1.
MOMENTS
MATTER
Deliver Superb Customer Journeys
with Smarter Commerce
by Maria Winans
The connections,
insights, innovations
and experience that
matter for Smarter
Commerce

2.
CONTENTS
Moments Matter: Deliver Superb Customer Journeys with Smarter Commerce!
Smarter Commerce Matters
Innovation Matters
Insights Matter
Experience Matters
Connections Matter
Copyright

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Moments Matter: Deliver Superb Customer
Journeys with Smarter Commerce
Maria Winans
Since IBM launched its Smarter Commerce initiative three years ago, we’ve seen
companies across industries transform the way they buy, market, and sell products
and services.
Why? Because they’re learning that the consumer—and we’re all consumers—is
increasingly in charge. And every moment counts in the battle for customer loyalty
and share of wallet.
I can’t tell you how many times I’ve met with one of our clients and have heard that
very phrase, “every moment counts.” And yet, people often reach out to me asking
for a moment of my time. The request for just a “moment” is meant to convey, I
think, a general acknowledgement that time is precious and that the person asking
only requires the teeniest bit of mine. But I also think the expression wrongly
conveys the notion that moments—because they’re small and often fleeting—don’t
really amount to much.
Moments matter. In fact, moments matter a lot.
Every single moment is an opportunity to meaningfully engage with an individual.
But here’s the catch: moments matter only when they’re relevant to you. Nobody
wants to be dumped into a market segment and made to feel indistinguishable from
the 30,000 others in an email database, right? And I couldn’t care less about a
special promotion for a product that doesn’t interest me. These kinds of campaigns
give marketing a bad name and too often feel like an intrusion on my time.
That’s why I constantly tell our clients that amassing more data is not the point. The
point is to use that data to drive meaningful, people-centric engagements—which is
just another way of saying that you need to make every customer touch point matter
to them. I love the idea of using big data to drive a more tailored and intimate
relationship with your customer. Small details can turn into a very big story and
very big profits in a hurry.
If you need further evidence that moments matter, consider our growing need for
instant gratification. Instant gratification is a way of concisely saying, “I’ll give you
precisely one second of my time, and in return you’re going to knock my socks off.”
Yes, knock my socks off. Jaded consumers that we are, we’ve come to expect
superlative experiences. But as business leaders we struggle to deliver this experience

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in a reliable and scalable fashion. Whether delighting a customer in real time,
reaching new markets, or collaborating instantly with partners and suppliers across
the world, enterprises must exceed expectations (because “good enough” simply
doesn’t cut it anymore) to achieve a competitive edge. And it’s not just about speed,
it’s about the experience.
Think about that: you have seconds to deliver to your customer the precise product
she wants, in the manner she wants to receive it, all while making her feel good
about the purchase by delivering exceptional service. Your customer is calling all of
the shots. Our 2013 Global C-Suite Study, The Customer-Activated Enterprise1, spells
this out in black-and white: CEOs say that customers come second only to the C-Suite
(and therefore ahead of the board of directors) when it comes to influence on
business strategy. I bet that anybody who made that prediction 10 years ago would
have been laughed out of the room—and all the way to the bank.
Empowered with social and mobile technology, and an overabundance of choice,
customers are more knowledgeable, more demanding, and less forgiving. Every
moment must be meaningful and personalized and that is no small feat.
From the very beginning, our vision has been to build a marketing platform from
the ground up that places the customer at the center. We set about organically
developing a customer-centric philosophy, acquiring technologies that matched this
approach, and integrating them in ways that would enable our clients to deliver on
the promise of continuous customer engagement. So it should not come as a surprise
that at our 2014 Smarter Commerce Global Summit, we unveiled new software and
services that bring together marketing, commerce and customer service practices to
help organizations create these deeper, more meaningful customer engagements.
Companies everywhere are maximizing every moment and every interaction with
their customers.
For example, the Bank of Montreal regularly delights its customers with Happy
Birthday campaigns. The campaigns serve a twofold purpose: to form an emotional
and very human bond between the bank and its customers, and to drive sales of add-
on products and services.
Lindt & Sprüngli USA used the IBM WebSphere Commerce platform to build an
online store that lets shoppers create their own customized gift boxes of chocolate.
The solution also lets Lindt quickly build and execute promotions and microsites
customized for holidays and events. After launching the store in 2013, the company
more than doubled its conversion rates and tripled its revenue on mobile devices.
One of my personal favorites is the story of Sky Italia, the Italian digital satellite

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television platform. There was a time when Sky Italia’s understanding of its
customers was limited mainly to where these people lived. Now the company uses
omni-channel marketing technology from IBM to empower its marketers to provide
personally relevant and rewarding customer experiences, increasing profitability
and boosting up-sell rates. More to the point, as Umberto Angelucci of Sky Italia says
in our Made with IBM television spot, “With data, we can give them [our
subscribers] more of what they love.”
Click to view video.
When was the last time you heard a marketer use the words “data” and “love” in the
same sentence? That’s powerful stuff. And it reflects what I consider to be the new
normal of commerce: only through data can you gain a thorough enough
understanding of your customers to deliver products and services that will make
them fall in love with you.
This ebook will walk you through the many reasons moments matter, exploring the
various elements of technology investments that will help you deliver a superb
customer journey. We’ll begin with an exploration of smarter commerce and why it
matters. Then we’ll proceed to insights and why data is, in the words of our CEO
Ginni Rometty, the natural resource of this century. The next chapter is devoted to
innovation and the need to continuously reinvent ourselves around the customer
experience. Naturally we’ll explore customer service and the increasing need to build
relationships with customers that go beyond discrete transactions. We’ll close with a
look at what it means to become a social business.

