The Customer Data Revolution Andreas S. Weigend, PhD Stanford University
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Transcript of The Customer Data Revolution Andreas S. Weigend, PhD Stanford University
© people & data | www.weigend.com Andreas S. Weigend, Ph.D. 韦思岸教授
SPECIESNoordwijk, 03 February 2009
The Customer Data RevolutionAndreas S. Weigend, PhD
Stanford University
This is superseded by Canalys
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0 SPECIESS
SPECIESS: What do we do? Service Partner Ecosystem Conference to Increase End-customer Sales and Satisfaction
What would Amazon.com do? What do I do?
Teach, Consult, Speak People and Data Marketing 2.0: People have changed! Impact of changing economics of communication: Individuals, society, and business Attitude to information access has dramatically changed. Contribution Business: You enable future of work: Single person, fraction of a person
WWAD
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0 How can you get business insights?
Myth: At the beginning, there is data. And then you create actionable insights
Analysis is good to help us create hypothesis
WWAD?Measurement and data-centric culture? Yeah. But more importantly:Experiment centric culture
Instead: Ideas (“Hypothesis”) Actions Experiment DataReverse the direction?Data Ideas … Ideas DataIterate (“f-word”)Institutional learning, not random experiments
WWAD
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0 You want to be PHAME-ous!
Phishing
•PHAME Problem Hypotheses Action Metrics Experiments
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0 You want to be customer centric
Yeah, yawn, but what does that really mean?
To support customers in their decision making Where is your organization?
Mini case: Vodafone Incredulous [Video] Metrics gone wrong
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0 Customer centricity: Help people make decisions
Cost saving phone trees “Government award”
WWAD? Play with reversing the direction of information flowOLD: What can the ISP do for the user?NEW: What can the customer do for the ISP?
Customers do want to communicate with the company!!Not just be communicated at!What are their expectations?It should be as easy as hitting up their friends, and they should listen!
WWAD
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0 Conversations
Conversation / CommunicationBetween whom?
Company
Individuals
down
cast
ing
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0 Leverage the social graph
Example: New communications service US phone company with deep experience with targeted marketing Sophisticated segmentation models based on experience, intuition, and
datae.g., demographic, geographic, loyalty data
• Hill, S., F. Provost., and C. Volinsky.Network-based Marketing: Identifying likely adopters via consumer networks.
Statistical Science 21 (2) 256–276, 2006• .
Response increases by a factor of 4.82 by marketing to nearest neighbors (NN)
From 0.28% based on segmentation, to 1.35% based on social graph
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4.82
2.96
0.4
Non-NN 1-21 NN 1-21 NN 22 NN nottargeted
(0.28%)
(1.35%)
(0.83%)
(0.11%)
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0 Recommendations 2.0
•People Friends
Specific people you knowViral marketing
PeersFans (G-star)
ExpertsFashion bloggers
•Data Clicks
Purchases
Forward, tell a friendRelationship
AnnotateAttention
SearchIntention
LocationSituation
Product data
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0 A data revolution, not a software revolution
Mapping companies did not realize that users can add value…Example: NAVTEQ acquired by Nokia for USD 8.6B in Oct 2007 spent USD 300M to reach breakeven 1000 employees driving with GPS… … vs 100M GPS-enabled Nokia phones alone sold in 2008
…vs Amazon.com realizing early on that users can add valueE.g., by reviewing books
… vs Google enabling external developers to build services using company’s data
Q: When will airlines, banks etc follow?
WWAD
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0 We-Business
Myth: Company is in charge1. Owns customer 2. Owns product3. Owns brand
WWAD? Customer supported customer support getsatisfaction.com: “Customer service is the new marketing”
Platform where everybody can contributeSmart relevance functions use user data and decide what bubbles upIf some reseller is really good, they will soon be on top because people constantly give implicit (clicks) and explicit feedbackAll: Reputation systems, incentive to not give positive feedback after positive experiences with suppliersOpening upLayers
WWAD
We-Business
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0 Customer Network Value
MYTH: Unique users matterFrom newspaper copies soldFocus on engagement (from pages / browsers / people)
WWAD? What actually matters iswhat they do (1st order), andwhat they tell others (2nd order)
Strong and weak virality
Communication and connectivityIncentivesExample: Amazon Share the Love
Phone company case / Recommendations
WWAD
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0 Marketing 2.0
OLD: The 4 Ps of marketingProductPlacementPricingPromotion
NEW: Ecosystem Marketing Design interactions with and between your customers empowering
them to create valueFor themselvesFor other customers, and thus:For your firm
Other termsFeedback MarketingConversational Marketing
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0 Where is the conversation?
Call 800-4-SCHWAB Where are the conversations
With other customers With customer service With “the brand”
WWAD? Design the ecosystem such that the whole is more than the sum of its parts
WWAD
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0 Reputation. Relevance. Respect.
Reputation is based on sequence of interactions Reputation is a shortcut in decision making
Relevance Reputation Respect
Instrument the world: Design system for interactions
Create an ever growing pool of data which creates value for
you and your customers
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0 My camera and microphone
Adobe Flash installed on approx 1 billion connected computers and mobile devices
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0 What really has changed?
Attitude of consumers / customers to information they are creating and sharing
Both about themselves…Hopes, dreams, and fears Knowingly and unknowingly
and their relationshipsTagging someone in a picture
Need for Data StrategyExample: DopplrAmazon Wishlist
But just data isn’t all: Focus on experimentsAlgorithms have reached ceilingData now key differentiator
• (incl company learning, richer data to power recs for others)
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0 Summary (1 of 2): Me-Business
User focus (“E Me”)User is at the center of Web 2.0(not the company)CMR (Customer Managed Relationships) or VRM (Vendor Relationship Management) (not CRM, Customer Relationship Management)
System engineered for feedback (“Instrument the world”)System engineered to improve over time by leveraging user data (not deteriorating over time)
Network effects (“Viral marketing”)Demand-side economies of scale (not only supply-side economies of scale)
Data strategy (“Users create value”)Google Maps: Make it easy for outsider to use and enrich the data (not increase security)
Why? Spreading memes and genesBelonging, immortality, self-interest (e.g., file sharing sites)
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0 Summary (2 of 2): The Customer Data Revolution
1. Sniffing the digital exhaustMainly implicit data, some explicit dataWhat is new? More data sources, esp. location data
• 100GB per person on the planet
2. Individuals talk about themselvesMainly explicit contributions
3. Individuals reveal relationships with othersDirected, asymmetrical, multidimensional (not binary!)
The Customer Data Revolution: Shifting expectationsAttitude of individuals to their informationEconomics of data
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0 Discussion
What are the implications for you?Do experiments: Measure interactions in an instrumented world Example: MrTweetLong-term focus: relationship focus
Trans-action
Inter-action
s
Relation-ships
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0 Thanks
Thanks to: Kimmo Alkio Antti Reijonen Mari Huhtiniemi … and all of my friends in the F-Secure Family!
Plus: Ted Shelton (The Conversation Group) Mingyeow Ng (just follow MrTweet on twitter!)
More information:
www.weigend.com