Unlock The Promise Of Customer Data - Janrain · Unlock The Promise Of Customer Data ... imperative...

A Forrester ConsultingThought Leadership PaperCommissioned By Janrain

June 2014

Unlock The Promise OfCustomer DataHow Comprehensive Profiles HoldThe Key To Effective Personalization

Table Of Contents

Executive Summary ...........................................................................................1

Current Approaches To Personalization Are Emerging And Sporadic ......2

Myopic And Piecemeal Personalization Outweigh True Data-DrivenPersonalization ...................................................................................................3

Advance Your Personalization Efforts With Deep And ConnectedCustomer Insights.............................................................................................. 6

Key Recommendations .....................................................................................8

Appendix A: Methodology ................................................................................9

Appendix B: Supplemental Material ................................................................ 9

Appendix C: Demographics/Data...................................................................10

Appendix D: Endnotes.....................................................................................11

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Executive Summary

In the age of the customer, individuals are alwaysaddressable — they access information instantly throughmultiple devices that drive dynamic digital behavior andfoster increasingly mobile lifestyles.1 But as their personaltechnologies and expectations evolve in ways unthinkablejust a few years ago, firms struggle to keep up and are oftencaught in processes and technologies designed for asimpler era.

Personalization strategies that address the needs ofindividual consumers based on their behavior,characteristics, and context enable marketers to developand deepen meaningful relationships with their customers.Yet, while firms desire such capabilities, they often struggleto appreciate the magnitude of personalization’s potentialand are daunted by the seemingly arduous steps requiredto achieve it.

In February 2014, Janrain commissioned ForresterConsulting to evaluate marketers’ current practices,attitudes, and future plans regarding marketingpersonalization and customer identification. Then to furtherexplore this topic, Forrester developed a hypothesis thattested the assertion that improvements in customeridentification and profiling — which are often the result ofunderlying recognition technologies — allow for improvedcustomer experience, streamlined marketing execution, andachievement of overall business objectives.

In conducting a quantitative survey of 190 IT and digitalmarketing professionals with responsibility forpersonalized/targeted messaging and digital customeridentity and recognition efforts, along with five in-depthfollow-up qualitative interviews of decision-makers from thesame population, Forrester found that adoption of basicpersonalization techniques is high and that respondentsexpressed confidence in their personalization strategies.However, our interviewees cited siloed customer dataaccess and resource constraints as bottlenecks to optimizedpersonalized marketing. Across the board, respondents

indicated plans to implement or expand their personalizationefforts — for example, using identity recognition to deliverorchestrated experiences — and supporting technologies.

KEY FINDINGS

Forrester’s study yielded four key findings:

› Marketers obsess over acquisition. Even as the linesbetween marketing and customer experience blur, oursurvey respondents prioritize customer acquisition effortsover nurturing and deepening relationships with their mostvaluable and loyal customers.

› Personalization’s potential is not taken seriously.Respondents want to implement or expandpersonalization initiatives and methods, but do not make ita priority. They rank it well below other goals likeacquisition and engagement despite the escalatingimperative to be relevant to and address the needs ofalways addressable customers.

› Customer identification and profile enrichment arecritical to realize the personalization potential.According to our study, the ability to identify customersand preserve their interactions across touchpoints,channels, devices, and platforms are seen as the twocapabilities with the most significant impact on deliveringorchestrated customer experiences. It’s not just aboutidentifying who your customers are, but also about theenrichment of those profiles, with behavioral,transactional, attitudinal, and affinity data derived fromdiverse sources such as social profiles, transactionalhistory, and campaign responses.

› Data management shortcomings slow downpersonalization efforts. Marketers are swimming in datathat, if integrated appropriately, has the potential to paint amore complete picture of customers. Our surveyrespondents and interviewees alike noted considerablechallenges with making sense of and applying data in away that supports modern marketing objectives.

Firms want to deliver 1:1 personalization thataddresses the needs of individuals based onbehavior, characteristics, and context, butstruggle to appreciate the magnitude of itspotential and are daunted by the seeminglyarduous steps required to achieve it.