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Perhaps Ron Howard, award-winning film director, producer, and actor, said it best
at the 2014 Smarter Commerce Global Summit. When asked whether moments
matter, he stated emphatically, “Damn straight they do.” I could not agree more.
Resources
1. IBM Institute for Business Value, The Customer-activated Enterprise: Insights from the
IBM Global C-suite Study, 2014

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Smarter Commerce Matters
If you talk with chief procurement officers, supply chain executives, chief marketing
officers and other executives, one thing is clear: Customers are increasingly in
charge, and what they want is simple but not easy to deliver: they want instant
gratification.
Whether it’s assisting a customer in real time, reaching new markets, or
collaborating with partners and suppliers across continents in the blink of an eye,
enterprises must exceed customer expectations if they’re going to gain a competitive
edge.
But it’s about more than speed, right?
It’s also about experience, and since every interaction can be a moment of truth,
there’s no denying: moments matter. By infusing intelligence and context into all of
your commerce processes, you can become essential to your customers, your partners
and your suppliers in every important moment. Smarter commerce makes this
possible.
Smarter Commerce: Moving Faster, Meeting Demand
When I explain that there’s an innovative way to integrate business functions—and
shatter silos—I’m often asked about the details. “Tell me,” they ask, “what exactly is
smarter commerce?”
The IBM Smarter Commerce approach puts customers at the center of the commerce
cycle. It provides companies tools to leverage critical customer and operational data
—including intent, behaviors, social media sentiment, and supply and demand
volatilities—to help unify the traditionally siloed buy, market, sell and service cycle.
By organizing business operations around the customer, companies can deliver
personalized, highly relevant and seamless experiences across channels that can lead to
greater customer loyalty. Smarter commerce gives companies the ability to more easily
enable and integrate their commerce processes, which in turn can help them capitalize
on opportunities for profitable growth, improved efficiency and increased customer
loyalty.
We’re achieving this goal through community, collaboration, repeatable processes
and analytics all within an industry context. What this innovative strategy means
for companies is adaptive procurement and an optimized supply chain. It can target
personalized marketing across all channels and provide a seamless cross-channel
customer experience, even to the point of anticipating customer behavior and
delivering flawless customer service. I’ll get back to that in a moment.

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But first think about this. What if you could discover how to use actionable
intelligence to optimize seamless and secure integration with your suppliers and
trading partners—all while promoting efficiency and bottom-line results?
What if you could better understand your consumers and move beyond marketing to
develop continuous, personalized experiences that improve sales and encourage
more loyal and engaged customers? What if you could use analytics and cognitive
computing to develop a real sense of brand intimacy between you and your
customers?
This is the power of smarter commerce. It’s focused on helping companies quickly
adapt to rising customer expectations—and those expectations are constantly rising
—in today’s digitally transformed marketplace. Through these changes you can
create value, gain speed, grow revenue and improve profitability.
Smarter commerce also assists with managing the ever-rising I want it now! trend. I
am seeing this trend of immediacy more than ever. In fact, I wonder sometimes, if
John Lennon were alive and still making music today, would he write an anthem
called “Instant Gratification” to replace (or perhaps expand on) “Instant Karma”?
“Instant gratification’s gonna get you/Gonna knock you right on the head.” True
enough.
Customers are demanding an excellent response time, especially when it comes to
customer service areas. The patience of 10 years ago has evaporated with
technological advancements. I can promise you this: customer expectations will
never again be what they were 10 years ago or even one year ago. Those
expectations are changing, and we have to change with them.

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Today, when you take a service call, the customer demands that you know who they
are and any touch points they’ve had with your company. In this context of urgency
and immediacy, moments matter. And we’ve all been there, right? We’re facing a
critical problem and we expect to be known and understood by the company—at
whose mercy we’re essentially throwing ourselves—and we expect to be treated with
compassion, professionalism, and the expertise to solve our problems now. Customer
service stands on the front lines of moments that matter. What is the next moment
your customer will have with your brand and will that moment be positive or
negative? Consider that dissatisfied customers have the means by which to blast

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your brand reputation, instantaneously and at scale.
See timestamp: 48:02 in video.
The frustrated client can now hammer out a few powerful words, hit ’Enter,’ and
those words spread online and go viral at the speed of light. At our recent Smarter
Commerce Global Summit, Billy May, group vice president of e-commerce, digital
and CRM at Abercrombie & Fitch, said it best: “People are heads down, not heads
up.” By which he meant that customers are consumed by their devices, carefully
consulting their networks before making a purchase. Feedback is now provided on a
much larger scale, immediately and to a broader network of people.
Shattering the Silos
Sometimes I talk with businesses that are struggling to stay competitive. But to truly
compete, they must break down silos between the different functions in their
organizations. They need those functions to be more efficient and integrated so they
can create an even stronger customer experience.
Consider, for example, a business that’s using smarter commerce for digital
marketing. It can take that function and pull it together with others so it’s tied
across the beginning of the commerce chain—all the way through to the end,
through post-sale. It’s fully integrated. In fact, marketing and customer service can

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now function hand in glove to deliver a superb experience to the customer. That’s
one way to build a company in which the brand promise and the brand experience
are one and the same thing.
This is where the value is.
Throughout all the different touch points with your customers from beginning to
end, you are seeing this value. And this is where smarter commerce is so different
from other strategies.
Smarter enterprises create a single “system of satisfaction” by integrating their front-
and back-end operations. By infusing intelligence throughout all commerce processes
—with customers, partners and suppliers—your enterprise can connect and deliver
delightful experiences every time, in every context.
CEVA Logistics is a good example of the transformative power of playing together.
As a global third-party logistics provider and integrator, CEVA Logistics provides
manufacturing, distribution, warehousing and transportation services to its clients’
customers, which include automotive and consumer packaged goods companies.
See timestamp: 24:15 in video.
CEVA uses IBM’s B2B Network and Managed Services to deliver real-time supply

