Analytics from Mark Cuban to Text Mining

As I mentioned in a previous post that analyzed sports enthusiasts in the U.S., I recently attended the MIT Sloan Sports Analytics Conference. The event was fantastic! I enjoyed all of the sessions that I attended that included a who’s who list of people in the sports world such as: Mark Cuban, Scott Boras, Drew Carey, Eric Mangini, Jeannie Buss, Jeff Van Gundy, Jonathan Kraft, Mark Shapiro, Michael Wilbon, Bill Simmons, Steve Tisch, and the grandfather of sports analytics Bill James (who deservingly was presented with the Lifetime Achievement Award).

I also just got back from attending the Clarabridge Customer Connections at the Doral in Miami where I gave the opening keynote speech: What Makes a Good Voice of the Customer Program? Interestingly, it was also the location of this week’s World Golf Championships so there were PGA people all over the grounds.

Given how much I enjoyed those two events, I’ve decided to list out 10 things I learned, observed, and/or enjoyed:

  • #10: It’s good to be Mark Cuban. Mark missed a couple of the sessions, but showed up for his one-on-one interview with Bill Simmons (ESPN). He was great, totally relaxed, even smacking Bill on the back of the head as he walked on stage. He talked about the NBA lockout as “...lockout bullshit. You talk about a whole lot of time on a whole lot of nothing.”  And he went onto say that the NBA stands for “Nothing But Attorneys.” In his tweets, Cuban referred to the event as the dorkapalooza. I’ve added “hang out with Mark Cuban” on my list of goals in life; he seems like a lot of fun.
  • #9: The NBA is an analytical hotbed. Cuban said that the stats that you read in the box scores for NBA games “are pretty useless.” So the Mavericks have four people at games logging information that they use to make in-game decisions. The Mavericks won the award at the event for “Best Analytical Decision” based on the team’s decision to move J.J. Barea into the starting line-up at last year’s NBA championships. In addition, the winning presentation in the “Evolution of Sports” track was titled “From 5 to 13, Redefining Positions in Basketball” that used cluster analysis to identify 13 unique types of players instead of the guard, forward, center model used in the past. Also, we heard that many NBA arenas are putting three cameras on each end of the floor so they can track the X/Y/Z coordinates of players and ball movement to fuel more advanced analysis.
  • #8: Taking action on insights is precious. I started my keynote speech by getting the audience to do a chant: “Feedback is cheap. Actionable insights may be valuable. Taking action on insights is precious.” My speech was all about how to focus voice of the customer efforts in a way that they add business value. As a part of my speech, I also discussed how many existing market research practices are obsolete. And, I ended my speech as I started it, with the chant: “Feedback is cheap. Actionable insights may be valuable. Taking action on insights is precious.”
  • #7: Big analytics vendors are missing from sports. As with most conferences, the MIT Sloan Sports Analytics Conference had its trade show full of vendors. But, surprisingly to me, there weren’t any of the big guys like SAS or IBM SPSS at the event (at least with high visibility). All of the vendors were sports-specific providers like EDGE10, StarStreet, and Team Rankings.
  • #6: Making people believe is critical. One of the sessions at the sports analytics was “The Power of Belief in Sports.” It examined some research about how athletes can improve their performance. The study that was discussed examined what happened after giving athletes performance enhancing things (like caffein or acupuncture). By doing a study with placebos, the researchers found that the level of improvement was not determined by whether or not the athlete received the enhancements. It was much more driven by whether they believed they received the enhancement and how much they believed that it would help them.
  • #5: I’m a proud Sloanie. As a Sloan alumnus, It was great to see the MIT Sloan School lead such a great event. One of the co-chairs of the event was Daryl Morey, General Manager of the Houston Rockets, who is also a former MIT Sloan grad. There were also about 50 other Sloan students who were active in planning and running the event. Nice job Sloanies!
  • #4: Parking in Boston is a mess. We drive into Boston on the first day to attend the sports analytics conference at the Hynes Center. There are no obvious signs as to where to park, so we ended in the main Prudential Parking lot. It’s a huge labyrinth of parking sections. After finding a spot, we walked aimlessly for a few minutes trying to figure out where to walk to get out of the parking lot — there weren’t any signs. All that was just for the honor of paying $30 for parking.
  • #3: You’ve got to speak the right language. Scott Boras discussed how different parties have different languages and you need to speak their language. Players are typically kids in their 20s who come to the ballpark every day and just want to perform better. They discuss things like weight shifts and batting stance and care about optimizing what amounts to be a pretty short tenure as a professional athlete for most of them. Managers need to figure out line-ups every day that will give them the best chance to win. Owners want to win and make money, with a different emphasis across owners. I used this point in my speech, because its critical that analytical insights are translated into the language of the people that you want to use them. A store manager does not have the same needs as a product manager, so trying to show them the same voice of the customer insights and data in the same reports won’t be effective. You need to customize what they see to the decisions that they are going to make with the insights.
  • #2: The Seattle Sounders are customer-centric, who knew? I was surprised to see Drew Carey (the actor) on the agenda at the sports analytics conference. But it turns out that he is an owner of the Seattle Sounders, a soccer team in the MLS, and a funny guy who is comfortable swearing on stage. The club has adopted some very customer-centric practices like having an advisory board of season ticket holders that provide feedback on strategies and decisions and even has the power to replace the general manager. These fan-centric efforts have really worked, as they get about 40,000 people to attend their matches. Here’s what Drew said about what they’re doing at the Sounders “If I owned a Costco, I’d do it [the same practices] there.” The Sounders appear to be a good business case to study.
  • #1: Text analytics is a requirement. For several years I’ve been advising companies to look into text analytics as a way to tap into a myriad of wasted insights from call center interactions, sales notes, social media, and open-ended comments on surveys. I even wrote a post a couple of years ago called It’s Time For Text Analytics and have listed “unstructured data appreciation” as one of the key customer experience megatrends. Clarabridge and other vendors in the space have fine-tuned the technology to serve many key customer experience use cases. I really liked some of the new capabilities that were highlighted at the event: Automatic theme detection, root cause analysis, and collaboration. Other than the price tag, there’s no reason for any large company not to have some text analytics efforts under way.

