime or simply customer lifetime revenues? What about customer profitability (CP) defined as per quarterly or annual campaigns or by year over year revenues? Alternatively, some companies mistakenly calculate (CLV) as the total revenue or even gross margin associated with a customer.

Defining metrics is as important as defining precise measurements for recipes (if wrong, a soufflé will not rise), for mixed drinks (shaken not stirred), drug compounding formulas, ingredient ratios for rocket fuel formula ( Big Bang Theory: The Staircase Implementation), and for customer analytics. Otherwise, a trade promotion run by marketing will seem to be a huge success based solely on campaign ‘lift’ metrics while in the finance department, it will be calculated as a huge loss leader program ($$ lost) without any upside from market-basket additions.

Our Assessment

Companies that seek to become customer-centric by focusing their business processes on retaining existing customers and acquiring new customers by making it easy for those customers to do business with them, need to start by standardizing and integrating more than their numerous (and siloed) software systems and data models. Effective utilization of customer analytics requires standardizing basic definitions of performance metrics across all functions prior to making critical business decisions. Bottom-line: Before attempting to digitally transform into a customer-centric organization, acquire a universal translator to help remove the delta.

©2015 Hypatia Research Group. All rights reserved. Upcoming “How Customer Analytics & Insights Enrich Journey Design Processes: Benchmarks, Best Practices & GalaxyTM Vendor Evaluations.” No part of this research study may be repurposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management. Permission to link to this research must be requested in writing. For advisory services or assistance with vendor selection, requirements gathering or business process mapping, contactResearch@HypatiaResearch.com.

* The universal translator (also referred to as a “UT” or translator circuit) was a device used to decipher and interpret alien languages into the native language of the user in real-time. It operates by scanning brain-wave frequencies and using the results to create a basis for translation.

**CIMA (Chartered Institute of Management Accountants) defines ABC as an approach to the costing and monitoring of activities which involves tracing resource consumption and costing final outputs. Resources are assigned to activities, and activities to cost objects based on consumption estimates. The latter utilize cost drivers to attach activity costs to outputs.

Overcoming Challenges to Social Community Investment
For most mid-size to large businesses, a Facebook or Twitter presence alone is an insufficient strategy for achieving either competitive gain or any notable return on investment. While a Facebook presence is good for visibility and to give people a public place to comment or praise a company’s products, it lacks the features needed to have a multi-faceted, rich community with members-only forums, web casts, video- and photo-sharing forums, blogs, member libraries, content rating, and integration with other parts of the company’s Web site. That creates a few major hurdles that anyone looking to implement it in his or organization may have to overcome such as:

Top Drivers for Investment in Social Community Networks – ©2011-2015 Hypatia Research Group

Lack of tangible business objectives: Social media consultants and software makers shared that customers commonly come to them with only a vague idea of what they want to do with social media and little to no business case to justify it. This is reflected in the nearly 20% of survey respondents that give their main reason for investing in social media as “customers expect it.”

Cost: Social community platforms aren’t cheap. Depending on the level of social media expertise in the organization, the cost may include considerable service work including upfront planning, operational execution, and the implementation itself. These services may be provided by a software provider, a consultant, or other third party firm. Even pressing existing employees into social media service incurs a cost to other projects that are put on hold due to resource constraints.

Establishment of enterprise-level standard ROI Metrics: Debate over how to measure ROI in social media continues to rage among marketing and customer service professionals. Many even question whether financial ROI is the right metric to use at all, suggesting that non-monetary benefits be used instead. Hypatia believes that it is critical to calculate some form of financial ROI from social media initiatives. Without tangible ROI, organizations find it difficult to decide which, if any social media product or service is worth the investment.

Limited support from management: Is it surprising that a project without a solid business plan, requires significant investment, and offers soft rather than hard metrics to justify return on investment would lack the backing of upper management? Most seasoned executives are familiar with social media. They know that many organizations have a Twitter and Facebook presence and that their kids’ likely have Facebook pages. However, without clear business objectives and plans to operationalize social media, a project isn’t likely to get a lot of respect from the C-level executives. Alas, it is the CEO, CFO, COO, CIO or CTO who holds the purse on social media projects nearly half the time at mid-sized and large enterprises.

Balancing cost vs need for expertise: Social media often requires a great deal of expertise and staff time. Hence many organizations are compromising with a hybrid option for staffing social media — some services from the software vendor and/or consultant, some existing staff, and maybe a temporary worker or two to get things going. Hybrid hiring is an optimal one for a tight budget, balancing the need for external expertise in an area that is new and untried, with the need to use existing staff and contractors wherever possible to avoid cost overrun.

Things to Consider
The social media suite, or social community platform, is an integrated collection of social media components that encompass four main categories of functionality: sales and marketing, customer support, product ideation or mass feedback mechanisms, and reporting/analysis tools. They are aimed at the organizations that want more than a Facebook page for their company, and which likely intends to create social initiatives in two or more of the business processes above.

Despite the clamour around Facebook and Twitter, they are not great community platforms for companies that want to cultivate influential members, create loyalty programs, integrate social users with transactional data, put out polls, do crowd-sourcing for product concepts, create a user knowledgebase, provide an entertaining blog, or let users view a web cast.

Of course, like any enterprise software, social media platforms are not inexpensive. They can range from $5,000 to $20,000 per month for the software alone. If services are included, it brings the cost up significantly, to $20,000 to $50,000 a month for a mid to large organization.One SaaS social community application with all the basic bells and whistles was priced at $100,000 to $125,000 annual for an average configuration plus services.

There are many cheaper alternatives to commercial social media platforms – often utilized by small and mid-sized companies. But even then, organizations should evaluate the need to invest in consulting services for strategizing, planning, implementing, and managing a social community.

©2010-2015 Hypatia Research Group. All rights reserved. “Benchmarking Social Community Investments & ROI: Best Practices & GalaxyTM Vendor Evaluation Guide”. No part of this research study may be repurposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management. Permission to link to this research must be requested in writing. For advisory services or assistance with vendor selection, requirements gathering or business process mapping, contact Research@HypatiaResearch.com.

Verint’s Acquisition of Telligent Extends Multi-channel Customer Engagement

Earlier this week, Verint® Systems Inc.(NASDAQ: VRNT) announced that it has extended its customer engagement optimization portfolio with the acquisition of Telligent®, a market-leading, enterprise-class community solution. In our global studies, we have assessed that many organizations offer customers the ability to interact via multiple channels, however, most of this interaction is siloed and without context. For example, a customer may send a text or twitter message to a brand, only to have them respond with a URL to contact for further interaction rather than through the channel selected or preferred by the customer.

Moreover, when the customer does go online to the URL provided, s/he finds themselves interacting via self-service chat, and the offshore agent doesn’t have a clue what the customer needs and more importantly, doesn’t know:

• What this customer purchased recently;
• How many times they have attempted to contact the brand; or
• What the issue at hand really is.

Bottom-line: the customer has to start all over with their request. A lot of customer effort exerted in a highly commoditized global multi-channel world where a company’s major competitive advantage is how they treat their customers. And for the record, less than 20% of of over 500 global brands surveyed by HRG provided their customers with “blended channel interaction” engagement opportunities. Since 2006, we have defined this as blending the “interactional” customer behavior with “transactional” or purchase-based actions across ALL customer channels of engagement. Our assessment is that:

We first evaluated Telligent in 2010 for one of our first GalaxyTM benchmark studies entitled, “Benchmarking Social Community Investments & ROI: Best Practices & GalaxyTM Vendor Evaluation Guide”. “Social media software was developed to facilitate online conversations between businesses and their customers, partners, and future-stakeholders as well as to provide outlets for customers to share information with each other. Hypatia reviewed nearly two dozen enterprise-level social media platforms vendors. Each offers various tools that enable organizations to create a variety of social venues for customers to utilize on either a corporate web site or on public networking sites such as Facebook, Linkedin, and Twitter, etc… A majority of these social media tools address at least two or more of these four business areas:

• Customer Service & Support;
• Product Innovation & Ideation;
• Branding, Marketing & Commerce;
• Customer Analysis, Profiling & Segmentation prior to engagement.”