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chain services to its customers. When you order that new car you’ve dreamed of with
the optional red leather seats, imagine how the value chain jumps into action.
Chances are CEVA Logistics, which supports 19 of the top 20 automotive suppliers
and 14 of the top 15 automotive manufacturers, is right in the middle of that value
chain and therefore a key player in ensuring that you get the car of your dreams. It’s
CEVA’s job to make sure the seats are transported from the manufacturer’s facility so
they can be installed in your new car. Making that happen requires the timely and
secure exchange of business transactions that are critical to those operations.
CEVA uses IBM’s B2B Managed Services to process all of those transactions with end-
to-end process visibility to everyone involved. So when the seats are installed, CEVA
generates an invoice on behalf of the manufacturer and knows immediately whether
the invoice was received. CEVA watches for an acknowledgement of the receipt. If
the company doesn’t get that acknowledgement, it knows there’s a problem. And the
CEVA team can instantly reach out to clients to track and fix the problem.
It’s exactly at times like this when moments matter most, and our Cloud Services are
critical to this value chain. This seamless integration across the entire value chain,
complete with transparency and alerts, creates a manufacturing environment that is
in lockstep with you, the customer, as you wait for your new car with the red leather
seats.
H2H: The Human-to-Human Connection
We’re also breaking down silos with smarter commerce because customers are craving
that human-to-human connection (H2H). They want to be part of something bigger
than themselves. They want to feel included. They want to feel understood. The rise of
H2H is a major business phenomenon globally, and if you haven’t yet read Bryan
Kramer’s book1, Human to Human: #H2H, I strongly recommend it.
Smarter commerce is making H2H a reality for more companies than ever, allowing
us to understand more about the customer and convert that information into valuable
insights.
For example, I hear a lot about big data. Do companies have a lot of data available to
them? Absolutely. And companies are now taking this data to build deeply resonant,
relevant-to-me experiences that meet that H2H demand.
With data being gathered faster and shared quicker, you can learn more about
customers—and that’s how to forge those deep connections customers crave. We can
predict their needs with great accuracy, understand how to best serve them and drive
engagement. Through IBM Smarter Commerce, we are creating personal connections
with customers, and this is where the brand relationship grows.

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Move Fast, Integrate Slow
Businesses, in my experience, want to move ahead quickly and tackle everything at
once. After all, their customers are demanding speed. But while we need to move fast
because our customers demand it, with smarter commerce you don’t have to do it all
simultaneously—you can, in fact, pick one critical point in your customer value chain
and build from there.
Think about a marketer who starts with the analytics piece of the equation for
digital campaigns. From there, that campaign-related item they’re working on might
lend itself to doing more customer and case management types of capabilities—and
understanding the customer service side of the house.
Customers expect you to know them as individuals. Smarter approaches to commerce
allow you to use contextual information such as intent, motivation, location and
transaction history to engage in real time and deliver seamless, intuitive
interactions. The cumulative effect of these moments leads to those essential
personalized interactions that earn loyalty and accelerate advocacy.
Regardless of where you start, smarter commerce as a whole is helping companies
across all industries transform the way they buy, market and sell products and
services. And it’s through these transformations that companies learn, or even
anticipate, how to meet customers’ rapidly changing demands.
Resources
1. Kramer, Bryan. There is No B2B or B2C: It’s Human to Human: #H2H.
PureMatter, 2014.

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Innovation Matters
We are at an inflection point in the industry, with many changes happening all at
once; this drives not only IT demand, but also innovation as a whole. In the digital
economy, we win or lose clients with a click or a swipe. People are more empowered
than ever before, making the way we engage, each and every time, more important
than ever.
While it’s true that moments matter, when it comes to innovation it’s how we use
those moments to engage our customers that makes all the difference. Consider that
revenue from voice services is declining while revenue from data services is
increasing. What does that really say about the ways in which we use our phones?
The old television trope of the teenaged girl monopolizing the family phone has
been replaced with the all-too familiar image (for parents, anyway) of kids with
their noses glued to their smartphones as they text away.
See timestamp 48:41 in video.
Now consider mobile technologies in the context of cross-selling and upselling your
customers. At Smarter Commerce Global Summit, Billy May explained that 90
percent of the company’s target market sleeps with their phone. As mobile
innovation accelerates, mobile is quickly becoming the flagship brand experience—

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not a corollary experience, but the main way in which people engage with the
brand. So in this powerful context, “now” matters when it comes to innovation.
Connecting the Dots through Mobile
Here’s the catch with mobile: your customer doesn’t care where he is interacting
with you, whether via mobile, desktop, or store. He expects a seamless experience.
And that means omni-channel—an experience that is entirely customer focused. For
example, you’ve likely had the experience of shopping for a product online and
deciding to purchase it in the store instead. But even though you’ve already bought
the product, based on your web interaction, the company continues to market to you
for the same item. It’s fair to say this is annoying at best. But even more
importantly, it feels like the company is disconnected from your experience. They
simply haven’t figured out how to connect the dots. Put another way—they don’t
“get” you and that creates brand friction, not brand loyalty.
In the future, customers are going to become more and more accustomed to
orchestrated interactions with brands across all channels, including mobile.
Experiences like the one above will begin to feel more frustrating to the consumer. A
few good brands will become excellent at connecting the dots and understanding
where customers are in the buying process, and customers will start to wonder,
“What’s wrong with everyone else?”
To be innovative and successful moving forward, not just in mobile but in all
channels, we must do marketing so well that it feels like a value-added service to the
customer. Using tools like predictive marketing and investing in mobile-first
channels will help you connect with the customer experience and avoid these deal-
breaking moments.
The Mobile and Predictive Marketing Connection
Over the past decade, the sheer volume of data that has become available to
marketers is amazing. Big data, real-time data, unstructured data—it’s everywhere.
And with this data increase, most marketers will agree—they don’t have a problem
with the data, they have a problem with the insights. In fact, 82 percent of CMOs
say they feel underprepared for the data explosion, according to the IBM 2013
Global C-Suite Study, The Customer-Activated Enterprise.1

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Now that you have nearly limitless amounts of information, what do you do with it?
Applying the algorithms to the data makes them more actionable. Now you have the
ability to predict with confidence and the power to act in real time, driving a
competitive advantage. This is what we mean when we say “advantage made with
data.”

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Take, for example, statistical algorithms applied to a group of people. You can look
at buying behavior of the past and, based on those data, figure out what you should
offer a specific group of consumers. In this fashion, you can drill down and find out
which offer is statistically more likely to resonate with consumers. That’s how you
can reap the benefits of price optimization. What is the right price for your
customer, and how can you accurately predict the outcome of any given set of
circumstances?
If you can predict the impact of specific actions, then you can improve your
forecasts and results.
Understanding Your Customer in the Right Context
The most important thing you can do moving forward, when it comes to innovation,
is to paint a holistic picture of your customers first, which brings me back to the
point that mobile marketing is ultimately about omni-channel. You must understand
customers’ behaviors across all the different channels, and tie those behaviors
together so you can develop a 360-degree view.