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Current Approaches ToPersonalization Are Emerging AndSporadic

“I had communicated the value of 1:1communication, and we started doinga lot more inbound marketing ratherthan pushing out and being in themindset that people wanted to hearfrom us.”~ Digital marketing and analytics manager at a computer

software company

The shift from outbound marketing, where firms buy staticadvertising space in individual channels, to inboundmarketing, where relevant and quality content attractsspecified consumers, is not lost on marketers. Yet reactingto this through personalization often seems easier said thandone. As consumers move fluidly through multiple channels,they generate an overwhelming amount of data in multipleforms that is constantly evolving in real time. Determiningwhat technologies and capabilities to deploy in responsecan be daunting. Our survey data indicates a

personalization landscape dotted with new priorities andobjectives, nascent capabilities, and a struggle to moveaway from tried-and-true marketing approaches that don’t fitthe needs of the modern customer. Specifically:

› The lines between marketing and customerexperience continue to blur. In the age of the customer,marketing and customer experience objectivescomplement each other now more than ever. However,departments often struggle to align the interests, priorities,and resources needed to execute on the promise thatgood customer experience offers for marketing initiatives.2

In fact, as evidenced by a digital retail marketing managerat a regional grocer we spoke to, some marketing effortsthat rely on antiquated techniques and technologies cannegatively affect customer experience. “[Currently], thecustomer has to meet us halfway . . .” she explained,“Unless they take initiative, we don’t know what they’relooking for, who they are, or what their shopping habitsare.”

› Basic personalization is prevalent, but datamanagement challenges curb improvements. Themajority of respondents to our survey reported having atleast basic personalization in place today, with 85%agreeing or strongly agreeing that their efforts are basedon broad segmentation and simple clustering to executein individual channels (e.g., search or display), and 83%indicating the same for use of simple business rules andtriggers to execute across digital channels (see Figure 1).Furthermore, implementation of many supporting

FIGURE 1Marketers Rely Primarily On Basic Personalization Techniques

Base: 190 IT and digital marketing professionals with responsibility for personalized/targeted messaging and digital customer identity and recognitionNote: Some bars may not add to 100% due to rounding.Source: A commissioned study conducted by Forrester Consulting on behalf of Janrain, May 2014

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technologies is high, with customer profile datamanagement, web content management, and unifiedlogin/single sign-on technologies leading the pack at 73%,67%, and 63%, respectively (see Figure 2). Despite this,respondents are challenged by data managementpractices, particularly with the analysis and distribution ofdata (see Figure 3).

› Marketers place more importance on data for“traditional” digital channels versus “emerging”ones. While the majority of survey respondents recognizethe importance of customer profile data and its impact onmarketing functions, decidedly more stock is put into theestablished, “traditional” digital channels than theiremerging counterparts. Seventy-six percent ofrespondents rated customer data as “extremelyimportant” or “very important” for website analytics, and75% said the same for email marketing. Conversely, 59%and 67% place the same level of importance on data forsocial media and mobile marketing (see Figure 4).

Myopic And PiecemealPersonalization Outweigh True Data-Driven Personalization

“We haven’t comprehensively delvedinto where we want to be as a largerorganization yet, but there’s appetite[for] and interest in expanding oncapabilities that other marketingdepartments have.”~ Digital retail marketing manager at a regional grocer

Success at personalization hinges on several factors: thechannel or touchpoint where personalization occurs, thedata used to personalize offers and communications,consumer expectations, and the analytical maturity neededto execute. In our study, we found that channel-drivenpersonalization approaches precede a more overarchingdata-driven approach among digital marketers. Here’s why:

FIGURE 2Companies Are Bullish On Marketing Personalization And Targeting Technology Adoption

Base: 190 IT and digital marketing professionals with responsibility for personalized/targeted messaging and digital customer identity and recognitionNote: “No plans to use within 6 months” and “Don’t know” answers were not included in the chartSource: A commissioned study conducted by Forrester Consulting on behalf of Janrain, May 2014