Our Analysis:
“Social media is not something that marketing and business executives can afford to ignore. The public is using social media to share opinions, take part in surveys and discussion threads, post videos of their activities, and tune into podcasts and webcasts on various topics. Many use social media tools to research products and services before they make the purchase. But organizations struggle with the decision of what social media to leverage, how to “do” social media, and how much to invest in something that may not wind up contributing to the bottom line.
Managers planning to launch a social media initiative should perform the same due diligence recommended for any major software or business undertaking. Namely, they must do a need assessment, looking at the pain points throughout the organization that could be addressed through social media, as well as a list of the options — both social media options and others — that could address those pain points.

Before deciding on critical issues such as which projects to roll out first, what software products to buy, and how large the budget for it should be, management also needs a list of requirements for the project, an inventory of existing staff and IT resources, and a plan to address potential needs in the future — such as integration of social media with CRM, e-commerce or supply chain management applications, wireless support for mobile phones, and the type of IT and social media expertise that may be required.

While social media may be an investment that companies need to make just to stay competitive, it should not be made in the dark, especially given the huge range of software and services options on the market and the time that will be invested in planning, implementing and managing the community.”

©2010-2015 Hypatia Research Group. All rights reserved. “Benchmarking Social Community Investments & ROI: Best Practices & GalaxyTM Vendor Evaluation Guide”. No part of this research study may be repurposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management. Permission to link to this research must be requested in writing. For advisory services or assistance with vendor selection, requirements gathering or business process mapping, contact Research@HypatiaResearch.com.

Presenting at CRM Evolution and CRMXchange: Customer Analytics Insights and Engagement Best Practices

On August 18th and October 29th, Hypatia Research Group will present best practices, benchmarks and research analysis from our latest primary research studies. At CRM Evolution 2015, Leslie Ament, SVP & principal analyst will share:

Why Big Data Insights are Necessary for Effective Multi-channel Customer Engagement: Customer Analytics Insights and Engagement Best Practices
Hypatia Research Group researched how Big Data insights affect multi-channel customer engagement best practices. Using case studies and survey analysis, this session shares strategies for creating innovative multi-channel customer engagement programs by developing alignment between IT, marketing, operations, and other line-of-business functions. Attendees learn how IT, marketing, and line-of-business professionals view accountability for the results of these programs; why collaboration is necessary for success and how to effectively collaborate; goals for leveraging Big Data for customer engagement excellence and innovation; metrics for assessing tangible returns on investment; and which best practices are applicable.

With CRMXchange, Ament will reference recent HRG research which reveals that 70% of all global organizations now offer their customers the option of reaching them via multiple channels and discuss how companies are optimizing engagement through services and applications including mobile, digital, WebRTC, screen sharing/co-browsing and video.

Best Practices in Customer Engagement and Loyalty: Why Effective Multi-channel Interactions Require Contextual & Historical Awareness
Leslie Ament, Hypatia Research Group Senior VP and Principal analyst, will be presenting a round-table webcast on the customer experience website CRMXchange The webcast, Best Practices in Customer Engagement and Loyalty is scheduled for October 29. The focus will be on how companies are meeting customers’ expectations of being able to communicate via any channel of preference, while maintaining both historical and contextual awareness throughout all of their interactions.

She will also explore best practices and trends that contribute to customer loyalty. For those interested in participating in this event, please contact info@crmxchange.com. Hosted by CRMXchange (http://www.crmxchange.com).

Just about every day we read about Big Data Insights, Analytical Insights delivered as a Service, the Internet of Things (IoT) and disruptive technologies and the impact it will have on business and our daily lives. Our research provides best practices and specifics on the how, when, why, and where this will occur especially in the areas of customer engagement and interaction, eCommerce, and operationalizing voice of the customer and business analytics.

Voice of Customer Analytics: All About That Big Insights Data-Bass!

In a previous study1 of the Fortune 500, “Delivering Big Data Analytics Insights: Why Choose Between Accuracy, Agility or Speed to Insight,” we found that organizations prioritize their investment by the following business initiatives2. Not surprisingly—all relate to revenues, customers and products:

•  Increase top line growth via accurate, real-time decision support (49.9%)
•  Increase sales & marketing effectiveness (40.9%)
•  Refine corporate strategy decision making processes via data-driven insights (40.5%)
•  Proactively uncover potential issues, makes course corrections and resolve customer complaints to better manage enterprise risk (29.8%)
•  Product innovation, ideation and design enhancement initiatives (32.5%)

Based on our comprehensive analysis of 1000+ organizations, our assessment is that enterprise VOC should be viewed as a subset or business application of big data analytics (BDA). A comparison of the data sources utilized for both BDA and VOC are very similar percentage-wise (+/-5%).

Bottom-line: It’s all about that Big Insights Data-Bass! (Figure 25)

Figure 25: Comparison of Information Sources Utilized: Big Data Insights and VOC*

Source: ©2014-2015 Hypatia Research Group, LLC. All Rights Reserved. | “Operationalizing Voice of the Customer: Benchmarks & Vendor Galaxy Rankings”

*Multiple responses possible: Will not = 100%

Due Diligence: Kick the Tires
Hypatia Research Group briefed more than twenty vendors and even more end-user organizations while researching this study. Regardless of which VOC vendor(s) a company considers, thoroughly understand its software capabilities; consulting services and/or training offered, its terms of service; and its underlying infrastructure. We urge potential purchasers to evaluate vendors against enterprise-level business requirements.

While B2C sectors gain the clearest VOC benefit, the fact remains that most companies, regardless of its industry, have a sales cycle and concerns about customer onboarding, retention, product or service quality, customer satisfaction or loyalty and profitability. Structured VOC programs provides companies the opportunity to track their progress, using key performance indicators, with baselines and milestones in a way that may not have been possible in the past. Ultimately, the brass ring is for organizations to turn transform these customer insights into repeatable business processes– either manual or automated—designed to address customer issues rapidly. Tangible benefits captured from among the 500+ companies researched included:

• Enhanced customer engagement or experience levels
• Reduction in customer churn rates
• Increase in customer retention or satisfaction levels
• Decrease in product or service quality complaints
• Better customer service via first call resolution
• Expansion of product innovation opportunities
• Improved brand reputation

Although there may be challenges on a micro-level to choosing a VOC vendor(s), we believe that the vendor landscape currently represents a strong opportunity for companies of any size. The number of VOC solution providers is quite large and this study focuses primarily on software solutions, software with consulting services, managed services and/or SaaS companies. Some target low-end capabilities with trial versions, others offer capture of text and/or data from multiple sources, analytics and reporting capabilities. In today’s software landscape, even small businesses can start conducting customer trend and pattern analysis in order to improve its sales, customer satisfaction, product quality, employee productivity or its profitability levels.

More importantly, a previous barrier to entry for most companies —expertise, cost and time of deployment — is alleviated by software + services, on demand subscription or managed services delivery options. These include easy and flexible set-up from multiple data sources. To be sure, companies should work toward using more consistent taxonomies within their company (that is, referring to specific items in a consistent way) in order to take the most advantage of VOC initiatives. But such a concerted effort offers a clear payoff in terms of customer insight quality.

Ultimately, Hypatia believes that customers will continue to select enterprise-level VOC solutions and services as an effective method for capturing, managing, analyzing and applying key customer insights that have the potential to enhance both business operations as well as the quality of customer engagements. As with most enabling technology usage—the people, business processes, and metrics utilized are often equal to or more important than the software itself.

Source: ©2014-2015 Hypatia Research Group, LLC. All Rights Reserved. | “Operationalizing Enterprise Voice of the Customer: Benchmarks & Vendor Galaxy Rankings”. No part of this research study may be repurposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management. Permission to link to this research must be requested in writing. For advisory services or assistance with vendor selection, requirements gathering or business process mapping, contact Research@HypatiaResearch.com.

In 2014, 783 major data breaches in the United States potentially exposed hundreds of millions of customer records to hackers, according to information compiled by the Identity Theft Resource Center (ITRC). Many of them “could have been avoided with multifactor authentication,” Loeser states without hesitation.