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But even more importantly, you must understand the customer in the right context.
There used to be this large dividing line between the physical world and the digital
world, but that distinction is going away. I suspect that 3D printing is probably the
most obvious and dramatic example of the physical merging with the digital, but
have you seen wallpaper stores in a subway? They’re a brilliant example of virtual
retailing because harried commuters—a captive audience—can make a purchase
quickly and receive it soon after they get home. So there’s a real need to make sure
that you understand context. Where is your customer, physically, and what is she

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trying to do? Is she in the men’s, the women’s, or the children’s department, for
example?
While you’ve been able to view this information online for years, it hasn’t been
possible to view it in the context of mobile, inside the actual store. But as mobile
technologies become more advanced, they can actually pinpoint where the customer
is inside the store. That’s terrific because now you can meet customers where they
are and on their terms, using their mobile devices to tailor their in-store experience
with special offers based on which department they are in, for example. It’s the
physical and digital convergence.

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The Ingenuity of Your Customers
For a long time, digital was a fixed, desktop experience. Then, on July 29, 2007, the
first iPhone was launched—and everything changed. Consumers became
“untethered” and the experience was no longer fixed. They now have unlimited
access to brands and context on their terms, and the consumer’s attention span has
started to get much shorter. This is why many businesses are creating “snackable”
experiences.

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See timestamp 54:17 in video.
For example, Billy May from Abercrombie & Fitch explained that 75 percent of the
company’s emails are opened on a phone. The company is dealing with an audience
that not only has a limited attention span, they are also constantly on the go,
throwing up another barrier to lengthy interactions.
In simple terms, customers expect all of the day-to-day conveniences of their offline
life to be reflected in their online life and vice versa. Furthermore, they expect you
to know them so well that you would never market something they purchased last
week at the store.
But more interesting is the fact that some of the best innovation is actually coming
from consumers themselves. That’s right—your customers may in fact be shaping
your business in profound ways.
Take, for example, one of the many ways in which 3D printing is disrupting business
models by empowering individuals. A South African carpenter2 was working in his
shop when his saw slipped and cut off four fingers on his right hand. He
miraculously figured out that he could print affordable mechanical prosthetics with a
3D printer. A full adult hand made this way costs as little as $2,000 compared with
tens of thousands of dollars for a regular prosthetic device.

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With this example in mind, business leaders should stop and consider what they can
learn from the ingenuity of their customers. Sometimes, your company’s most
innovative person doesn’t actually reside inside your organization at all. In
actuality, the innovator is the customer who is purchasing from your business. That’s
likely why most companies are finding that allowing customers to have a say in
business strategy is extremely important. Whatever you do, you should be asking,
“What is the impact for our clients?”
The Next-Generation Driver of Innovation
The empowered customer is changing the nature of business in general. Ten years
ago, it was the visionary CEO who was driving business. And while that CEO still
has value, it’s now the empowered customer who is in that driver’s seat. It’s a
complete shift. In fact, a surprising percentage of CEOs worry that their colleagues
in the C-suite are out of touch with customers.

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It used to be that we just had a physical world. Then we added the digital world.
And now we’ve figured out how to digitize the physical world. As a result, we can
tap into vast amounts of useful data; this has been happening for years in the digital
world, enabling us to answer such questions as:

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Who is the consumer?
How do you better connect with them?
How do you create that spark?
In this moment, and in the future, you’ll find that innovation never ends. As a
business leader, you get up in the morning feeling like you’re on top of your game.
And then, in a moment, everything changes. It’s a different mind-set and, moving
forward, you must be willing to continue to learn. Because the best leaders are open
to hearing from others—most importantly, from the customer.
When you talk about change—and not just for change’s sake, but substantive,
meaningful change—“every day is a new day” rings true now more than ever. While
the concept of “now” is fleeting, the context of “now” is not. Innovation is the driver
behind this change, helping us to empower people more than ever, and ensuring the
way we engage—each and every time—is more impactful than the last.
Resources
1. IBM Institute for Business Value, The Customer-activated Enterprise: Insights from
the IBM Global C-suite Study, 2014
2. Carpenter who cut off his fingers makes ‘Robohand’ with 3-D printer,
http://www.cnn.com/2014/04/14/tech/innovation/carpenter-fingers-
robohand-3-d/

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Insights Matter
Our CEO Ginni Rometty has been speaking recently about data and how they
represent the natural resource of the 21st century. Not a natural resource, but the
natural resource. The one difference is that unlike other natural resources, data are
intimidatingly unlimited. There are 500 billion word-of-mouth impressions about
products and services on the social web annually in the U.S.1 alone and each
impression generates a potential slew of data: who read what, when, where, leading
to the ultimate data point: what action, if any, did that person take?
I wanted to take the data-as-natural resource analogy a little further and started
thinking about it in terms of being the exhaust or byproduct of our age. It’s not that
we as business leaders set out to create data about our customers. Rather, our
customers, by virtue of how they communicate with one another, build online
communities, and share or create content, have given us a great deal of information
about themselves. The data are a byproduct of our digital lifestyles and like the
byproducts of previous social advances, can lead to profound and unimagined
changes in their own right.
As much as my team and I think about data every single day, we also recognize that
many businesses are at the very beginning stages of determining what types of data
to use and how, and ultimately to translate those data into meaningful insights. I’ve
noticed that customers’ demands for personalized experiences—for brands to treat
them as individuals with unique needs—are growing more urgent, and this trend
certainly compounds matters further for most businesses.
While the masses aren’t using tools like predictive analytics just yet, early adopters
are finding intelligent ways to do this. This is setting them apart in the minds of
consumers, because predictive analytics is allowing for a much higher level of
personalized engagement. But this, of course, means they’re raising the bar for
everyone else.
Predicting the Customer Needs—at the Speed of Life
Can you imagine a world where there’s no need for restaurant menus, no limit as to
what you can order—and options so personalized, they bring your experience to a
whole new level? I can, because I caught a glimpse of this brave new culinary world of
uber-personal experiences when we put Watson in charge of IBM’s food cart at SXSW.

