3 New ways to Improve and Understand your Customers Experience

Thought Leadership White Paper
IBM Commerce IBM Customer Analytics
Three New Ways to
Understand and Improve
Your Customers’
Experience
Insight into customers’ journeys drives meaningful
engagements and revenue
Introduction
Today’s customers expect brands to know them and to anticipate what
they want—and when they need it. They expect positive experiences and
personalized service on demand wherever and whenever they interact
with an organization.
But with interactions taking place across multiple channels,
applications and devices, it is not easy for organizations to connect
the data dots of a customer’s journey. Seeing the whole picture of
customer experience trends can pose a challenge. Without this broad
view, organizations might have difficulty identifying opportunities or
addressing potential problems in a timely manner.
But when it comes to analyzing the entire customer experience, what
does the right solution look like?
An optimal solution should reveal how customers are interacting across
channels and devices, so organizations could see the actual buying
experience through the customer’s eyes. The right analytics solution
should provide rich capabilities for understanding customers better so
they can be engaged in more meaningful ways.
An effective solution should:
• Provide the ability to perform root cause analysis into customer
behavior
• Enable visualizations of the customer journey across channels
• Deliver the ability to easily pivot from one type of analytics to
another to find out what is happening, understand why it is
happening and determine the impact
Contents
1 Introduction
2 The Customer Experience Gap
3 Three New Ways to Understand
Customer Experience
6 Analytics That Grow with You
6 Improve Business
Competitiveness with Integrated
Customer Experience Analytics
6 Learn more

2
The Customer Experience Gap
Organizations are on a quest to improve the customer
experience. They are making it a top priority: 89 percent of
companies expect to compete mostly on the basis of customer
experience.1
Even with such an important goal, many
organizations find it hard to achieve.
There is often a gap between what the organization perceives
and what the customer experiences. A 2015 IBM study
reported that 81 percent of consumer brands surveyed claim
to contextually understand their customers, but only 38
percent of customers agreed with this assessment.2
From the customer’s perspective, a great experience
interacting with an organization appears to happen easily and
effortlessly. But for the organization, a great experience
requires deep knowledge of customers and proper
management of customer engagement using the right tools
and capabilities.
Why is There a Customer Experience Gap?
There are three main causes behind the customer experience
gap.
• Data is fragmented across many systems
• Analytical tools are not well integrated
• Organizations operate in siloes
Organizations can no longer afford a fragmented view of their
customers. Research shows that a majority of customers take
more than one sales avenue: 56 percent of customer
interactions happen during a multi-event, multichannel
journey.3
Analysts need an integrated view of the omni-
channel customer experience to understand the whole
journey. The objective is not to understand the customer
interaction on any single digital property, but to focus on
people as they move through the overall buying process.
Moreover, today, analysts work in multiple tools to answer the
questions they have about their customers’ experience. They
have a web analytics solution that helps to answer what is
happening on digital properties, and a separate tool for
mobile. Perhaps they have invested in customer behavior
analytics, or voice-of-the-customer solution to help them
understand why things are happening. And likely, they are
exporting data from these tools to a spreadsheet to calculate
the impact. Working in multiple tools makes it difficult and
time consuming to answer questions about the experiences
your customers have, ensuring you don’t have the timely
insights needed to exceed their expectations.
And finally, delivering a superior customer experience is a
function that spans all customer-facing departments within an
organization. Many organizations use analytic tools and
capabilities that are highly siloed and departmentalized. Sales,
marketing, e-commerce and customer service departments
often have their own separate analytics and data sets. For
example, e-commerce information might be siloed within a
customer experience or e-commerce solution. But when the
e-commerce department is performing a customer retention
analysis and wants to look at customer longevity, loyalty and
buying cycles, the marketing data becomes critical. Likewise,
if the marketing group wants to examine the buying journey
for high-value customers, it needs customer relationship
management (CRM) data to determine which customers are
most profitable.
In the past, to overcome these three challenges,
organizations manually aggregated data to piece together a
complete picture. They conducted extensive internal work,
spending time and resources they would rather dedicate to
actually performing analysis and gaining insight. Many
companies export data from various data silos into a
spreadsheet, where analysts conduct one-off analyses to
answer specific questions. That approach is inadequate for
solving today’s complex problems.
Connected Consumers
Today’s digital consumer is more connected and more
empowered. An average digital consumer:
Owns 4 devices
Consumes 60 hours of digital content
per week4
According to a Pew Research
survey, more than half of
respondents (52 percent) use
two or more social media sites,
compared with 42 percent in
2013.5
2015
2013
52%
42%