In a recently published primary research study, “Customer Identity Authentication: Reducing Identity Theft, Fraud & Risk” Leslie Ament, senior vice president and principal analyst at Hypatia Research, called multifactor authentication “a highly necessary component in protecting customers from fraud as well as for managing business risk.”

When it comes to multifactor authentication, it’s important to determine which deployment methods and factors will best suit your organization. That is why, companies should seriously evaluate HRG’s analysis of customer identity authentication & the voice biometric imperative.

No matter which option the company chooses, though, Hypatia Research’s Ament recommends “assiduous back-end integration and cross-organizational design.” Then, she recommends, “authentication methods should be deployed consistently across channels and modes. Customers don’t care that companies have selected different tools for the e-commerce and contact center channels”, she points out.

Vendors evaluated in Hypatia’s primary research study include:

• Aspect
• Authentify
• Genesys
• Nice
• Nuance
• SpeechPro
• Verint/Victrio
• Voice Biometrics Group
• VoiceVault

©2015 Hypatia Research Group, LLC. All Rights Reserved. “Customer Identity Authentication: Best Practices in Avoiding Identity Theft, Fraud & Risk“–A Practitioner’s Guide & Vendor Selection Criteria. Permission to link to this research must be requested in writing to Research@HypatiaResearch.com.

Customer Identity Authentication: Best Practices in Reducing Identity Theft, Fraud & Risk
A Practitioner’s Guide & Software Selection Criteria

Customer Identity Authentication in the age of digital interaction, customer engagement and commerce is a highly necessary component in protecting customers from fraud as well as for managing business risk. While many organizations often consider a certain percentage of fraudulent transactions as an acceptable (risk calculation) cost of doing business, the bigger issue is how to prevent fraud and identity-theft related losses while enhancing the trust, quality and security of the customer experience.

Two distinct – and possibly conflicting – motivations overshadow the discussion on customer identification authentication (CIA). On the one hand, organizations want to improve customer service, which means dealing with contact center queries quickly and efficiently. On the other, organizations want to improve risk management. That means limiting to as small a percentage as possible fraudulent attempts at credit card purchases, identify theft, prescription drug misuse, or other crimes. These two motivations overlap sometimes as well: organizations strive to assure customers that their call-center processes keep personal information safe and secure.

Organizations increasingly face problems with the way they current conduct CIA, however. In today’s call center, CIA involves a variety of options. One option is passwords, which can be hacked or forgotten. Another option is knowledge-based authentication (KBA), in which customers respond to questions that only they know the answer to. These can be static (i.e., pre-determined) or dynamic (i.e., generated at the time from background information).

Another option: ANI, or automatic number identification. If someone calls in on a number not already associated with the account, the call is flagged as a risk – even though it may be an actual customer calling in from a mobile phone, a hotel room, or an office. These are all fairly established methods. Another option is out-of-band authentication (OOBA); for more on this option, see case study two, “E-Commerce Vendor: The Value of Out-of-Band Authentication.”

Accuracy, Security, Cost & Customer Effort
The problem: all of these either take too long, or cost too much, and or are intensely disliked by customers (for instance, the answer to the question “who’s your favorite author?” might not be the same in 2015 that it was in 2010). The authentication process can take from 30 to 120 seconds, while customers’ preferred waiting time is just 60 seconds. In addition, we estimate that it costs 50 cents to authenticate each customer in the contact-center environment. Furthermore, industry estimates peg the percentage of calls because of “account lockouts” – that is, failure of passwords or challenge questions – at anywhere from 15 to 20 percent of calls, averaging one per hour per customer service agent.

Figure 1: Percentage (%) of Contact Center Fraud Detected in Near Real Time

©2015 Hypatia Research Group, LLC. All Rights Reserved.

For many years, vendors have promoted biometrics as a way to ensure authentication of a customer. These methods – which include fingerprint scanners attached to USB ports; retina scans using cameras, again attached to USB ports – tend to be both expensive and or inconvenient. While they are occasionally used in high-end security facilities and law enforcement, they have failed to gain traction in the part of the marketplace where cost is crucial, such as office workers. However, they are still viable in high-cost transactions, such as corporate wire transfers, or in law enforcement identification scenarios.

There’s one more option, which we’ve chosen to focus on in this report: voice. Voice-based customer identification authentication is becoming not only more popular with customers for its ease of use, but also more cost-effective for brands to utilize, thanks to several technological trends:

Advanced Analytics & Algorithms. A few years ago, algorithms required anywhere between 100 and 200 kilobytes of data to create a viable voiceprint. Now that amount is down to 5 kilobytes.

Processors. Systems use algorithms to match the speaker’s voice to voiceprints on file. Today’s faster processors make the analysis to confirm various aspects of the voice faster than ever before.

Storage: Cloud & On Premise. While organizations store voiceprints in databases that also have improved performance, what’s more important is that, with the cost of cloud and hard disks going down, the cost of storing an expanding library of voiceprints is less than ever before.

Smartphones. This is the big change. In addition to the voice quality on most wireless networks improving, smartphones are now ubiquitous. That means that whenever customers (or employees) want to access personal information, they carry with them a device that can transmit their voice clearly and effectively.

That’s why voice-based customer identification authentication is increasingly becoming the method of choice for a variety of industries. A voice print maps both physical and behavioral characteristics. Physical characteristics contribute to a print based on the shape of the vocal tract, the mouth, and the nasal passages. Behavioral characteristics include pronunciation accents, emphasis, speed, and gender.

Vendors evaluated in this study include:

• Aspect
• Authentify
• Genesys
• Nice
• Nuance
• SpeechPro
• Verint/Victrio
• Voice Biometrics Group
• VoiceVault

It’s simpler than other authentication methods, such as passwords and PINs. It’s also faster and less intrusive. It can have a strong impact on operational efficiency, by reducing the time and cost of authentication, as well as the time and cost of fraud investigation.

The results from organizations that have already adopted it are encouraging; one telecommunications company [Vodafone] calculated that it has reduced its average hold time by 24 seconds; another [T-Mobile] has said it has increased customer satisfaction by 20 percent.

In this report, we’ll look at the various aspects of voice-based CIA, including:

• The state of the market, including industries committed to it;
• Major software vendors providing CIA solutions & technology;
• Results of Hypatia Research Group’s global survey focused on customer identity authentication;
• What to consider in the purchase and deployment of CIA technology;
• Other deployment issues to consider;
• Customer usage and return on investment assessments.

©2015 Hypatia Research Group, LLC. All Rights Reserved. “Customer Identity Authentication: Best Practices in Avoiding Identity Theft, Fraud & Risk“–A Practitioner’s Guide & Vendor Selection Criteria to Reducing Identity Theft, Fraud & Risk. Permission to link to this research must be requested in writing to Research@HypatiaResearch.com.

Social Analytics & Intelligence for Customer Service Excellence!

Providing social customer service and support in today’s multi-channel environment is by no means an easy task. Driven by high volumes of online user generated content, social intelligence is a phenomenon searching for pragmatic, actionable business use cases with clear justification of return on investment. Some software vendors offer sentiment analysis to classify and prioritize customer conversations by topic, issue or sentiment prior to agents opening their work-queue. Others deploy text analytics and business process rules to route these conversations by urgency, issue, topic and/or suggested corrective action or opportunity to the appropriate agent based upon expertise in handling certain issues.

Most importantly, organizations want to know, how do we harness this exploding phenomenon of user-generated content, commonly known as “social media” in order to supply superior customer service and support? The complexity of harnessing this rich treasure-trove of customer information in today’s highly commoditized global marketplace presents challenges as well as opportunities for businesses seeking to foster higher levels of customer intimacy in order to engage, retain and to realize full customer lifetime value.

Hypatia Research defines social customer service and support technologies as a subset of multi-channel customer service and support business processes, best practices and performance measurements that are supported by enabling technologies. This may include the monitoring, categorization, sentiment and trend analysis, text analysis, correlation discovery and root cause analysis of all types of unstructured social media and/or user-generated content from multiple customer conversations both private and public. In short, social CS&S helps organizations uncover customer intelligence for guidance, decision-support and/or corrective action deemed most advantageous in meeting customer service business objectives and/or corporate goals.

