FICO, a provider of predictive analytics and decision management technology, recently announced the results of a survey it commissioned from Forrester Consulting to better understand how companies are investing in improved customer interactions. The survey found that a major shift is underway in how enterprises interact with their customers, yet the respondents see gaps in their ability to understand customer behavior and put these insights to work.
For the study, The Era of Intimate Customer Decisioning is at Hand, Forrester surveyed 266 decision-makers from enterprises with $1 billion or more in annual revenue. According to respondents, the biggest challenge of the next two years will involve advancing from decisions based on big customer segments to decisions targeted to microsegments and ultimately to segments of one. Meeting this challenge will require new customer analysis techniques and automated decision-making.
"Customer experience matters — it is how enterprises will differentiate themselves and compete in the ‘instant economy,’ " said Stuart Wells, chief technology officer at FICO, in a news release. "It is no longer adequate to blindly blast marketing messages to millions of consumers, or to take months to incorporate insights. Customers expect instant, relevant interactions from the companies they do business with, or else they will take their business elsewhere. This is driving a wave of investment in not only analytics but the decision management platforms needed to foster an intimate customer relationship."
Strikingly, more than half of enterprises surveyed take at least three months to change their operational procedures and systems to incorporate new insights about customers gained from analysis. At the same time, only 20 percent are able to target a message to an individual consumer today. As a result, enterprises are prioritizing decision automation technology to enable them to react faster to customer life-changes (such as a marriage, a new job, or the birth of a child), increase profitability, make better decisions, and increase customer relevance in 2013.
Fifty percent of the respondents are investing in decision automation technology today, and an additional 48 percent plan to adopt it in the next 12 months. The survey also found a rising investment in analytic and decision modeling tools (94 percent of companies surveyed will adopt within the next 12 months), decision optimization (88 percent) and predictive analytics (86 percent).
Based on these investments, 60 percent of respondents believe that by 2015 their organizations will move to at least monthly revisions of operational procedures and systems to incorporate new insights about customers gained from analysis. The survey also found that, by 2015, 84 percent of respondents plan to use data analysis to inform at least half of their customer decisions, and over half plan to target messages to individual consumers.
Forrester conducted an online survey of 266 retail, high-tech, insurance, banking and healthcare organizations in Brazil, Canada, China, Germany, India, South Korea, the UK and the US to evaluate the challenges that businesses face in using IT to improve their interactions with customers. Survey participants included decision-makers in the executive suite, application development, marketing, customer experience, business intelligence, master data management, eCommerce and eBusiness. The study began in July 2012 and was completed in August 2012.