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› The always addressable customer confoundspersonalization efforts. The always addressableconsumer accesses the Internet religiously from variouslocations and devices on a daily basis, which representsan enormous challenge to marketers.3 It’s no longerenough to focus efforts on single and disparate channels.Rather, firms are increasingly tasked to deliver context-relevant messages to individual customers acrossmultiple touchpoints, on multiple devices, over the entiretyof their relationship with the brand as they discover,explore, buy, and engage with them.4

› Marketers fail to emphasize the right success metrics.Marketing does not lack truisms about the value of anexisting customer. Across every type of business,acquiring new customers is more expensive thanmaintaining existing customers. For example, a recentForrester survey of online retailers reported higheraverage order values from repeat customers and amarked increase of repeat customer rates. Further, repeatcustomers form 27% of web retailers’ total customer basebut drive 41% of sales.5 The IT and digital marketers whoresponded to our survey, however, place no more relativeimportance on metrics for retaining and cultivatingrelationships with high-value patrons. In fact, they slightly

FIGURE 3Data Management Impedes Customer IdentificationAnd Marketing Personalization

Base: 190 IT and digital marketing professionals with responsibility forpersonalized/targeted messaging and digital customer identity andrecognitionNote: Some bars may not add to 100% due to rounding.Source: A commissioned study conducted by Forrester Consulting onbehalf of Janrain, May 2014

FIGURE 4Marketers Are Slow To Embrace Fast-Growing, Emerging Channels


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emphasize metrics related to acquiring new customers, arelic of past marketing realities (see Figure 5).

› A dichotomy exists between the desire to orchestrateexperiences and data management sophistication.Respondents to our survey expressed having difficultyacross the board with data management processes. Over83% of respondents indicated at least some challengewith data collection, storage, analysis, and distribution. Inthe face of these challenges, it’s not surprising that only5% consider orchestrated customer experiences as a topgoal.6

› Data is siloed across various departments andfunctions. Our interviewees commonly indicated siloedcustomer data across departments as a barrier toimplementing personalization. “The most advanced dataused in the broader organization is from our credit cardloyalty program that our direct marketing team has accessto, which encompasses point-of-sale (POS) data likepurchase history, but I don’t have access to that,” notedthe digital retail marketing manager at a regional grocer.“The data isn’t centrally managed; it’s team by team. Ourdirect marketing organization is more mature, as theyhave access to more data.” A senior director at a nationalretailer had similar sentiments: “We need to invest in acreating a big data platform.” He remarked, “Right now,

it’s difficult incorporating all the data from the manytouchpoints.”

› Front and back ends are detached. All aspects of datamanagement present some degree of difficulty for surveyrespondents and interviewees. Our intervieweesdescribed specific examples of those challenges, namelythe lack of harmonic front- and back-end data. “Our front-end assets are rarely linked to the back end,” explained adigital marketing director at a large consumer productsmanufacturer. “The connection between them issomething that we’ve tried to establish in the past but hasconsistently broken down . . . There’s a gap here for anintermediary to manage.”

FIGURE 5Customer Retention And Loyalty Take A BackseatTo New Customer Awareness And Acquisition

Base: 190 IT and digital marketing professionals with responsibility forpersonalized/targeted messaging and digital customer identity andrecognitionNote: Some bars may not add to 100% due to rounding.Source: A commissioned study conducted by Forrester Consulting onbehalf of Janrain, May 2014

FIGURE 6Analytics Maturity Falls Into Four Categories

Source: “It’s Time To Raise The Bar With Analytics,” Forrester Research,Inc., August 1, 2013

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› A disconnect exists between actual and perceivedpersonalization maturity. Forrester categorizescustomer analytics practitioners across four levels ofincreasing maturity: rookies, dabblers, pros, and gurus. Atthe highest level, gurus represent firms that apply deepinsights at the individual level in real time and acrossmultiple touchpoints (see Figure 6). But we found a gapbetween how marketers perceive their current maturitylevel and what their actual maturity level is. In our survey,no more than 63% of respondents indicated current useof technologies that support a guru-level of maturity, suchas unified login and registration, customer profile datamanagement, or real-time interaction management (seeFigure 7). Yet, when asked about their confidence infuture plans to deliver orchestrated experiences, 90%reported being “confident” or “very confident” in theirpersonalization strategy.