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Click to view video.
Now Watson is something of a darling both within IBM and among our clients, the
tech elite, and the media, too. I believe Watson first garnered national awareness
when it competed on Jeopardy in 2011. What’s so intriguing about Watson, in my
opinion, is that for all of its cognitive computing power, it processes information
more like you and me than like a machine.
With that in mind, we set up a “Cognitive Cooking” food truck using Watson’s recipe
system, which combines three elements, including ingredients, cuisine and type of
dish. Watson is able to use its cognitive powers to identify compatible ingredients
that human chefs might overlook but which share similarities on the molecular level
—like mushrooms and strawberries, for example.
At SXSW, Watson used this ability to come up with unconventional new fare—like
ceviche fish and chips, and Vietnamese apple kebabs. Talk about fusion cuisine
taken to a whole new level.
How does that relate to your business, you wonder?
To my way of thinking, it comes down to transforming the information that you
have already collected into valuable and powerful insights, allowing you to know
what your customers want—oftentimes before they even know it themselves. When
you do this, the customer feels like your brand “gets” them, and that your company
has invested significant time and resources into building a relationship directly with

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them. You’re effectively creating a sense of intimacy between your brand and your
customers.
Take, for example, the customer service experience. Customer service is, in my
opinion, one of the most powerful means by which to differentiate your brand from
that of your competitors. We know that consumers today feel strongly that their
relationship with brands does not begin and end at the point of purchase, but
rather, that the entirety of the experience is what matters. In fact, many people are
willing to pay a few dollars more for exceptional customer service. These are
important and directly actionable insights.
Predictive data takes customer service to an entirely new level because it empowers
brands to offer to help their customers before a problem has even occurred. In
essence, companies can take the information they have captured about a customer,
and use Watson’s capabilities to predict potential future problems. Think about this
possibility in the context of back-up generators during the winter months. Imagine
the gratitude brands could create among their customer base simply by alerting
people that their generators—on which many families depend for basic comfort
during the worst storms—would need servicing within X days.
There is in no reason for brands to wait for problems to occur among their customer
base. On the contrary, proactively helping customers avoid the inconvenience of
unexpected problems is not just fantastic customer service, it’s marketing as a value-
added service.
Let’s take the Watson food truck example a little further and explore another topic
that promises to revolutionize modern business practices: the market of one. I am
talking about cognitive computing abilities and predictive analytics that are so
powerful, we are no longer talking to “segments” of customers, but rather to
individuals.

28.
Think about this example: A woman is purchasing eye shadow with dozens of shades
to choose from. However, instead of sorting through multiple options, the cosmetics
company could blend a custom shade, on the spot and in the moment—specifically
for the woman at the makeup counter. I call that a “wow!” moment.
I think this approach could also be applied to the traditional sizing model. For
example, no longer will there be generic small, medium or large sizes (which by the
way, tend to differ from brand to brand, thereby creating frustration among
customers). In the future, brands will offer your size.

29.
What it comes down to is these technologies and insights are the ultimate spin on
personalization. I strongly suspect that people will become less and less tolerant of
generic brand experiences and that they will, in fact, spend more money with and
display considerable loyalty to brands that invest in understanding them thoroughly.
And that means long-term and strategic investments in analytics and cognitive
computing.
The Small Touches That Matter Now
In addition to predicting issues that a customer might have, and solving those issues
before they occur, there are additional ways that insights can be used to enhance the
customer experience. I listened to Sanjay Gupta of Allstate Insurance discuss an
example at Smarter Commerce Global Summit. The company created Esurance and
developed innovative applications such as Fuelcaster specifically to give their
customers a little something more than just insurance policies. Fuelcaster in
particular predicts whether gas prices will go up or down in a customer’s
neighborhood in the next day. Based on this information, the customer can decide to
buy gas today or hold out for better prices tomorrow. Talk about genius.
See timestamp 33:43 in video.
It’s small touches like this app that connect the dots between what you already

30.
know about the customer and what you think the customer ought to know to create
a superb experience.
Allstate has leveraged the collection of this type of information to create more than
100 recurring campaigns to more than 129 million contacts. The intent here is to
always take care of the customer, to better connect with them and meet their needs.
Growing Results through Insights
In terms of analyzing the customer experience, companies are also using insights to
create more efficient solutions. Take, for example, banking firm Tangerine (formerly
ING DIRECT Canada). The company was looking for a nimble, fast and responsive
way to respond and adapt to customer preferences in the rapidly changing consumer
mobile banking market.
See timestamp 15:58 in video.
Tangerine’s solution was to work with IBM Global Business Services on a new online
and mobile infrastructure, called Orange Snapshot, which lets the bank fast-track
delivery of new features and advanced security for consumers. It gives Tangerine the
flexibility and scalability to identify and respond to changing customer demands,
and it gives mobile consumers complete and simplified ways to view of all their
accounts, pay bills and email money transfers.
As a result, Tangerine has seen banking on mobile devices grow from zero to 18
percent in two years. For the bank’s customers, the mobile ‘small sacrifices’ feature

31.
has resulted in them saving money on non-essential purchases by helping them see
the impact of their spending habits.
Understanding What You Want to Accomplish
From the analytics perspective, understanding what you want to accomplish with
the data is critical, and it’s the best place to start. Put another way, it doesn’t really
matter how fast you’re going if you don’t know where you’re going in the first place.
It’s like that wonderful, circular conversation between Alice (in Wonderland of
course) and the Cheshire Cat2:
“Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to,” said the Cat.
“I don’t much care where –” said Alice.
“Then it doesn’t matter which way you go,” said the Cat.
Learn from Lewis Carroll and begin with a well thought-out business case. Do not
fall into the trap of gathering data for its own sake. Instead, consider the many and
measurable ways in which you can either deliver on or indeed expand your brand
promise through intelligent customer innovation driven by data. Yes, it’s true that
data are the natural resource of our age. But those same data are of little or no use
to you if you don’t first understand how to use them.
Resources
1. Introducing Peer Influence Analysis: 500 Billion Peer Impressions Per Year,
http://forrester.typepad.com/groundswell/2010/04/introducing-peer-influence-
analysis.html
2. Carroll, Lewis. Alice’s Adventures in Wonderland & Through the Looking-Glass.
Bantam Classics, 1984. Print.

