Cognitive Future In Customer Engagement

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A New Era of Thinking

© 2016 IBM Corporation

Cognitive Future in Customer

Experience

A new era of thinking

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2 | A New Era of Thinking

Cognitive Computing in Enterprise

Putting Cognitive Computing to Work

Adoption Challenges to Consider

Charting the Way Forward

Welcome to the Cognitive Era

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We all know this

“The last, best experience that anyone has anywhere becomes

the minimum expectation for the experiences they want

everywhere.”

– Paul Papas, Global Leader, IBM Interactive Experience

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of companies say they

have or are close to

having a holistic view

of their customers

of consumers say

their favorite retailer

understands them

Source: The Consumer Conversation – eConsultancy Report

The Great Customer Experience Divide

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Advancements in technology and their convergence are creating unprecedented

opportunities to improve customer experience and stay relevant

Source: 2015 Retail Outlook, page5. http://www.cit.com/wcmprod/groups/content/@wcm/@cit/documents/images/2015-retail-outlook-report.pdf

CONSUMER INDUSTRY Social

Mobile

Cloud

3-D PrintingInternet

of things

Analytics

Organizations must adopt new technologies and embrace new operating models to stay relevant

The consumer industry is vulnerable to disruption

5x

58% of retailers predict that brick – and –

mortar only stores will not survive in

future1

72% believe one or more prominent

retailers will likely disappear in the next 1-3

years, or at least decline in value1

Cloud

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Harnessing these technologies are critical to overcome the challenges a

consumer industry faces today

Customer expectations

Self-serve retail

Technology progress

Eroding margins

Security breaches

Falling margins and returns for shareholders

Expanding customer expectations fueled by awareness around technology

Rising instances of identity theft and credit card

fraud

Increasing self-serve retail, and customers taking

greater ownership of their consumption journey

Accelerating technology progress, redefining

the way people and organizations interact

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Data that’s

coming

Customer records

Transactional systems

Predictive models

Institutional expertise

Operational systems

News

Events

Geospatial

Weather

Social media

Internet of Things

Sensory data

Images

Video

Data outside

your firewall

Data you

possess ++

Structured and active Unstructured and dark

Digital Intelligence is your competitive advantage to uplift your customer

experience

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Three distinct areas of focus to create a differentiating customer experience

using digital intelligence

Provide better

collaboration between

with suppliers, partners

and customers and

enables seamless

experience across

channels

Engage DecideDiscover

Provide ability to digest

vast amounts of data to

identify new avenues and

implement new ideas

Provide contextual,

evidence-backed

recommendations, with

changing business

models, cost structures

and customer behavior

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Data sources

Call center

Web

Mobile Apps

Transactional

data

Customer

interaction history

Customer

demographic data

Twitter

Weather

Location

Multiple customer

touchpoints

SMS

E-mail

Direct mail

Chat

Call center

Social

Mobile Apps

Web

IBM’s Predictive customer analytics provide the foundation for customer centricity

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IBM Behaviour Based Customer Insight delivers intelligence by industry

Behavior-based Customer Insight for Banking

Behavior-based Client Insight for Wealth Management

Behavior-based Customer Insight for Telecommunications

Behavior-based Customer Insight for Insurance

Behavior-based Audience Insight for Media & Entertainment

Customer Experience Analytics for Telecommunications

Behavior-based Fan Insight for Media & Entertainment

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Only cognitive unlocks the potential in all data

Think of all that has been

accomplished using only

a fraction of the

available data

Unlock the

possibilities. What answers lie in the 88% that is dark?1

By the year 2020, about

1.7 MB of new information

will be created every

second, for every human

being on

the planet.2

SOURCES cited in notes

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Cognitive systems are fundamentally different from what you have today

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Adapt and make sense of all data;

“read” text, “see” images and “hear”

natural speech with context

Understand

Reason Interpret information, organize it

and offer explanations of what it

means, with rationale for the

conclusions

Learn Accumulate data and derive insight

at every interaction, perpetually

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Programmable computing responds to requests and makes determinations, analyzing data according to predefined parameters.

Cognitive

systemsinteract with humans

naturally to interpret data,

learning from virtually every

interaction and proposing

new possibilities through

probabilistic reasoning.

Cognitive systems differ from traditional analytics

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Cognitive computing can augment or supplement these offerings to enrich the

consumer and user experience

Engage DecideDiscover

Source: IBM Institute for Business Value Analysis 2015

Expert assistance to

human users

In natural language

context- and evidence-based reasoning

discover insights far above human levels

Discover patterns and connections

Generates hypothesis and validates theories like experts

Offers evidence-based

recommendations

Evolves continually towards more accuracy based on new information, outcomes, and actions

Provides traceability to audit why a decision is made

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Cognitive systems adoption in industry is happening at three different levels

Industry transformation through moon shot

application of cognitive technologies

Deep Industry

expertise

Customers and Ecosystem partners leverage

Cognitive functional APIs on IBM Development

platform (Bluemix) to build new capabilities or

enhance existing solutions

Cognitive function

APIs

IBM product suite including solutions like

Behaviour Based Customer Insight enriched with

Cognitive technologies

Embedded in

software solutions

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Bumrungrad International Hospital – Elevate the ability of physicians

The vision

We can improve the effectiveness

of Bumrungrad oncologists

overloaded with patients and

strapped for time to customize

treatments based on the latest

medical research.