Creating social intelligence is one step in the process of leveraging this knowledge towards customer service and support excellence. This leverage should involve multiple best practice approaches that are based upon an organization’s industry, size, geography, culture as well as customers’ expectations for various types and levels of support (see Figure 8 below) such as; Self-service Support, Automated Assisted Support, Preemptive Support, Proactive Support, and/or Prescriptive Support.

Regardless of the flavor of social customer service and support level deployed, executives cited “the ability to respond to customer requests for support, service or information promptly” as the highest reason for investment in social intelligence tools.

Figure 1: Five Flavors of Social Intelligence for Customer Service & Support

©2013-2015 Hypatia Research Group, LLC. All rights reserved.

Timely Corrective Action Prevents Churn
Our research of 526 organizations, (based on survey respondents that actually utilize, recommend, influence, hold budget or veto power over the purchase of social analytics and intelligence software) shows that return on investment from customer service and support initiatives is higher than other business use cases. In fact, one-third (35%) of customer service and support executives realize greater than 5% return on investment–defined as a percentage of total annual marketing spend. Another 15.5% realize between 3%-5% return on investment. (See Figure 9 below). Only 13.2% cited lack of tracking or knowledge of return on investment.

Examples of customer service and support requests via social channels might include:

•  Posts and tweets on poor cell phone reception issues where consumers chose not to call a 1-800 number;
• Tweets to cosmetics companies to find out if lipstick, foundation or skin moisturizer contains gluten or other allergens;
• Consumers in a retail or grocery store requesting coupons mistakenly left at home;
• Mobile phone users discussing service plans in online community forums—and then seeking advice of others as to satisfaction levels with competitive plan offerings.

Figure 2: ROI: Social Media for Customer Service & Support

©2013-2015 Hypatia Research Group, LLC. All rights reserved.

Just imagine if a valued consumer tweets “OMG! I forgot my 10% discount coupon for Lancôme at home” and an agent from L’Oréal proactively sends a link for a similar discount coupon to the consumer’s twitter address for mobile download while Lancôme does not respond at all within the next twenty-four hours? There is a tangible business risk for organizations that are slow to adopt social channels as means of interacting and engaging with consumers—as well as a corresponding opportunity for those that do.

Bottom-Line: Customer service and support is where corporate rubber meets the road in regards to what the brand promises and what the brand delivers. From an engagement vantage point that extends from pre-sales through post-sales, customer care professionals are in a unique position to drive conversion rates via multiple interactions. Organizations that adopt social media tools for customer service, combined with best practices for rules-based business process workflows, are empowered to utilize their social channels as decision support and customer engagement for value creation. Ideally, social analytics software tools should help organizations measure the effectiveness of social media on customer service and support initiatives—but, insofar as measuring a tangible ROI—software alone is just a major part of an overall strategy, operational plan and solution.

Operationalizing the value derived from social media channels does require the ability to map a best practice customer journey by specific priority, topic or issue. Realizing concrete benefits from social investment also requires the ability to configure these business process workflows according to customer-centric policies as defined by internal stakeholders such as the Chief Customer or Chief Marketing Officers.

Bottom line: Our assessment is that organizations should take a balanced approach to enterprise social business. “Know when to listen, know when to analyze, know how to influence, and when to act and engage.”

About Hypatia Research Group
Hypatia takes an end-user approach to business and technology research. Similar to Consumer Reports , our industry experts are objective in providing end-user organizations with independent primary research assessments as decision-support in evaluating various enabling technologies, service providers and consulting firms. To maintain its independence and impartiality, Hypatia Research does not engage in syndicated research sponsorships , accepts no outside advertising, provides no free samples, and utilizes proprietary research techniques to evaluate vendors.

Why this focus on actionable insight? Knowledge for the sake of knowledge without a purpose is outside our mission. Since 2001, Hypatia’s tagline has been calculating results. Our research methodology, a hybrid approach that combines qualitative and quantitative input from end-users, benchmarks the business return on investment realized by organizations of all sizes. http://www.HypatiaResearch.com

Research Methodology & Respondent Profiles
Hypatia Research Group interviewed and surveyed executives from more than 500 global enterprises that utilize Social Analytics and Intelligence platforms, tools, and services across numerous industries. Questions were designed to determine the following in regards to current use of social business practices:

MARKET Research Approach
Hypatia Research applies a hybrid methodology [quantitative & qualitative] that evaluates the Market-drivers, Actions, Responses, Knowledge, Enablers, and Technology enablers (MARKET) that influence corporate behavior in specific business environments. These terms are defined as follows:

Survey Respondent Profiles
Company size segmentation encompassed upper mid-market ($750M-$2B) and large enterprise with revenues at >$2B. Respondents came from a range of industries, with the largest sectors being manufacturing (14.9%), professional services (13.7%), financial services (12%), retail (11.5%), healthcare providers (10.2%), and consumer goods (7.9%).

Responding executives held customer-focused job functions within corporate strategy, consumer insight, customer analytics, product marketing, customer service, merchandising, and Web analytics with roles at the manager, director, VP and C-level.

©2013-2015 Hypatia Research Group, LLC | “Exploiting Social Intelligence for Customer Service & Support Excellence: GalaxyTM Software Evaluations“. All Rights Reserved. No part of this research study may be repurposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management. Permission to link to this research must be requested in writing to Research@HypatiaResearch.com.

What Has Not Changed in Enterprise Governance, Risk and Compliance Solutions?

The GRC market is still highly fragmented. In too many instances, enterprises are still using GRC applications as departmental solutions to solve a specific issue relating to governance, risk, compliance, or security.

There’s a logical reason for this. Frequently, enterprises deploy a GRC solution to solve a specific problem. They’ve flunked an audit. They’ve discovered a security breach. They’re subject to a new regulation. (In short, they react.) Facing this urgency, they turn to a solution that’s simple and inexpensive to deploy. Short-term problem solved.

The problem with that strategy is that every department in an enterprise can benefit from the operational insight that GRC applications can provide. Tackling GRC on a departmental basis solves that department’s problem, but it doesn’t provide the enterprise-wide insight that helps companies understand where its capability gaps are. Nor is it particularly easy to integrate or aggregate the information to develop a consistency view for analysis.

The basic problem is a lack of collaboration, which leads to a lack of visibility. The legal, human resources, and finance departments are all separate and using different tools. No one’s interested in the needs of the other divisions, and everyone mistrusts the other’s data. That means at the top, there’s no transparency into the overall risks.

In a way, the single-minded focus on a specific department is understandable. Enterprises may still rely on the innumerable industry-specific or vertical solutions available because those solutions tend to relate to specific regulations, whether FISMA (financial services), HIPAA (health care), or PCI (retail). At the same time, enterprises can also deploy industry solutions relating to specific scenarios, such as third-party (example: supply chain) GRC for retail and manufacturing, or security for the banking industry.

Enterprises aren’t solely to blame for this attitude. For vendors, it’s easier to sell to a specific department leader or executive, rather than trying to navigate a labyrinthine organization, trying to understand who has influence and who doesn’t. When we asked vendors to whom they sell, the answer spanned multiple positions: CIO, CFO, chief compliance officer, corporate counsel, risk management, as well as human resources and operations. It doesn’t matter how it happens, but the result is too many point solutions that don’t integrate.

Our assessment is that most (not all) of what happens in a company relating to GRC is horizontal, rather than vertical. Information technology, security, human resources, finance, and risk have ramifications in every enterprise. To comply with some of the regulations in Sarbanes-Oxley – one of the big drivers of GRC deployment a few years ago – enterprises must prove that only certain people had access to data, and that the same person did not control multiple aspects relating to finance (i.e., segregation of duties). This may apply not only to the finance department, but also to high-level executives in each division.

Consider this; there are more than 30 different potential GRC categories. One alternative to an enterprise-wide solution is to license, deploy, manage, train, and upgrade 30+ different point solutions every time an industry or financial regulation changes. Hypatia does not believe that this kind of fragmentation increases a company’s security or decreases its risk. Although it does add several layers of complexity to the compliance efforts involved. In short, our recommendation is that an enterprise-level solution with one-to-three specialty point solutions is optimal. Ten or more different GRC point solutions are not.