Advance Your PersonalizationEfforts With Deep And ConnectedCustomer Insights

So how do marketers advance their personalizationstrategies? Start with the following:

› Put the “personal” back in personalization. Given thesheer mass of customer data consistently flowing intodatabases, making sense of all of it and prioritizing theelements that contribute to personalization can bedaunting. Separating the “I do” (behavioral) data andoutlining the actions, tendencies, and affinities of yourcustomers from their profile-centric “I am” (demographic)data is a good starting point. Allowing the former to dictatethe latter, and building an infrastructure that supportssuch, is a simple approach that can set practitioners upfor success.

FIGURE 7Marketers Leverage Disparate And Inconsistent Data Sources, Resulting In Incomplete Customer Profiles


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“The vision is to track user flow andcustomize future interactions to theirbehaviors and create a profile bysourcing from multiple channels.”~ Senior director of digital marketing at a national retailer

› Enlist all data sources to cultivate enduring customerrelationships. Our survey revealed that marketerscurrently rely on a hodgepodge of data sources for theirdigital marketing programs. But there’s little consensus.From campaign responses to social media totransactional or POS data, fewer than 50% ofrespondents utilize any given source (see Figure 8). Suchan approach yields an incomplete understanding of acustomer at best. Most customer profiles start with dataprovided by your customers and their past interactionswith your firm. But that’s just the beginning. The bestprofiles also take into account implicit cues of theiraffinities and preferences deduced from social media and

third-party partners. Tailoring messages and offers basedon these vivid pictures of your most valued customersdeepens their trust and engagement.

› Free your data from its shackles. Data fragmentationand silos represent one of the biggest impediments toachieving personalization goals. While accessgovernance and privacy concerns will continue to preventa truly all-encompassing view of the customer, it isincumbent of firms to make applicable data as usable andaccessible as possible, both through evolved data sharingpolicies and technologies that enable easy flow betweenvarious systems.

› Balance the cool to creepy factor. Customer profilespresent immense opportunity for firms looking to increaseengagement and win in the age of the customer.However, there’s a fine line between catering to needsand intruding on consumer privacy. Practitioners shouldbe careful to put the right processes and safeguards inplace to prevent data (and analytics) abuse.

FIGURE 8No Single Data Source Is Enlisted By A Majority Of Marketers For Campaign Planning And Execution

Base: 190 IT and digital marketing professionals with responsibility for personalized/targeted messaging and digital customer identity and recognitionSource: A commissioned study conducted by Forrester Consulting on behalf of Janrain, May 2014

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Key Recommendations

Forrester’s in-depth survey and interviews with digital marketing professionals yielded several important observationsabout how marketers approach personalization. The road to personalization success starts with customer data andmeans piecing together various elements that define the purpose of personalization and at the same time predictfuture consumer action with precision. In order to do that, Forrester recommends the following actions:

› Put customer identification at the forefront of your personalization strategy. Coherent and insightfulcustomer profiles that incorporate, synthesize, and integrate behaviors and affinities are the base of a successfulpersonalization strategy in the age of the customer. Make the creation and optimization of such profiles, alongwith the processes and rules around their use, a priority. If you’re like most organizations, you will need the helpof various tools to assemble these rich profiles and augment them with third-party data.

› Don’t be territorial about your data. Personalized marketing requires comprehensive data to be available inevery channel. Break down the silos within your organization and allow relevant stakeholders access to variousdata sources as permitted within the boundaries of your company’s privacy policies. If you can’t share data aboutyour own consumers within your enterprise, the lack of coordination will at some point become apparent to yourconsumers, who may unsubscribe and turn their backs on your communications and marketing messaging.