The disruption

The expertise of the very best

oncologists from Memorial Sloan

Kettering is now in the hands of

physicians.

The result: More than one million patients received more informed,

personalized treatment plans.

Patient data Memorial Sloan Kettering

cancer expertise

IBM Watson for

Oncology+ +

Decide

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Growing library of cognitive functions that enable understanding, reasoning, and

learning to enhance, scale and accelerate human expertise

20152014 2016

© 2016 International Business Machines Corporation

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EMPOWERED

ADVISORS

TRANSFORMED

INTERACTIONS

OPTIMIZED

OPERATIONS

Self Service Reduce call center volume & expense, improve customer satisfaction

Digital Virtual Agent Increase success rate of online transactions results in increased sales

Call Center Rep Assist Decrease call durations/transfers. Consistent and accurate responses

Knowledge Advisor Improves knowledge of best practices

Sales & Service Advisor Increased effectiveness of sales and service

Wealth AdvisorImproves effectiveness of wealth advisors through more complete

understanding of clients

Relationships & Impacts Hypothesis free discovery of casual relationships the possible impacts

Underwriting Reduction of underwriting expenses, consistency of decision making,

democratization of experience

Regulatory Policy

Compliance

Reduced time and expense incurred in meeting regulatory and

internal requirements.

Use Case Value Proposition

Banking usage categories with Watson API’s

© 2016 International Business Machines Corporation

Engage

Decide

Discover

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Retailers can leverage cognitive to guide shoppers and provide a delightful

personalized experience

Retailers use cognitive to

understand shoppers behavior,

search intent and guide them

with personalized advice and

accurate product

recommendation

Retailers need to provide

better shopping experience

to customers by guiding

them in their shopping

journey and providing

personalized experience

Retailers get deep insights

using data from disparate

sources that helps them to

provide highly tailored

experiences to the

customers

BENEFITSOLUTIONNEED

Source: See notes

Engage

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Retailers can use cognitive to have a complete view of customers across

demographic, affinity, and personality insights

Retailers use cognitive to

analyze diverse types of

customer data (e.g.,

psychographic, behavior,

purchase etc.) in constructing

360°view of customers and

finding personality insights

Based on the personality

type and segments, retailers

can run campaigns and

promotions effectively

BENEFITSOLUTIONNEED

Retailers do not understand

their customers thus struggle

to create campaigns and

promotions that target right

segment of customers and

maximize return on

investment. Source: See notes

Discover

Visualization of Personality data

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IBM Watson Trend – Gift guide to holiday heroes

Engage

Driven by the power

of Watson

ibm.com/watsontrendhub

IBM Watson Trend

IBM is putting the cognitive power of Watson into the hands of shoppers this holiday season with

the IBM Watson Trend app.

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Key Metrics

Attrition Rate New Customer Acquisition Products per Customer

FiltersTree Map – Predicted Events

Regional Management Dashboard

Easy Going Highway Warriors OtherFamily Feud Hi Fliers Homebodies Students

Enhance capabilities of existing solutions through cognitive adoption

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Regional Management Dashboard

Customer Insight Dashboard

Enhance capabilities of existing solutions through cognitive adoption

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Game to infuse Cognitive in Fashionista?

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There are three critical factors for cognitive computing success

Lay the foundation Manage the changeDefine the value

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Find the right

opportunities

For cognitive

Define the value

proposition and

chart a course

for cognitive

Be realistic about

value realization

Invest in specialist

human talent

Build and ensure a

quality data corpus

Consider impacts,

business

processes, and

policy requirements

Ensure executive

involvement along

the cognitive journey

Communicate the

cognitive vision at all

levels

Continue to raise

the cognitive IQ level

of the organization

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Organizations should follow a structured road map that nurtures optimism

and reduces complacency

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Chart the course• Identify candidate opportunities across mission and functional areas

• Define business benefits case

• Develop organization’s cognitive computing journey/road map

Experiment• Prototype use cases

• Test and validate use case scenarios with users

• Test business case hypotheses

Develop and train• Develop and train the system

• Build and improve required

corpus

• Train and educate solution end

users and the organization

Deploy, explore

and evolve• Deploy baseline solution

• Continuous learning and

corpus improvement

• Further use case

exploration

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Key takeaways

Cognitive computing is coming of age and finding commercial applications across

industries to enable improved engagement, discovery and decision support.

Cognitive computing use cases are evolving through industry specific applications

or through adoption of functional APIs.

Cognitive computing adoption in enterprise calls for an experimentation approach

with rapid prototyping and testing before investing in development and training.

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28 | A New Era of Thinking

Learn more:

• IBM Analytics Solutions: http://www.ibm.com/analytics/ae/en/

• IBM Marketing Solutions: http://www.ibm.com/commerce/ae-

en/marketing/?lnk=WH_marketing

• IBM Customer Experience Solutions:

http://www.ibm.com/commerce/ae-

en/customeranalytics/?lnk=WH_customeranalytics

http://www.ibm.com/analytics/ae/en/

http://www.ibm.com/commerce/ae-en/marketing/?lnk=WH_marketing

http://www.ibm.com/commerce/ae-en/customeranalytics/?lnk=WH_customeranalytics