Finally, there’s another factor that supports the argument of an enterprise-wide solution. The things that really haven’t changed: the plethora of new risks and regulations enterprises face. The faster companies can respond to these demands, the better. Maintaining a single repository for all GRC-related issues provides an advantage in that response time. Information needs to be shared quickly with the right functions/roles, and with the right guidance for taking action on alerts, outliers, or anomalies aligned with an organization’s tolerance for risk.

Converging Trends

Three converging trends further complicate companies’ efforts toward insightful and accurate GRC deployments:

•        First, complexity of compliance increases not only because of new governmental regulations, but also because different regions or departments may have divergent or even conflicting requirements.
•         Second, GRC applications themselves are changing, with eGRC applications adding more IT-GRC capabilities, and vice versa.
•         Finally, advances in technology such as cloud, service-oriented architectures and master data management affect business processes and data integration, key elements of GRC efforts.

In addition to the fragmentation among the vendor’s offerings, our research reveals a high level of fragmentation among users’ perception and understanding about GRC, and particularly the importance of having an integrated GRC strategy.

To gauge the understanding and penetration of GRC solutions within a selection of global companies, Hypatia Research surveyed 664 global executives directly involved with GRC processes, audits and decision-making on the following facets of their deployments, among others. The entire 60 page primary research study is available for purchase at: “The Convergence of Enterprise GRC: Benchmarks & Vendor Galaxy Rankings”

“The Convergence of Enterprise GRC: Benchmarks & Vendor Galaxy Rankings” ©2014-2015 Hypatia Research Group, LLC. All rights reserved. No part of this research study may be repurposed, distributed, translated or published in any format without the express written consent of the Hypatia Research Group, LLC and its management.

Highlights of SAP CRM Insider: All About Customer Engagement & Commerce (CEC)

Rather than focusing on the intangible “customer experience” when addressing customer interactions via various touch-points, SAP has chosen to get tangible with their CRM offering by focusing on customer engagement & commerce.  In emphasizing multichannel engagement AND linking it with commerce, SAP brings to market a “rubber meets the road” solution in which a highly fragmented and often unpredictable customer journey may be tracked, analyzed, refined and re-purposed for personalized engagement with individual customers or segments of customers with conversion as the end game. SAP refers to this as “real-time individualization”, although as early as 2006, Hypatia defined this as “precision marketing”.

In short, SAP brings to market the combined synergies of Hybris (commerce), HANA (enterprise analytics), KXEN (decision science) and CRM (comprised of sales, service & support and marketing functionality); effectively bridging the front office to back office. In other words, interactional behaviors, transactional purchase history, customer journey touch-points (online, social, mobile, digital, direct etc…) and engagement are all captured, analyzed, and served up to provide intelligent guidance™  to call center agents, sales professionals, post-sales field support, marketers, billing and others along the entire customer life-cycle.

Figure 1: Information Integration, Analytical Sophistication & Speed Improves Performance

©2015 Hypatia Research Group. All Rights Reserved.

Most CRM vendors do not currently offer commerce as an integrated part of their solution, although several do have partnerships with established API connectors. In adding commerce to its customer engagement portfolio, SAP has packaged a compelling solution with the means to analyze, refine, re-engage and tie customer journey processes to tangible metrics such as actual sales, cost reductions, customer acquisition and retention metrics to return on investment.

This is not to say that implementation and deployment of Customer Engagement & Commerce will be a walk in the park. With this solution comes the opportunity to improve or innovate current customer interaction and engagement processes that reach across the customer life-cycle from first point of contact to post-sales relationship–and we all know change (transformation) is challenging. Investment in the software itself along with professional services, and consulting is not insignificant either.

However, if I were still in a CMO role, I would seriously consider CRM solutions that provide tangible customer engagement metrics over fuzzy, feel good customer experience metrics every day of the week. And I’m sure most C-level executives and their boards of directors would agree.

©2015 Hypatia Research Group. All Rights Reserved. Intelligent Guidance™ by Hypatia Research Group, LLC.

Delivering Big Data Analytics Insight: Why Settle for Accuracy, Agility OR Speed? (Why Not All Three?)

Exploiting the value inherent in the analysis of continuously increasing volumes of Big Data is not new. For at least the last ten years, companies within industries such as financial services, insurance, consumer goods, entertainment, travel and hospitality have engaged marketing services providers to guide them in understanding, profiling, targeting and influencing customers to purchase their goods and services.

The upside to this arrangement is the ability to source unique expertise (such as data scientists, statisticians, and data modelers or data engineers) on a project or managed services basis without high investment in personnel, infrastructure (hardware or software) or integration of this enabling technology. Typical projects run from six weeks to six months depending upon the goals, project scope and execution plan. Key models or analytical insights collected from across a variety of sectors might be repurposed on various customer projects resulting in lower project fees . All of which may be viewed favorably by those in roles such as COO and CFO.

However, keeping analytical domain expertise in-house empowers companies to rapidly discover and apply unique insights created from proprietary and public information sources while the opportunity is viable. It is this speed to insight that is at the root of value creation in a Big Data Analytics environment.
Questions we recommend organizations ask themselves include: How many queries, accurate analytical models and reports does it take to support critical business decisions in minutes rather than weeks? How much is this worth to your business?

Research Approach
Our analysis of 436 Fortune 500 executives that actually utilize, recommend, influence, hold budget or veto power over the purchase of Big Data Analytics (BDA) or business intelligence software provides contrarian insight into how and why large organizations:

•  Invest in Big Data Analytics software solutions
•  Utilize a wide variety of informational sources
•  Measure productivity and effectiveness of BDA initiatives
•  Seek high accuracy and reliability of results
•  Realize downstream business benefits
•  Prioritize software selection criteria

This study provides end-user organizations with an analysis of why companies invest in Big Data Analytics solutions, what tangible benefits are possible with BDA, and what metrics can be used to measure the ROI of a BDA initiative. In short, our research provides actionable insight that companies may use in compiling a vendor short list, request for qualifications and best practice terms of engagement with software vendors.

Assessment:

Enterprises are still in a nascent maturity level in their ability to rapidly perform and exploit the intelligence derived from analysis of Big Data in-house. Of the thirty point five percent (30.5%) of companies citing more than five years’ usage of Big Data Analytics, a full eighty nine point three percent (89.3%) of these early adopters cited engaging with managed service providers rather than create in-house competencies.

Our assessment is that this is partially a result of:

•  Shortage of expertise available
•  High barrier to investment: software and hardware
•  Limited access to, or ability to fully use all information sources desired
•  Sophistication level of software and hardware available
•  Demand for Big Data insights in near real-time
•  Uncertainty in cost of ownership versus potential return on investment

Figure 1: Usage of Big Data Analytics Initiatives

©2014-2015 Hypatia Research Group, LLC. All rights reserved.

However, early results from our research demonstrate that successful organizations do benefit from significant double-digit downstream business benefits as well as operational cost take-outs. In years one through four, between sixty nine to eighty four percent of organizations realized between twenty to fifty percent annual return on investment (ROI); top performers cited attaining an ROI of greater than fifty percent on an annual basis.

A deeper analysis shows that these top performers benefit from greater sophistication, maturity of experience, and discipline in employing BDA processes in ways that impact the business. Rather than taking an opportunistic or laboratory approach, these companies are more likely to create corporate, operational or tactical objectives, align performance metrics with goals, and prioritize their focus on specific business use cases.

Driven by the convergence of business at speed of light requirements—such as ever increasing competition for market-share and share of customer, combined with proactive management of enterprise risk and optimization of spend intelligence—an inflection point will soon be reached. We estimate this will occur within the next three years at upper mid-market and large enterprise organizations. For more on this topic see ©2014-2015 Hypatia Research Group. All Rights Reserved. | “Delivering Big Data Analytics Insights: Why Choose Between Accuracy, Agility OR Speed?”

Highlights of Microsoft Convergence 2015

Microsoft has evolved significantly in the last three years–and its all good for customers (B2B) and consumers (B2C) alike. Not many large software vendors produce as large a portfolio of offerings for both businesses and consumers–and until recently–that had been a challenge for Microsoft.

To be fair, my assessment is that it would have been a challenge for ANY large software provider during the last 3-5 years during which consumer and business requirements continued to cross-pollinate the expectations for each segment.