3
Three New Ways to Understand Customer
Experience
Organizations need to understand the online customer
experience. To effectively do this you need ways to quantify and
visualize the customer journey individually and in aggregate—
across devices, channels, time and touchpoints—to pinpoint
improvements that will drive customer acquisition, customer
retention, revenue and sales. There are three key capabilities
needed for effective customer experience analytics:
• Ability to deep dive into customer behavior for root cause
analysis
• Ability to visualize the customer journey across channels
• Ability to easily pivot to find out what is happening,
understand why it is happening and determine the impact
Analyze customer behavior to understand root causes
Organizations are facing tremendous pressure to increase
revenue and reduce costs. They must go beyond customer
attraction to seek ways to gain clear visibility into why
customers abandon key business processes, such as checkout,
site registration, bill pay, and mortgage applications. Is it an
application or system issue, poor site usability, or a mediocre
offer that is affecting customer experience?
To truly understand customer behavior you need the ability to
see your digital and mobile channels through the eyes of your
customer by replaying customer experiences. But replaying
every session isn’t feasible. And sampling isn’t reliable. You
need to automatically identify when customers experience
issues and struggles, so you can proactively investigate to find
the cause and take action to both fix the problem and follow
up with affected customers. For example, an invalid
promotional code caused several customers to abandon their
carts halfway through a purchase transaction.
Customer behavior analytics can provide the insight into
individual customers and segments of customers so you can
get at the root cause.
Customer Experience Analytics in Action: Improving
Conversion Rates
A major retailer is gearing up for the launch of version 2.0 of an
exciting new smart watch.
The challenge
To meet the aggressive target of increasing revenues by
10 percent in a very competitive market, the marketing team
decides to develop a multichannel campaign and target
customer segments based on engagement preferences.
The solution
The marketing team uses IBM® Customer Experience Analytics
to look at all the touch points and channels that led to
successful conversions in the initial smart watch launch.
The team can see the most common journey, the journey that
led to the highest revenue path, and the journey that led to the
shortest conversion path. This is invaluable input for designing
a successful campaign.
The outcome
A few days after launch, the marketing team logs into IBM
Customer Experience Analytics to check the results. Traffic is
up and customers are adding the smart watch to their shopping
cart, but conversions are down.
From within the same solution and interface, the marketing
team identifies which customer segments are not converting.
They drill directly into sessions and discover that a promo code
entered by customers is not being accepted by the system.
The team wants to know where this bad code came from. They
examine the entire customer journey and discover a typo in the
promo code distributed on Facebook.
The team quickly takes action to fix the issue on Facebook.
They identify the segment of customers who experienced the
code denial and follow up with a personalized message
apologizing for the error and providing the correct code.
Once the code is fixed and the follow-up messages are sent out,
the team sees their conversion rate return to expected levels.

4
With visibility into each and every customer’s digital and
mobile experiences, organizations can enrich engagement,
reduce struggle and prevent churn to deliver superior
experiences that keep customers coming back for more.
Organizations that invest and act on insights in the best
interests of their customers will be equipped to maximize
engagement and sales by offering products and content
specifically tailored to what they know about each customer
in terms of demographics, past buying behavior and current
context.
Visualize customer journeys across channels
It is also important for organizations to connect customer data
to gain visibility into the entire customer journey. Customer
interactions can be understood as one continuous progression
across devices and channels, but only if data from each
touchpoint can be connected and used together.
Suppose a digital analytics user in the sales department notices
the conversion rate is going down but has no idea why. If this
analyst continues to operate in a silo without a view to what is
happening in other channels, further exploration of the
problem will be incomplete. But with the ability to tie data
together across the entire journey, the analyst gains a more
holistic view of factors impacting a drop in conversion,
whether it’s poor user experience on the site, or the fact that
conversions are happening in a physical channel.
The key to solving this challenge is to make it easy to stitch
together data from diverse sources such as social, mobile, call
center, store and website, and then surface views of the
journeys customers actually took, in a visual, consumable way
that answers key questions such as:
• What is the shortest path to conversion?
• What is the most common path to conversion?
• What path yields the most revenue?
• How does activity in one channel impact conversion in
another?
This insight enables organizations to replicate successful
journeys, and pinpoint activities that drive conversion,
revenue and loyalty.
Most organizations—and solution vendors—concentrate on
one aspect of the customer journey, such as digital marketing,
mobile, social or store. IBM is uniquely focused on bringing
together the entire customer experience and providing a
holistic view of customers that can increase insight and deliver
a relevant, personalized customer experience.
Customer Experience Analytics in Action: Generating
Increased Revenue
Kathy, the customer marketing director at a financial firm, is
tasked to increase her company’s high-value customer
segment revenue by 45 percent in the next 12 months.
The challenge
This is an aggressive goal that will require new actions. Kathy
partners with the director of demand generation, José, to
better understand—and improve—the buying journey of high-
value customers.
Kathy and José turn to IBM Customer Experience Analytics,
which allows them to see how these customers interact with
the company’s digital assets and sales channels over time.
The solution
• José starts his investigation by identifying the steps
customers took just before creating a high-value account
with the firm. He looks at the five most commonly traveled
journeys that ended in success and analyzes the data.
• He notices that half of all high-value customers were acquired
when email outreach was combined with a live-person
interaction through a phone call or a chat console.
• Comparing the email messages for those who engaged in a
phone call or chat versus those who did not, he notices the
actual offer within the email was for a “free investment advi-
sor consultation.”
• Those who took advantage of the free consultation
offer immediately contacted the firm’s customer
support department.
The outcome
José works with his team to make the free consultation a
permanent offer, while Kathy submits a plan to increase call
center staff by 30 percent and train them in issues and
responses targeted to high-value customers.