The bottom line: I really enjoy combining sports and analytics

People Are Key To Predictive Analytics

I recently wrote about remarks from General Colin PowellScott Hudgins from Disney and Orlando Magic’s Alex Martins who spoke at The Premier Business Leadership Series sponsored by SAS. Here are some additional tidbits that I found interesting throughout the event:

  • Paula Puleo, SVP and CMO of Michaels Stores, talked about how the retailer is “living its brand” and “putting Michaels’ brand into the hands of its customers.” She describes that the company used to “shout at customers” with Sunday circulars but have been building more of a dialogue with customers and employees over the previous 18 months. When she discussed the redesign of the frame section in the stores, she described the goal as: We help preserve the cherished moments of our clients. I am planning to interview Puleo and provide more details on the work that she’s doing in a future blog post.
  • Tim Belk, Chairman and CEO of Belk, shared these comments: “If you’re going to build your brand, you need to invest in your people” and “You need to make associates happy if you want your customers to be happy.”
  • Matt Cappio, SVP of Marketing Strategies at Bank of America, explained how the bank is using analytics to understand what’s most relevant to the customer and beneficial to the bank. It can identify offers that meet certain goals in ares like revenues and credit risk. It’s not just about having the technology spit out an offer. Cappio said: “We need to win our associate over as to the value of the offer or we will have a crisis of confidence.”
  • Jim Goodnight, CEO of SAS, discussed how massively parallel in-memory processing allows companies to do analysis on ALL of their data, quickly. Jim Davis, SVP and CMO of SAS, discussed a scenario where SAS reduced the time to complete a marketing optimization for a European telco from 8 hours to 2 minutes and 17 seconds.
  • Halina Karachuk, VP of Innovation, Research and Analytics at AXA Equitable, talked about “mining for diamonds” which is a process where they analyze their advisors’ book of business (client and product information) and identify the “next-best offer” for each household.
  • Eric Webster, VP of Marketing at State Farm Insurance, explained that the most important question for a life insurance underwriter is “are you a smoker?” It’s so important that insurers insist on a medical exam to validate this answer. State Farm is starting to use predictive models to reduce the number of medical exams; only using this expensive and time-consuming step when it’s most required.
  • Best selling author Jim Collins also spoke at the event. His core message was that great leaders wrap three attributes around their ambition: Fanatic discipline, empirical creativity, and productive paranoia. Collins’ analysis showed that great leaders and companies aren’t just lucky. He researched more than 200 “luck events,” which are situations that: are independent of your actions, have significant consequences, and are unpredictable.  It turns out that great companies aren’t differentiated by their good luck, but by their ability to deal with all of the luck events they run into — good or bad. Collins described this as their return on luck.