In Q4 2014 we published a primary research study entitled “Next Generation CRM: All About Business Process Excellence” where we stated:

“Along with ERP systems, CRM software has become one of the few successful enterprise software mainstays.   There’s only one problem: it’s still a silo at many organizations. It’s hard to exchange information with other applications. If enterprise vendors knew how companies were actually going to use products like CRM, they would have built them with better application programming interfaces (APIs). CRM vendors focused on solving one problem – the lack of a great customer database – and accidentally created another one: how to make that information seamlessly available to other applications, and make information from other applications seamlessly available.” According to the report’s authors: “Customer information, after all, doesn’t just live in a CRM application; it lives throughout & beyond the enterprise.”

At this year’s Convergence Conference, Microsoft unveiled a roadmap for all things that “touch” the customer or customer engagement strategies to be specific. Sessions I attended focused on:

Customer engagement software-which encompasses:

• Enterprise Marketing
• Service & Support
• Sales & Lifecycle Management
• Business Analytics (PowerBI)
  
• CRM Data Integration

Significant is that Microsoft Dynamics now provides customers with a fully integrated (converged) suite of products to enhance customer engagement via multiple touch-points and to do so with enterprise-wide intelligence supported by Microsoft’s Business Analytics platform (PowerBI and Azure Data Services)–which Hypatia has referred to in previous research as “Intelligent Customer Engagement“. For example, its enterprise marketing offering characterizes customer intelligence as residing in:

• Systems of record: Accounting, Enterprise Resource Management (ERP), and Point of Sale (POS)
• Systems of engagement: Marketing Automation (online, digital, offline) Marketing Resource Management, Marketing Analytics, Mobile, and Social
• Systems of intelligence: Predictive Marketing & Lead Scoring and Location-based Engagement
• Systems of Knowledge: Parature’s integration with Dynamics CRM for knowledge management

Designed for increased productivity and exploration, PowerBI Visualizer serves up multidimensional data charts, superimposed data charts, geo-location charts, tree-maps, and live dashboards that can be queried in real-time using natural language questions. (via Ask.com)

According to Robert Stutz, Corporate Vice President, Dynamics CRM

Our assessment: Microsoft delivered on its road-map and product strategy promises. There are a few features and functionality that are still on the 2015 road-map and not yet generally available, but the “architectural bones” are in process–so its all good for customers (B2B) and consumers (B2C) alike. Moreover, CRM is no longer a siloed application solely as a result of software design. If CRM usage remains “siloed” by role or function at organizations, it will be the result of cultural issues or resource constraints–not the software. ©2015 Hypatia Research Group. All Rights Reserved.

Leveraging Content to Increase Customer Engagement

Digital content management is not a new technology category. But as the types of content and distribution channels have multiplied, so have the challenges involved in digital content and asset management. Now, organizations are pushing out ever larger quantities of marketing, sales and customer support content to their public, and the number and types of publishing channels, such as wireless devices, RSS, podcasts and video, continue to proliferate.

Customers, already suffering from extreme information overload, are receiving more than 10X messages per hour than just five years ago. Getting and keeping them engaged now requires a team of professionals rather than just one very overworked marketing specialist.

These realities are driving the need for companies to streamline the management and repurposing of all product, service and brand-related content. In response, vendors are beefing up their solutions with capabilities that allow organizations to more easily repurpose and distribute rich media, social media, foreign language support, wireless access, video, trigger surveys, games, webcasts and more.
Thus, we determined to focus primarily on the business pain companies experience in “Leveraging Content to Increase Customer Engagement” or (CCM) for short—Customer-facing Content Management.

Many Customer Content Management (CCM) solutions provide a wide variety of features, including support for mobile devices, workflow to handle content creation and distribution, rules engines for personalization, content analysis tools, and enterprise search tools that utilize taxonomies for categorization of metadata in order to locate content more easily.

MARKET Research Approach
Hypatia Research applies a hybrid methodology [both quantitative & qualitative] that evaluates the Market-drivers, Actions, Responses, Knowledge, Expertise, and Technology enablers (MARKET) that influence corporate behavior in specific business environments. These terms are defined as follows:

•  Market Pressures — external forces that impact an organization’s market position, competitiveness, or business operations
• Actions — the strategic approaches that an organization plans in response to industry pressures
• Responses—how organizations invest and overcome business challenges.
• Knowledge & Expertise—competencies, skills and processes required to execute on corporate strategy.
• Enabling Technology— the key functionality of technology solutions required to support the organization’s enabling business practices

Hypatia Research, LLC defines customer content management (CCM) as an integrated suite of content management and customer engagement technologies designed to maximize the value of content created for marketing, sales, customer support or other customer-facing needs. CCM applications help organizations optimize the value of customer content by streamlining content creation, distribution and reuse, and by employing dynamic personalization to provide Web visitors with content based on their individual traits and perceived needs.

CCM is a category that has emerged over the past few years in response to the realization by businesses that the number one reason that prospects and customers visit a web site is to obtain content, all sorts of content. They come looking for product information, which could mean videos, or FAQs, or social forums, as well as support help, product updates, informational pod casts, e-commerce catalogues, photos, blogs and articles. They expect to be able to access this content and make transactions not only from the Web but from mobile devices, kiosks and email. The businesses that market to these customers and prospects want to know more about them. How old are they, where do they live, what sites are leading them here, what content do they like, what influences them to purchase or recommend certain products or brands?

Market Pressures and Vendor Landscape
Over the past two to three years, this convergence of capabilities has attracted a number of vendors from several different content management categories to the new CCM space. Hence CCM products are coming from content management vendors who are adding multi-channel and multi-format support, as well as customer focused technologies such as behavior tracking and analysis, mobile support, and content personalization. At least two dozen of the vendors in other types of content management have evolved unified CCM platforms, combining the functionality of several categories into one.

To create CCM suites, a half dozen or so of CCM vendors have acquired smaller CCM players to fill in gaps in their product line. Adobe, Oracle (FatWire) and SDL (Alterian) are all examples of this. Other vendors, such as EpiServer and Ektron, have been building functionality into their systems over time and eventually merged in order to compete in this crowded vendor marketplace. There are also several open source products on the market, with commercial vendors who provide customization and other technical support services, and often a commercial, enterprise version with more functionality.

Benchmarks and Measures of Customer Engagement
Our research revealed that corporate executives cited the following metrics as important for measuring the success of their customer content management efforts:

•  Increase in repeat visits by customers who access content;
• Capture of customer information such as product likes and feedback;
• Conversion rates for visitors who purchase (or donate for non-profits) after accessing content.

Estimating total ROI eludes many organizations. One third of all companies reported not tracking return on investment from investment in CCM. On the other hand, 48% overall reported getting an ROI of at least 2% of their annual marketing budget from CCM investments. The longer the organization has had a CCM implementation, the more likely they were to track ROI and to report higher ROI.

The Galaxy Leaders
All of the aoftware leaders in the Hypatia CCM Galaxy evaluation chart offer full featured CCM suites and services for both strategic and technical/implementation needs, and most also partner with outside services providers for Web design, customer engagement strategy and/or marketing optimization. Companies were placed on an X/Y axis of maturity and vision. The leaders were typically in business for many years (some since the late 1990s), have large customer bases in several industry verticals, and also have a strong product vision.

Our Assessment:
Organizations recognize the need for more dynamic and personalized Web content to attract customers, but are often struggling with multiple content creation and management systems. For many organizations, just getting everyone onto the same content management system is an enormous task, and goals such as visitor behavior tracking and personalization of content are goals likely to be met in the future.

Because of that, not all organizations are going to be able to do a complete migration to a single CCM system, but will attempt to add capabilities to their legacy system while waiting to evaluate CCM platforms.

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Customer Engagement: What Do Customers Want & Expect?

We were recently asked to provide comment (for an industry publication) on the types of software gaining traction among marketers and if, (not how) this software impacts the customer experience. I would assert that all investment in customer engagement solutions should reduce the customer’s effort, be seamless, and encourage interaction via all preferred channels while providing stakeholders analysis of (dashboard/reporting) and multichannel visibility into customer preferences and behaviors. Moreover, I would encourage organizations to use this customer analysis and insight to:

•     Improve enterprise level operational business processes (from communications, pricing, marketing and billing to services);
•    Predict and guide marketers, sales professionals and call center agents on the next best action for customer engagement or offer management;
•    Transform into a truly customer-centric enterprise.