32.
Experience Matters
The holistic approach to customer engagement I’ve been speaking about transcends
the traditional silos of marketing, sales, and service. Key to continuous customer
engagement and IBM’s new ExperienceOne portfolio is understanding—
understanding the customer in context, at every touch point and throughout a
lifetime of interactions and customer journeys. But understanding customers is hard.
There is an increasing number of channels that customers use to interact with us,
and increasing blur between channels. Driving this is an ever-evolving range of
technologies in the hands of a greater number of people around the globe, giving
individuals more power and generating an overwhelming volume of data.
Unfortunately, lines of business rarely have access to all of the relevant information
they need to execute their responsibilities in support of customers. Consequently,
they operate on an incomplete understanding of the customer, which can result in
customer experience problems.
The Marketing department, for example, sees customers as a target segment based
on things like opinions, preferences, needs, sentiment, and demographics. The
Ecommerce team sees customers through click streams, transactional data and
customer profiles. Contact centers have lots of analytics for monitoring call times,
customer satisfaction, problem resolution and escalations, but those insights are
usually not tied to the rest of the company’s interactions.
Very rarely do we find organizations which have an integrated view of the customer
across all touch points and across customer lifecycles. In most organizations, the
departments don’t even share basic customer databases. It’s not surprising then that
the customer’s experience with these companies is disjointed and inconsistent.

33.
The impact of not understanding the customer can mean loss in revenue, brand
damage, high cost of doing business and customer churn. Around 63%1 of all adults
online are less likely to buy from a company via other channels if they experience
problems with a mobile transaction. The customer is at the center of the evolution in
commerce, with increasingly high expectation and demands. They are empowered and
it is easy for them to voice their pleasure or displeasure. They can choose whom they
want to buy from, and when.
The Healthy Ecosystem
If the goal then is a consistent customer experience across all touch points, the
means to achieve that goal is a healthy ecosystem with all departments aligned in
their understanding of the customer. If your ecosystem is ailing, you must identify
and address the root causes.
Take, for example, Yellowstone National Park. Not too long ago, the National Park
Service decided to reintroduce the wolf; a controversial move to be sure, and one
that changed the balance of things throughout the park. The wolf is an apex
predator, meaning that it sits at the top of the park’s food chain, and is therefore
one of the few that can control Yellowstone’s elk population. The elk, in the absence
of any real predator, had exploded in numbers to such a point that they had
decimated the vegetation, including some types of trees. Today if you happen to go
to Yellowstone and admire the beautiful aspens, you should give at least a silent
thanks to the wolves, whose reintroduction to the park not only changed the fauna
but the flora, too. The ecosystem is forever altered.
Every organization has a customer experience ecosystem whether it knows it exists
or not. That ecosystem is a complex set of interdependent relationships among
employees, partners, technologies, policies, and customers that determines the
quality of all customer interactions. For the ecosystem to be healthy, companies
must map their existing customer experience to find and fix problems.
Today’s consumer is more demanding and more connected now than ever before.
Their expectations are higher, their loyalty won or lost in a moment. So when it
comes to creating the moments that matter in the customer experience, what’s the
best way forward?

34.
One Lost Customer Is One Too Many
The growing dependence on online purchases and the relationship to other market
channels means companies must ensure customers receive the optimum interactive
experience through all digital channels. Consider a customer who is trying to
purchase a book online, but when she reaches the end of the transaction, everything
suddenly comes to a halt. Something went wrong, but what was it, and why?
Technologies such as IBM’s Tealeaf suite of Customer Experience Management tools
can enable companies to collect and analyze digital data with a focus on improving
and delivering the best possible experience for their customer. IBM Tealeaf can help
provide awareness of struggle trends, discovery of sources of experience friction, and
quantified business impact by capturing every interaction of every customer, every
time.
Click to view video.
Based on a heat map, you can see more detail about where customers are stopping.
For example, they might be spending a long time on the account verification page.
But what’s more, you might see that 59 percent of users stopped in exactly the same
place. That means you can potentially solve a problem for 59 percent of your
audience. Now we’re getting somewhere. Using this information, you can create
simpler steps for account verification, and even more interesting, see who else is
having the same problem.

35.
See timestamp 36:31 in video.
At the Smarter Commerce Global Summit, we talked with Ally Bank, an online bank
that is making great strides toward improving the customer experience. Leveraging
IBM Tealeaf, the company moved from thinking purely about analytics and what is
happening now to thinking about why things are happening. For example, they
were able to look at the web pages at the point when people were taking photos of
checks and see how the process was working as well as where they were having
issues. They could see clear patterns and correct any issues to provide the best
experience possible to customers who are depositing checks.

36.
Click to view video.
Another favorite example of mine is Dollar Bank, a mutual savings bank with a
strong focus on elevating the customer experience. Technology was changing faster
than they had ever experienced, and customer expectations were beginning to shift
as they were looking for newer, better and faster ways to communicate with the
bank.
Before IBM Tealeaf was implemented, when customers looking for support contacted
the call center, staff couldn’t view where the customer was or what they were
experiencing. IBM Tealeaf allowed the staff to watch the customer session either
after it was completed or in real time with the customer, and determine the areas
where the struggle was occurring. They are constantly making improvements.
As a result, the company improved agent efficiency by reducing “average handle
time” by 10 percent and tier 2 escalations by 50 percent, and they experienced
reduced call volume by setting a workflow in place to lower overall site issues.
Through this example, it’s clear that by identifying weak links within the customer
journey, it makes the experience more streamlined for the customer and improves
the overall customer interaction.
Finding the Customer Experience in Unexpected Places
Today a larger portion of the customer experience is tied to suppliers. In fact, 50
percent2 of the value of any product, across all industries, is derived in some form