There’s a lot of different stuff going on in this post. Is there anything that connects all of these elements besides a conference center in Orlando? I’ll give a shot at wrapping it all together:

Predictive analytics will increasingly put deep insights into the hands of people at the point in time when they make decisions. But this won’t have a significant impact on companies unless they use the insights to identify value for customers and engage employees in designing new processes. This combination of left brain analysis and right brain human engagement will help companies more nimbly respond to rapidly changing environments full of both good and bad luck.

The bottom line: Powerful analytics is necessary but not sufficient for successful analytics

Some Data Magic In Orlando

At the The Premier Business Leadership Series in Orlando, one of the speakers on a panel was Alex Martins, President of the NBA team Orlando Magic. As a huge Boston Celtics fan, I was very interested in hearing what Martins had to say.

Of course, it was also cool to meet Patrick Ewing, now a coach from the Magic, who joined one of the receptions. I’m on the left and Jim Bampos is on the right. Yes, Ewing is a very tall man!

Given that it was a SAS event, it’s no surprise that Martins spoke a lot about how the Orlando Magic are using data. Here are some of the tidbits:

  • The Magic’s mission is to be “world champions on and off the court, delivering legendary moments every step of the way.” Martins was proud that the organization provides highly competitive compensation so that “talent wants to work for us.”
  • Martins sees that they compete for the entertainment dollars of families, so they need to pinpoint the needs and desires of those people. It has been a “mom and pop” business since it was purchased by the DeVos family in 1991.
  • The organization started to actively collect customer data about six years ago; tapping into Ticketmaster, fan intercept surveys, and season ticket holder surveys.
  • As Martins said, tickets to see the Milwaukee Bucks midweek are not the same value as seeing the Miami Heat over the weekend. Now the Magic use SAS to optimize the ticket prices based on demand for each game. Their franchise has the 5th highest revenues even though it’s in the 20th largest market. He said that they don’t need to push excess tickets at the end of the season because they price them appropriately from the beginning.
  • As an example, tickets for the least desirable games start at $10 while those same seats at the most popular games cost $110.
  • The Magic was one of the first ticketless teams in the league. Season ticket holders get a card that they use throughout the stadium. This gives them a lot of data about what people buy (food, souvenirs) which allows them to make targeted offers. For instance, they often will do “random acts of kindness” which might mean bringing a season ticket holder ice cream from Cold Stone Creamery if that fan regularly buys from there.
  • He discussed how there’s a ton of insight in unstructured conversations, especially in social. The Magic have the 3rd highest Twitter following in sports behind the Lakers and Manchester United.

The bottom line: Data can be useful on and off the court.

At Disney, Someone Always Owns The Moment

Another speaker that I enjoyed at the The Premier Business Leadership Series in Orlando was Scott Hudgins, Vice President, Customer Managed Relationships at The Walt Disney Company. When someone at Disney talks about customers, I’m all (Mickey’s) ears. Especially when he said this (which I thought was really profound):

No one owns the customer, but someone always owns the moment

Hudgins, like others at the event, discussed their use of analytics with SAS. Disney’s goal is to “know the guest well enough so that at any time or place we know what to do next.” It turns out that Disney recently crossed the line where they have data on more than half of their customers.

In 2011, Disney had a goal “know me and be relevant.” They focused on 5 to 10 segments. Now they create individual experiences for 100s of 1,000s of individuals. He discussed some of the techniques they use to do this throughout the lifecycle of a park visitor:

  • When someone is thinking about a trip, Disney will send a DVD. This allows people to make their own customized maps of the parks — which, in return, provides Disney with data on their preferences.
  • Disney sends these “shoppers” a personalized email (with more than 1 billion permutations) right away. They’ve found that success of those emails drops 20% per day.
  • After the shopper books a trip, they send a welcome mailer to reinforce the decision and reduce buyer’s remorse. This has reduced about one-quarter of the cancellations.

Hudgins describes Disney moving from “disparate campaigns talking to guests” to “harmonious communications with guests.” He showed an evolutionary path from “rewards program” to “lifetime value recognition” to “consumer-centric way of doing business.”

Hudgins has about 75 people on his team across these areas:

  • Program management
  • Campaign management
  • Reporting/analytics
  • Modeling
  • Business development

The bottom line: Who owns the moments with your customers?

Leadership Thoughts From Colin Powell

A couple of weeks ago, I attended The Premier Business Leadership Series in Orlando which was hosted by SAS. It was a pretty interesting agenda. The first speaker was General Colin Powell, USA (Ret.). I’ve seen Powell speak in the past and once again really enjoyed listening to his remarks.