HRG defines a business as customer-centric when its corporate environment organizes its offerings, operational processes, pricing models, and customer engagements & interactions around the requirements, preferences and future desires of its customers. Our assessment is that getting from point A to Z still challenges many organizations.

Q: What are the types of software gaining traction among marketers, and if this software impacts the customer experience?

According to Leslie Ament, SVP Research & Principal Analyst at Hypatia Research Group, “Multichannel customer service and support, inclusive of mobile and social is now a must-have for any B2C or B2B2C product or service company. Our research on “Operationalizing Voice of the Customer” reveals that 70% of global organizations now offer customers the option of interacting through multiple channels due to customer demand, preference and expectation of anywhere, anytime, and any-channel of support. Keep in mind, the proverbial Achilles Heel in offering a multichannel customer experience is when companies continue to offer this via a siloed approach rather than as a “blended” experience. Providing customers a seamless, blended experience should be an organizational goal for all customer-centric companies.”

Figure 1: Ease of Customer Interactions & Communication by Channel: 526 Global Respondents

Q: Are CMOs leaning toward best of breed or integrated enterprise solutions for this type of technology?

Ament continued, “This depends on numerous factors and is not limited to the ones listed here:

•    What solutions are currently in use and will best of breed or point solutions integrate easily with newer solutions?
•    How “married” is the culture to some of these solutions?
•    Is there appetite to rip out existing applications, systems or tools and to deploy an enterprise solution?
•    Initial cost and future total cost of ownership?
•    Expected return on investment?
•    Requirements? Is the organization challenged and actively seeking a technology solution to specific problem(s) or determined to attain certain milestone goals?
•    Size of organization, industry, culture and customer install base?

“My assessment is that there should not be a one size fits all approach, but rather a serious evaluation of what an organization needs to accomplish with investment in any type or category of software, Ament concluded.”

©2013-14 Hypatia Research Group, LLC. All rights reserved.

As early as 2006, social conversations about the risks of a GlaxoSmithKline diabetes drug Avandia began to significantly increase in online forums and blogs well before a larger scale medical analysis showed a correlation between use of the drug and higher heart-attack risk. According to a 2010 report by Wool Labs, patients expressed concerns about the drug’s side effects years before the Food and Drug Administration restricted its use in late 2010 because of an increased risk of heart attacks and strokes. Using a newly developed Patient Sentiment Index (PSI) the authors calculated that sentiment was negative but not irreversible in 2004. Even in 2006, intervention could have had at least some impact. However, with the FDA’s decision not to recall Avandia in the first half of 2010, “there is anger now directed at the FDA, industry and GSK. But patients are also now very entrenched in their decisions and seem closed to any new arguments to sway them otherwise.”

Hypatia Research Group recommends organizations supplement their traditional media, brand and reputation management initiatives with social media outreach and analysis of trends, share of volume and voice, campaigns and other metrics that align with corporate goals. Ideally, social leverage for media, brand and risk professionals should be operationalized (i.e. create a closed-loop feedback process) and simultaneously focus on outreach, analysis, influence and intelligence gathering.

Insofar as converting context into actionable insight, most organizations are largely in the early adopter stage in exploiting an enterprise, customer centric approach to social media. However, our assessment is it will take time for organizations to fully process what is feasible in regards to capturing, managing, analyzing and above all, creating social intelligence in order to take action on this user-generated content.

To Everything There is a Season and a Purpose

Few social software solutions actually provide line of business managers—rather than IT—the ability to create rules-based routing of customer conversations that are prioritized and categorized by predefined issues. In short, what makes social media conversations truly actionable?

•  Will guidance provided by trending data or simple sentiment analysis provide enough intelligence for business process innovation?
• Is discovery correlation, text analytics or predictive analytics required to take action based on certain customer profiles or clusters?
• If an organization wishes to give preferential treatment to customers with high influencer scores or annual customer profitability levels, what is required? For example, routing higher value customers to the top of the action queue while known ‘complainers’ are given lower priority.

Operationalizing the value derived from social media channels does require the ability to map a best practice customer journey by specific priority, topic or issue. Realizing concrete benefits from social investment also requires the ability to configure these business process workflows according to customer-centric policies as defined by internal stakeholders such as the Chief Customer or Chief Marketing Officers.

Bottom line: Our assessment is that organizations should take a balanced approach to enterprise social business. “Know when to listen, know when to analyze, know how to influence, and when to act and engage.1”

1 Influenced by Kenny Rogers, The Gambler lyrics © Sony/ATV Music Publishing LLC “You got to know when to hold ‘em, know when to fold ‘em, Know when to walk away and know when to run.”

©2013-14 Hypatia Research Group, LLC |Excerpted from; “Using Social Intelligence to Enhance Customer Centricity“: A Practitioner’s Guide for Marketing, Sales & Customer Care Executives“.  All Rights Reserved.

HP has announced the launch of HP Haven Predictive Analytics, a program used to speed up the statistical analysis and machine learning processes that allow companies to interpret vast sets of data.

Even though R has limited value when it comes to working with extremely large volumes of data, many analysts and data miners rely on it, points out Leslie Ament, senior vice president and principal analyst at Hypatia Research Group. Despite its weaknesses, she states that it has the ability to modify algorithm options to fine-tune analyses; contains a variety of available algorithms; and can automate repetitive tasks. “HP’s offering should enable fans of R to expand their use of a familiar tool to big data analytics projects without fear of crashing systems,” Ament says.

The offering, available through the Vertica Web site, operates on an open-source platform and has available enterprise support from HP. It is priced per node.

“In order to attain the promised boost in performance by splitting tasks between multiple processing nodes, which is necessary with large data sets,” Ament says, “buyers will need to purchase enterprise support from HP, priced per node. This approach to big data analytics may be attractive to data scientists loyal to R, but will obviously come at a price which each organization will need to evaluate for themselves.”  See more actionable intelligence on Big Data Analytics Insights.

Achieving Customer Centricity: Leveraging Social Intelligence for Product Innovation

Whether one subscribes to the 4 P’s[1] of market planning —product, place, price, and promotion, or the more recent 7 P’s[2] of marketing, —product, price, place, promotion, physical presence, provision of service, and processes, it is evident that “product” is the first P of priorities listed.  Moreover, the latter 7 P’s are acknowledged as the standard modern marketing mix most relevant in service industries; however, they may be beneficial to any customer centric business model where meeting the needs of customers is of highest priority.[3]

All those involved in product innovation, service extensions, or lifecycle management, from the executive level to individual contributors rigorously pursue answers to the following questions:

• What does the client/consumer want in regards to our company’s product/service?
• What needs does it address?
• What features should it have in order to meet these needs?
• Any capabilities/features/functionality that we have not yet addressed?
• How and where will the customer use it?
• Is the appearance important to the customer?
• What size(s), color(s), and so on, should it be?
• How will it be named and branded given our current portfolio of offerings?
• Is it significantly differentiated versus the competition?
• Are we able to position the product/service in a superior manner to the competition?
• What is the most it can cost to provide, and still be sold sufficiently profitably?
• Have we included pricey features that the customer will not actually use?
• Will the customer have a positive experience with our product/service?
• Etc…

Incorporate Social into Product Design Cycles

Not surprisingly, corporate executives surveyed shared that their top three priorities for measuring the success of their Social Analytics and Intelligence efforts were, in order of importance:

• Capture of customer information such as product likes, design suggestions, merchandising feedback (35.9%)
• Propensity to recommend brand, product or service: Influence or Klout Reports (33.3%)
• Brand sentiment or campaign Impact: positive, neutral, mixed or negative with historical analysis (33.3%)

Figure 5: Top Priorities for Social Intelligence Initiatives

©2014-2015 Hypatia Research Group, LLC.  All rights reserved.Multi-response answers—will not equal 100%

Customer, Community and Content

Social media presents an enormous opportunity to exploit social media for product innovation! Exploring peer-to-peer forums or communities (public and private), contact center conversations, social networks and blogs all offer a rich trove of material for analysis. Hypatia Research Group recommends organizations supplement their customer advisory boards with social media with the goal of utilizing this channel as part of their voice of the customer[4] initiatives. Ideally, social processes for product innovation professional should be operationalized with a focus on intelligence gathering, prototype testing (via private[5] social community networks or forums), and feasibility analysis.