› Make the data work for you. Merely having the data isn’t enough. To make it actionable, front- and back-endsystems must “talk” to each other and deliver the necessary data where it’s needed, when it’s needed. Architectyour personalization technologies to allow seamless access to and utilization of applicable data, regardless of thesource. It’s at this point where investing in data management processes and tools is worth serious consideration.

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Appendix A: Methodology

In this study, Forrester interviewed five and conducted an online survey of 190 IT and digital marketing professionals withresponsibility for personalized/targeted messaging and digital customer identity and recognition efforts in various consumer-facing organizations in France, Germany, the United Kingdom, and the United States to evaluate marketers’ currentpractices, attitudes, and future plans regarding marketing personalization and customer identification. Survey participantsincluded decision-makers in digital marketing strategy or technical roles. Questions provided to the participants asked abouttheir marketing objectives, priorities, investments, satisfaction, and perceptions as they pertain to personalization andtargeting. Respondents were offered a small incentive from their survey panels as a thank you for time spent on the survey.The study began in February 2014 and was completed in May 2014.

Appendix B: Supplemental Material

RELATED FORRESTER RESEARCH

“The Convergence Of Brand, Customer Experience, And Marketing,” Forrester Research, Inc., January 14, 2014

“Five Emerging Methods Advance Customer Analytics,” Forrester Research, Inc., November 1, 2013

“It’s Time To Raise The Bar With Analytics,” Forrester Research, Inc., August 1, 2013

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Appendix C: Demographics/Data

FIGURE 9Survey Respondent Demographics


“In which country are you based?”

“Which of the following best describes your industry?”

“How many employees work for yourorganization worldwide?”

Business or consumer services 22%

Financial services or insurance 17%

Retail 17%

Other 9%

Consumer product manufacturing 9%

Healthcare 8%

Telecommunications 6%

Electronics 5%

Travel and hospitality 3%

Advertising or marketing 2%

Agriculture, food, and beverage 2%

Media and leisure 1%

France16%

500 to 999employees(medium to

large)34%

1,000+ employees(large)66%

Germany27%

United Kingdom24%

United States33%

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Appendix D: Endnotes

1 Forrester defines the age of the customer as: “a 20-year business cycle in which the most successful enterprises willreinvent themselves to systematically understand and serve increasingly powerful customers” and that represents adeparture from the Age of Information that dominated the period between 1990 and 2010. Source: “Competitive Strategy InThe Age Of The Customer,” Forrester Research, Inc., October 10, 2013.2 The financial benefits of a disciplined approach to CX are clear: Customer experience leaders outperform the stock marketby a significant margin. But rather than taking a holistic view of the customer’s relationship with the brand, marketing remainsstuck in messaging mode due to disconnects between brand and CX strategies, unclear division or roles and responsibilities,and poorly aligned objectives and measurement. Source: “The Convergence Of Brand, Customer Experience, AndMarketing,” Forrester Research, Inc., January 14, 2014.3 Forrester defines the always-addressable customer as someone who owns and personally uses at least three connecteddevices, accesses the Internet multiple times per day, and goes online from multiple physical locations, at least one of whichis “on the go.” Source: “The Always Addressable Customer,” Forrester Research, Inc., September 26, 2012.4 After more than a century of providing the basic framework for marketers to think about customer persuasion andengagement, the marketing funnel fails to represent that far more complex landscape that 21st century consumers andmarketers face. Source: “The Customer Life Cycle: A Blueprint For Customer-Obsessed Enterprises,” Forrester Research,Inc., April 14, 2014.5 Source: “The State Of Retailing Online 2013: Key Metrics And Initiatives,” Forrester Research, Inc., January 25, 2013.6 In our survey, respondents were asked to rank their top three goals as a digital marketer today. A low of 5% cited both“orchestrated personalized customer experiences across multiple touchpoints” and “generate customer insights andintelligence,” in contrast to a high of 20% who cited “acquire new customers.”

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