5
Unified analytics
To improve customer engagement, organizations need a
holistic view of the factors that influence a customer’s
interaction with their brand. For instance, to improve mobile
sales conversions, a single analytic tool can only point to where
the problem is. However, the organization needs to investigate
and understand the root cause: Is there a problem with the
products or the offers? If analysis shows that many buyers using
the company’s mobile app are abandoning their shopping carts
during a five-step purchasing process, the solution may be as
simple as shortening the process to three steps.
Many analysts currently cobble together a holistic view of
their customers using multiple analytics tools. In one tool,
they can identify trends, but can’t drill down into the
customer journey to see what is causing the trend. In another
tool, they may have a great view of what is happening on the
company’s website, but cannot identify the conversion
struggle experienced by mobile customers.
Figure 1. Elements of unified analytics.
Uniﬁed analytics
IBM offers a single interface so analysts can pivot
between views to ﬁgure out what is happening,
why it is happening and what the impact will be.
Customer behavior analytics capabilities
Journey analytics capabilities
Web analytics capabilities
Instead, analysts need to be able to zoom in and out of an
analytic view, or pivot from one type of analytics to another.
The process could start with an overall view of the customer
buying journey across devices, channels and time. The analyst
could use aggregate trends to identify the most common
routes that people take to a purchase. From the aggregate
trends, the analyst could drill down to understand a single
person’s journey and their specific struggles. The analyst
could then move to digital analytics to analyze a particular
customer segment. Ideally, all of this would be accomplished
with one login and within one environment, using a unified
analytics workbench (see Figure 1).

6
Digital analytics
Social media analytics
Behavior analytics
Predictive analytics
Journey analytics
Cognitive computing
Comprehensive customer analytics capabilities from IBM
Simple Sophisticated
Figure 2. IBM offers a full set of tools to understand customer experience and sentiment.
Analytics That Grow with You
With the integrated IBM approach, organizations have
one data architecture and one place to look for analytics
solutions. IBM Customer Experience Analytics is modular
in nature, so organizations can adopt what they need today
and add additional features as necessary. The
comprehensive set of IBM tools includes advanced
capabilities such as predictive analytics and cognitive
computing for forecasting, learning and refining the most
meaningful ways to engage a customer (see Figure 2).
Improve Business Competitiveness with
Integrated Customer Experience Analytics
A well-designed, holistic approach to customer experience
analytics can provide the insights brands need to enhance
their competitive position through dynamic, user-driven
experiences and highly personalized, responsive service.
Organizations can quickly adopt new customer engagement
approaches in today’s rapidly evolving market through
connected sharing of customer data. A complete view of
customer interactions can deliver profound business benefits
for your organization, from reduced operating costs and
more effective customer acquisition to higher customer
satisfaction and increased revenue.
Visit ibm.com/customer-analytics to learn more about customer
experience analytics and the integrated IBM approach.

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© Copyright IBM Corporation 2016
IBM Commerce
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Produced in the United States of America
April 2016
IBM, the IBM logo, and ibm.com are trademarks of International Business
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and service names might be trademarks of IBM or other companies. A
current list of IBM trademarks is available on the web at “Copyright and
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This document is current as of the initial date of publication and may be
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WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED,
INCLUDING WITHOUT ANY WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE
AND ANY WARRANTY OR CONDITION OF NON-
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are provided.
1
Sorofman, Jake. “Gartner Surveys Confirm Customer Experience Is the New
Battlefield.” Posted October 23, 2014. Gartner. http://blogs.gartner.com/
jake-sorofman/gartner-surveys-confirm-customer-experience-
new-battlefield
2
IBM Econsultancy. “The Consumer Conversation.” April 1, 2015.
http://ibm.co/1ahzETg
3
McKinsey Company. “Customer Journey Transformation.” September
2013.
4
Nielsen. “The U.S. Digital Consumer Report.” February 10, 2014.
www.nielsen.com/us/en/insights/reports/2014/the-us-digital-consumer-
report.html
5
Pew Research Center. “Social Media Update 2014.” January 9, 2015.
www.pewinternet.org/2015/01/09/frequency-of-social-media-use-2
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