Powell shared his take on leadership: “Give followers missions and goals and make sure their individual missions are consistent with the overall mission.” He highlighted a number of attributes of good leaders:

  • Passion
  • Selflessness
  • Ethics
  • Character
  • Moral courage
  • Take care of the troops, give them what they need to succeed

Powell also discussed the importance of recognizing people who are doing a great job. He sends a lot of handwritten thank-you notes. But he also said that you need to be prepared to discipline people as well. If it’s not working, then you need to “move, retrain, or fire” the people.

Powell talked about how he updated the technology across the US State Department. He shared his realization that technology wasn’t enough; he needed to change what he called the “Brainware.” He had to persuade State Department employees to use the tools and the knowledge and stop doing things the way that they were doing them in the past.

I loved this quote from Powell: “If you want to win the battle, then you need to get inside of the decision cycle of your enemy.” He emphasized getting good data and developing contingency plans. His advice: If something doesn’t work, change it. If it works, then exploit it further.

Another quote I liked was this one that he attributed to President Ronald Reagan: “Hard work never hurt anyone, but why take a chance.” Powell shared other stories about President Reagan, who he clearly admired.

Powell was very upbeat about the US, which he described as “the nation of nations, inspirational to the rest of the world.” But Powell was not as favorable about the US government; he chastised congress for not being able to compromise. He explained that the founding fathers were deeply divided on how to handle slavery, but they put those differences aside and figured out how to draw up the constitution.

The bottom line: General Powell is a very wise person.

Verint Buys Vovici; Let The Games Begin

I spoke with Verint and Vovici execs today about Verint’s acquisition of Vovici for an estimated $76 million. For those of you who don’t know these vendors, Verint provides workforce management, call recording, and analytical capabilities targeted at contact centers. Vovici is an Enterprise Feedback Management (EFM) vendor (I consider EFM an outdated term) that provides voice of the customer (VoC) software and services. It appears that Vovici will continue to operate somewhat independently as “A Verint Company.”

My take: First of all, kudos to Verint. It’s a good extension to its offering and the price tag seems fair (although I don’t get too involved in valuations). And, they can share all of the company towels that have a “V” monogram. 🙂 This is a natural evolution in the market, and is consistent with the M&A activity I’ve expected and have been writing about for a while. Here are some things that I think we can learn from this acquisition:

  • The contact center is a VoC goldmine. There’s a ton of insights about customers that remain locked inside of contact centers. Companies can learn a lot by blending their contact center interactions into their voice of the customer programs.
  • Unstructured data is critical. Vovici grew up as a survey vendor which is the heritage of most of the “EFM” firms. But there’s a ton of lost insight in unstructured content such as social media conversations, call center interactions, sales notes, etc. That’s why “unstructured data appreciation” is one of our 8 customer experience megatrends. Vovici will be able to tap into Verint’s voice analytics to offer compelling capabilities around things like mobile voice feedback.
  • Look for a NICE next move. Verint’s largest competitor, Israel-based Nice Systems, needs to make a move. With a ton of “EFM” vendors around, there are a lot to choose from (including Allegiance, Medallia, Mindshare, and even another Israeli firm, Ransys, to name just a few of the many vendors).
  • The big boys will awaken. Verint’s acquisition of a major player in this market will accelerate the moves by large software players such as SAP, Oracle, SAS, and IBM. I’ve discussed that this market was heading away from “EFM” vendors towards what I’ve called “Customer Insight And Action (CIA) Platforms.” These vendors are evolving into other categories like CRM, BI, analytics, contact center, and BPM in which much larger vendors play.
  • Voice of the customer programs are evolving. All of these vendor moves will make it easier for companies to develop actionable insights from a variety of data sources. That’s why firms must continue to update and evolve their VoC programs.

The bottom line: This is the start of a busy M&A season.

P.S. Check out our Voice Of The Customer Topic Page

Happy Employees Create Better Customer Experiences

As I discuss in my eBook The 6 Laws Of Customer Experience: Unengaged employees don’t create engaged customers. If you want to differentiate your customer experience, then improve your relationship with employees.

That’s why I want to give a shout-out to these 100 companies (led by SAS, Edward Jones, Wegmans, Google, and Nugget Market) that Fortune Magazine ranked as the best companies to work for.

It’s no coincidence that I’ve written about customer experience best practices from many of these firms.

The bottom line: A good goal is to appear on, or move up on, this list.

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