• Listen to relevant information sources
• Analyze for trends, product likes, design and merchandising suggestions and all types of feedback relating to product or service offerings
• Innovate and enhance product/service offerings, streamline product portfolio planning and manage product lifecycles with input from social channels.

[1]   E. Jerome McCarthy proposed a four Ps classification in 1960. As a framework for fine-tuning the marketing mix, the P’s—product, place, price, and promotion—have served consumer marketers well for half a century.

[2] ©2004 Entrepreneur Media Inc. authored by Brian Tracey, “Million Dollar Habits: Proven Power Practices to Double and Triple Your Income”

[3] ©2013 Harvard Business Review. Advocates shifting 4 P’s to 4 S’s—products to solutions, place to access, price to value, and promotion to education—SAVE, for short.

[4] ©2010-2014 Leslie Ament, Hypatia Research Group. “Operationalizing Voice of the Customer: Maturity Models, Best Practices,  Benchmarks & 2014 Galaxy Vendor Evaluations”

[5] Hypatia Research POV: We encourage use of private social networks for product innovation, lest the competition benefit from social investments.

Great article published by CRM Magazine–and thanks to Marshall Lager for doing the heavy lifting!

We ask the experts where the industry is headed in the new year.

“My assessment is that ‘more scientific’ is highly relative, depending on the perspective of an audience or role,” says Leslie Ament, senior vice president and principal analyst at Hypatia Research Group. “From the line-of-business perspective, [marketing] has certainly become more data-driven, with marketers and others relying on dashboards, lead scoring, and metrics such as customer annual value or lifetime value to inform their marketing strategy and planning cycles.”

At the heart of any modern marketing application, though, is the intelligent use of customer data—the more the merrier. “Multisource information gathering and big data insights will have a positive impact on marketing,” Ament says. “More information often translates into higher model accuracy and confidence levels when analyzing large amounts of information.” Research by Hypatia shows that larger enterprises ($2 billion–plus in revenue) use more than eight information sources when analyzing enterprise data, and rely on this information for a variety of business purposes—marketing being one of them. “In short,” Ament says, “big data analysis techniques may very well improve personalization, accuracy, relevancy, and results for marketers if performed effectively.”

This also points to a change in priorities for marketers, with a shift from tactical goals to strategic ones. “In the recent past, marketers often focused on personal major business objectives, such as number of newsletter clicks, downloads of collateral, social community or Webinar registrations, or conference attendees,” Ament says. “Now that budgets and resources are tighter, we see that marketers are better at justifying their contributions to the organization at a more strategic level. Our research shows that marketers are much better at tracking metrics that align with corporate or business unit goals, such as customer retention, share of wallet, increase in profits, customer engagement and cost reductions.”

Customer Engagement Intelligence Doesn’t Reside Only in a CRM Application: It Lives Throughout & Beyond the Enterprise

When customer relationship management (CRM) software first debuted, it was a miracle. For the first time, companies didn’t have to build a database of prospects and customers to track their preferences and purchases. There it was, efficiently organized. With analytics, companies could see who patronized them the most, and who generated the most profit. That’s why, along with enterprise resource planning (ERP) software, CRM software has become one of the few successful enterprise software mainstays. There’s only one problem: it’s a silo. It’s hard to exchange information with other applications. If enterprise vendors knew how companies were actually going to use products like CRM, they would have built them with better application programming interfaces (APIs). CRM vendors focused on solving one problem – the lack of a great customer database – and accidentally created another one: how to make that information seamlessly available to other applications, and make information from other applications seamlessly available. Customer information, after all, doesn’t just live in a CRM application; it lives throughout & beyond the enterprise.

Aggregating customer data with other applications is not an idle desire: CRM information – those purchases and preferences – has inestimable value. Whether transactional, interactional, historical or behavioral, it can drive insight into marketing, into customer service, into manufacturing, and into logistics. Considered holistically, rather than as a silo, the data in a CRM application can trigger greater insights into which products and services are successful and which are not; which products and services should be tackled next; the potential volume of sales based on stated customer interest; and more.

By suggesting that CRM stop being a silo, we’re not talking about a wholesale reconfiguration of CRM. But think of the CRM application as just one big data mart. It contains lots of information about customers. Just as with any database, companies can analyze that information and leverage the multi-channel intelligence it may contain–social, mobile, structured and unstructured. But then what? How do those insights then drive other activities within the company and without by engaging customers?

That’s where business process management (BPM) comes in. Aggregating BPM and CRM makes both more valuable. By taking a holistic viewpoint, companies can create workflows that trigger responses to customer requests faster than ever before. BPM adds the ability for companies to leverage insight based on both external and internal content and/or data residing in CRM systems, and then take action based on that information. Hypatia Research Group has identified five major categories wherein companies can derive this insight—which represent the maturity levels for software combining both CRM and intelligence-driven BPM. As illustrated in the figure below, maturity levels for software that incorporates CRM and BPM starts simply and becomes more sophisticated.

FIGURE 1: MATURITY LEVELS FOR SOFTWARE INCORPORATING CRM AND BPM

Source: ©2014-2015 Hypatia Research Group. “Next Generation CRM: All About Business Process Excellence.” All Rights Reserved.

Alerts. Employees shouldn’t have to wait to query an application to get information. The system should be smart enough to alert employees when a prized customer (or even a prized prospect) updates information. Furthermore, the source of alerts should go come from beyond the CRM system as well – from social media, from technical support systems, from Web site downloads; in short, from any self-service interaction a customer takes.

Rules. A company with 10,000 customers may not be able to respond to all the alerts a system might create. That’s where rules come in. A company may want to set up a system whereby the customers representing the highest revenue get unresolved questions addressed within four hours. Ditto for prospects representing high potential revenue, while sales or support staff might respond to customers who have made lesser financial commitments within a longer window. The concept of rules can be wonderfully flexible: a company may set up a rule to offer free shipping for a 24-hour period or for certain levels of purchase, and then reconfigure them based on response.

Decision trees. Think of a decision tree as a more-complicated set of rules, an aggregation of if/then/else programming that allows companies to make more granular decisions about handling customer queries, purchases, and complaints. The important facet to remember about both rules and decision trees is their flexibility. For the highest level of agility within BPM and CRM, companies must be able to respond to changing business conditions and adjust their decision tree accordingly. That also means the ability to adjust the decision tree must be simple enough to be intuitive for the highest number of employees.

Advanced analytics. Companies can use the aforementioned capabilities can be used to address the needs of individual customers, but in addition, they must also be able to identify macro trends representing consolidated patterns of activity. For instance, are certain groups of customers delaying purchases? Or are they responding beyond expectations to a new offer? That in turn may trigger the need for increased manufacturing output. Is social media abuzz with comments? The ability to analyze unstructured and structured data together is the basis for big data, a key technology for tracking customer sentiment. Identifying these patterns requires not only applying business intelligence to the CRM database, but enabling the company to channel that information to other related systems.

Guided IntelligenceTM. The goal is to create an aggregated BPM/CRM system that is greater than the sum of its parts, one that allows the input and output of information in a virtuous circle, so that CRM data informs BPM data and vice versa. The result is a more-intelligent system that gives companies the ability to enhance one of the key competitive differentiators: the customer experience. Being smarter about customers not only increases customer engagement, but it has the potential to increase revenues from customers not only satisfied but delighted with the service they’ve received.

To better identify the CRM and BPM vendors that understand and support the importance of the aggregation of both kinds of software, Hypatia Research Group has evaluated a handful of vendors for consideration. For each vendor, we have compiled an overview of their business; a description of their software’s features; and a customer case study. We then provide a summary and recommendations. Source: ©2014-2015 Hypatia Research Group. “Next Generation CRM: All About Business Process Excellence”. All Rights Reserved.