37.
from suppliers. This means that over half of the value of your end user’s experience
is coming indirectly from your suppliers and partners. It has therefore never been
more important to be scrupulous about the companies with whom you do business.
Furthermore, there are correlations between areas that we might not think about
when considering the customer experience—such as legal, procurement and the
supply chain. These areas, combined, have the potential to create a ripple effect.
Recently, I was at dinner with a customer. We were talking about his job and what
he did. He is a procurement professional, and we were talking about his challenges
—he was constantly working to increase margins, be more responsive and have
higher quality goods. I explained how we had found a way, through working with
thousands of other customers, to bring analytics, big data, social and mobile to
procurement. And that strategy is smarter commerce. Part of this strategy, of course,
is making this ecosystem—the supply chain, legal, procurement, and many other
areas—work together seamlessly, and to do so in exclusive service to the customer.
A similar, but different, example is Johnson Controls. They understood that a
supplier must give to its customers. Before making changes, they had 12 different
applications across the Americas for integration with trading partners. They were
able to consolidate, reduce their technology footprint and streamline. Now when
they benchmark how they compare to other companies, they are in the top 20
percent with B2B integration.
Molina Healthcare made a similar move to improve the customer experience in the
legal portion of the ecosystem. The company provides health care services to the
uninsured population, and is heavily regulated by state and federal regulatory
agencies. Given these strict regulations, they need the flexibility to change contracts
to respond to the changes happening with the government.
IBM Emptoris allowed them to see not only how much money they were making, but
how much money each contract was costing them. Then they could ask the question:
“Can we be more cost effective?” So in reality the customer relationship has as much
do with your back office as the direct-to-business relationships that enable customer
relationships to happen. And furthermore, I think it’s valuable to understand that
the weak link can occur anywhere. As a result, there are opportunities to introduce a
single, ecosystem-altering change in every part of the organization.
Service through Social Media: Meeting Customers Where They Are
It’s difficult to talk about the customer experience today without considering the
effects of social media. Although social media started out being used in marketing
departments, it’s now being used very effectively for customer service. Some

38.
companies, in fact, are leveraging social media to dramatically elevate experiences.
Take, for example, an insurance company that leverages this medium to help
customers who are stuck in the aftermath of a natural disaster but don’t have a
landline.
Worried about their health, finding shelter and locating food—what do they do
when they need to get up-to-the-minute information? They turn to Twitter. Knowing
this, very smart managers at this insurance company started to track where the
company was being talked about. Using this information, they made a concerted
effort to proactively locate customers, connect with them and determine their needs.
Customers were helped in an unexpected way, their experience personalized and
high-touch. Social media as a customer service solution is proving itself to be the
best and most immediate way to listen and respond to your customers’ needs in
almost real time. It’s what they expect today; in fact, customers expect to receive a
response within five minutes3 of saying something about a brand on social media.
Moving the Experience Forward
Moving forward, when it comes to social media and other touch points, the
experience will become more contextual and personalized. Some of the changes
we’re noticing at this moment are having a ripple effect throughout every industry.
Remember, when you “reintroduce the wolves,” you change it all.
The experience that today’s customers expect starts with innovation. Companies
need to innovate and experiment with new ideas, adopting a sort of “fail fast”
mentality. Because nothing is a failure forever; it’s always part of a learning curve.
Companies should try things, measure them, analyze them, and then move on to the
next thing based on what they learn. Innovation, and how it relates to experiences,
differentiates your brand from somebody else’s brand. And the more successful your
business operations are, the more likely you’ll have success in general—and on the
consumer side of the equation as well. The brand is made stronger by its ecosystem,
but the ecosystem must be healthy and complete.
Resources
1. IBM, Gain holistic Understanding of Customers for more meaningful engagements
and effective services customer analytics, 2012
2. A.T. Kearney, Chain Reaction: Your firm cannot be sustainable unless your supply
chains become sustainable first, 2007.
3. IBM 2013 Annual Report.

39.
Connections Matter
Insights. Innovation. Experience. These are the bricks that form the foundation of
IBM Smarter Commerce. But I also think that any good mason knows that the
foundation is only as strong as the mortar that binds the bricks together. In other
words, connections matter.
Today’s world is hyper-connected. This is a boon for anyone engaged in smarter
commerce. I mean, if I reach out to a single person, I can instantly reach hundreds,
thousands, perhaps millions of others through social networks. It also means access
to valuable data linked not only directly to the individual and the point of contact,
but backward and outward to entire continents of profiles and platforms. No one is
an island.
The hyper-connected world is a curse as well, at least for any company that is
unprepared for it. The same connections that allow companies to quickly reach the
masses can serve as a pathway for customer complaints that have gone viral,
spreading negative press and word of mouth like a plague. To change metaphors,
companies not equipped to parse and capitalize on the mountains of data rising
every single day will be paralyzed by it, unable to take the first step, or they will
follow false trails to dead ends.
Of course smarter commerce wouldn’t really be smarter if it couldn’t help companies
make sure they are realizing the benefits of the hyper-connected world and avoiding
the pitfalls. But what makes connections possible in the first place, and what makes

40.
them valuable in the realm of smarter commerce? It’s simple: people-centric
engagement.
What I mean by this is treating people as individuals, not as segments or categories.
This is possible today like at no other time in history because of the convergence of
social, mobile and security. What I love about this convergence is that it’s giving
enterprises the means to meet people where they are. It is arming them with the
data and the expertise required to personalize every human-to-human interaction.
And it is giving them the credibility that is the foundation of trust.
People-centric engagement is also necessary like never before in history, because
individuals now wield unprecedented power in the marketplace, thanks to their
connections to each other and to the companies that would serve them. I think some
stats are in order. Eighty-four percent of smartphone users check an app as soon as
they wake up1. Eighty-four percent of millennials and 70 percent of baby boomers
say social and user-generated content has an influence on what they buy. Seventy-
two percent2 of CEOs in outperforming organizations make customer collaboration a
top priority.
In other words, people are always connected, they are not just talking but also
listening to each other, and top companies are preparing for this new world order.
I like the fact that at IBM, we’ve invested a great deal of time and brainpower in
developing a point of view around social business. This has given us clarity and
purpose in our social business efforts, both internally and in our offerings for clients.
It extends well beyond a simple definition of the term to encompass a holistic
approach to a new way of doing business, one that is built upon connections.
The IBM social business POV is built upon three imperatives, three tenets which
companies that wish to form valuable and lasting connections must build into their
operations in an organic and comprehensive way. They are Empower People,
Understand People and Trust People.
Empower People

41.
I explain to clients that customers are empowered when companies connect with
them in the right way, contacting them with precisely the right offers at the right
time. In one survey, 80 percent of consumers3 said their shopping experience is
improved when staff is eager to help. Does smarter commerce make the employee-
customer connection more powerful? You bet it does. It provides customers with the
personalized service they’ve come to expect. What companies need, I think, is
workers who are excited and motivated by helping people. The employees must be
digitally enabled and empowered to please the customer. Real-time mobile
communications and social capabilities make it possible for them to solve problems
with any customer, store associate or partner anywhere in the world. And they must
be armed with the secure data they need to identify and resolve those problems
quickly.

42.
Beyond customer service, social business lets companies create exceptional customer
experiences that are personalized at every touch point. Integrated toolsets make self-
discovery easier and more meaningful, putting more power in consumers’ hands.
They want a seat at the table, and social makes that possible.
Social communities that companies set up themselves give consumers access to
internal expertise as well as a stronger voice, resulting in greater loyalty and
advocacy, when it comes to collaboration and innovation.

43.
Collaboration is a particularly interesting component of the smarter commerce
picture. It is a lynchpin of social business, yet my guess is that the vast majority of
people would think of it only in the context of employees working together, while
very few would associate collaboration with customers.
It’s important to understand, I think, that IBM Smarter Commerce takes the broad
view. Collaboration is not just something companies need to foster among employees,
and customers are no longer just to be targeted and marketed to. Customers are to be
collaborated with in real and meaningful ways. Companies must use all of the tools
at their disposal—social, mobile, analytics, security, cloud, etc.—to identify the right
customers to bring in at the right entry point at the right time. Through IBM Smarter
Commerce, I love the examples that I see of customers contributing to product
innovation, development, procurement, marketing, and more. This is people-centric
engagement at its best.
Understand People
In order to make the kind of connections with people that truly empower them,
companies must first understand people as individuals. Smarter commerce and social
business can help here as well.
Listening is crucial. I find that knowledge is being created and shared faster now
than at any time in history. People are self-organizing around projects and
communities and sharing their interactions and opinions, not only with other
individuals but with organizations as well—especially organizations they trust. It’s
easier than ever to tap into all the conversations and knowledge, to gain access to
people’s views and activities anytime, anywhere.
But listening and understanding are not the same thing. The backbone of
understanding people is gaining insights from social data, and to do that you need
analytics. Companies with the right analytics tools in place get greater visibility into
sentiment, activities and performance. Smarter commerce also employs behavioral
sciences to delve even deeper into customers’ actions, habits and predilections. The
result is an organization that not only can respond to consumer demands, desires,
complaints, etc., but can also anticipate those actions to a degree never before
possible. A company’s best weapon against customer dissatisfaction is to not
disappoint them in the first place.
Trust People
Trust is difficult to earn and just as hard to maintain. Companies are doing more
than ever before to protect consumer’s private data, yet a breach or misstep at or by
one company can sow seeds of doubt and suspicion in the minds of millions of

44.
consumers across industries. I’ve seen firsthand how many hard-won connections
can be lost in an instant. Two-thirds of US adults1 say they would not return to a
business that lost their personal, confidential information.
So it’s no wonder that 61 percent4 of companies say that cybercrime is the greatest
threat to their reputation, underscoring the importance of a fully-integrated,
analytics-based approach to security and governance. IBM is on the forefront of
offering robust security solutions that go unimaginably far in protecting people’s
personal information. Consumers need and deserve this assurance before they will
engage with a company.
Perhaps nowhere is this truer than in the healthcare industry. Frontier Medical
Group uses IBM Connections software not only for collaboration, but for security as
well. Internal teams at the medical product manufacturer and supplier are able to
keep information highly secure by maintaining complete control over which users
can view different types of information. By restricting different teams’ permissions
to just the groups that they need, there’s no risk of unauthorized users gaining access
to sensitive data. Connections also helps Frontier with compliance by delivering a
solid audit trail for a variety of regulatory bodies.
I think that trust, however, is about more than just protecting data. Consumers trust
and therefore connect with organizations that operate with transparency and
authenticity. In order for a company to operate in this way, it must be inherently
social, not just social on the surface. It must automate the adoption of social
capabilities across the business processes which it already relies on to get work done.
It must re-imagine its business design with new leadership and policies with an eye
on eased governance and more openness both outwardly and inwardly. Employees
must be empowered and trusted to become brand advocates and form deep
connections with consumers.
* * *
Moments are defined by connections. If moments matter, then connections are
critical. Every connection made or lost is a moment seized or surrendered.
Empowering, understanding and trusting people are the ways by which smarter
commerce companies form the connections that create favorable moments. That’s why
I constantly tell our clients that they have the knowledge they need to create excep-
tional customer experiences, they only need the wisdom to understand the data. They
have the means to engage customers in meaningful ways, if they can understand and
interact with them as individuals. They have the ability to earn consumers’ trust, if
they operate in an authentic and transparent manner. By connecting companies to
consumers the right way, smarter commerce helps them make the most of every moment.

45.
Resources
1. IBM 2013 Annual Report.
2. IBM Institute for Business Value, Reinventing the rules of engagement: CEO
insights from the Global C-suite Study, 2014
3. Focusing Your Workforce On The Moment Of Truth,
http://www.retailtouchpoints.com/resource-center/51-white-papers/1312-
focusing-your-workforce-on-the-moment-of-truth
4. IBM Global Technology Services study, Reputational Risk and IT, 2012

46.
Maria B Winans is Vice President, Worldwide Industry Cloud Solutions & Social
Business Category Marketing, where she is responsible for helping IBM clients
achieve overall business effectiveness with a solutions-centric approach creating
value for the line-of-business.

47.
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