Data driven harnessing data and ai to reinvent customer engagement ebook pdf

Data Driven: Harnessing Data and AI to Reinvent Customer EngagementeBook PDF

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PRAISE FOR DATA DRIVEN

Marketers today face huge disruption driven by new paths to purchase and an explosion of new technologies. This requires an entirely new playbook for harnessing the power of data and AI to create more relevant, engaging connections with consumers. Data Driven is a must-read guide for any marketing professional confronting this general challenge and seeking to drive top-line revenue for brands.

Deanie Eisner , President, Kellogg Company

In today’s digital, data-driven world, marketers have the opportunity to actually know what their customers like, what they hate, and where they’re headed—provided they are up to speed on the practical tools and helpful rules of thumb that Tom, Chris, and Vivek share in this book. Data Driven is an indispensable workbook for any marketing practitioner seeking to conquer these new possibilities.

Geoffrey Moore, Venture Partner, Mohr Davidow Ventures and Wildcat Venture Partners, and bestselling author of Crossing the Chasm

If you work in a business that depends on digital interaction with consumers, much of what you thought you knew has been upended in the last 10 years. This book is one of the fastest ways to quickly learn what you need to know to succeed, with real-world examples and frameworks you can use to effectively engage your audiences.

Alysia Borsia , CMO and Chief Data Officer, Meredith Corporation

Data and AI are revolutionizing marketing, and Tom, Chris, and Vivek are among the pioneers driving this tectonic shift. This book is a terrific guide, full of unique insights for marketing and business professionals, and anyone else interested in how data is fundamentally transforming our world.

Jonathan Levin, Philip H. Knight Professor and Dean of Stanford Graduate School of Business

There has never been a more bewildering—or exciting—time to be a brand, and Chavez, O’Hara, and Vaidya are the smartest guides we’ve got. Whether you’re a hard-headed marketer or just a curious soul, Data Driven shows you what makes modern data-driven brands succeed.

Martin Kihn, VP Research, Gartner, Inc., and author of House of Lies

Data offers explosive competitive possibilities across every business sector, which is why investors are spending so much time wrapping their heads around it. Data Driven is an essential guidebook for anyone trying to separate hype from practical possibility, written by pioneers and experts who are ready to share what they know in terms the rest of us can quickly understand and apply. If you’re an investor or an executive seeking to navigate new datadriven opportunities, this is a must-read.

Nino Marakovic, CEO and Managing Director, Sapphire Ventures

If you’re like many businesspeople, you’re likely bumping into data-related topics at work but having a hard time parsing all the jargon. Data Driven is the fastest way to pierce through all the buzzwords and understand what data can practically do for your company and your career.

Greg Schott, CEO, MuleSoft, A Salesforce Company

It’s rare to have a chance to learn about a field from someone who combines the intellectual rigor of an academic, the ease of a good storyteller, the vision of an industry-changing entrepreneur, and the straightforward pragmatism of a company-building CEO. It is especially rare to learn about a subject as important, pervasive, and potentially confusing as data, particularly today. Tom, Chris, and Vivek bring all their considerable experience to deliver on that promise.

Alex Rosen, Managing Director, Ridge Ventures

There are very few resources out there that can truly help newcomers and seasoned marketers alike make sense of the data-marketing landscape and hone their skills. This book does just that, and was very much needed. Praise to the authors who managed to demystify fairly complex topics in such a compelling and engaging way—this is no small feat!

Vincent Balusseau, MBA, PhD, Associate Professor of Marketing, Audencia Business School

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HARNESSING DATA AND AI TO REINVENT CUSTOMER ENGAGEMENT

TOM CHAVEZ CHRIS O’HARA VIVEK VAIDYA DRIVEN

NEW YORK  CHICAGO  SAN FRANCISCO

ATHENS  LONDON  MADRID

MEXICO CITY  MILAN  NEW DELHI

SINGAPORE  SYDNEY  TORONTO

Copyright © 2019 by Salesforce.com, Inc. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

ISBN: 978-1-26-044154-3

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To all the Krazies@Krux who believed and built something great together—don’t relent!

—TC and VV

To Noni Reed O’Hara, 79, who always believed in me, and Mia Meredith O’Hara, 11, who inspires me with her courage every single day.

—COH

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PREFACE: ORIGINS

People interested in business marvel at the meteoric rise of companies such as Amazon, Netflix, Google, and Facebook. Who knew that e-commerce, video streaming, search, and social networking could become so huge so fast? Pundits explain that it’s an inevitable by-product of the growth of the Internet and our need to remain tethered to it. The more we connect, the more opportunities for the advertising, viewing, and selling that generate massive revenues for those companies.

Ubiquitous connectivity only partially explains the rise of the Internet giants and the surprising success of digital upstarts such as Spotify, Tinder, and Twitch. A powerful steel thread runs through all these companies. What they have in common is data: the ability to capture it—increasingly every scrap—and put it to work to generate insights, recommendations, and offers that dazzle their customers.

If you’re in the business of engaging with existing customers or attracting new ones, you can run, but you can’t hide from data. It is the fuel that enables any company to know its customers intimately, improve its products, deliver better customer service, optimize any business process, and predict the future direction of markets.

This book is about data—some of it difficult to see and capture, much of it hiding in plain sight. From our vantage point there’s no reason why the possibility and power of data should

remain a dark art practiced only by the high priests of the Internet. It’s time to yank the covers back and demystify all of it.

We’re not business school professors or pundits. We’re practitioners with decades spent diving into data. More recently, we built a company called Krux, a data management system (also known as DMP, for “data management platform”) that is now part of Salesforce. Today, companies like Adidas, Turner, L’Oréal, and Bloomberg depend on the Salesforce DMP to power their marketing, commerce, and advertising operations.

When we reflect on our journey over the last 20 years, it seems a little trite to reason backward from its outcome and say, “But of course.” Data is considered the new oil, commentators remind us, and companies that extract, clean, analyze, and transport it are essential to the growth of every industry.

But many of the core concepts we discovered on the path to this data awakening weren’t so easily taken for granted, especially when we were fire-testing them in the open market in 2010. Some of them were a little askew. Some of them are still unproven. But they powered us through the rough times, and on balance they mostly came to fruition. Alan Kay, the pioneering computer scientist, once said, “Context gets you 80 IQ points.” Before hurtling forward, we’ll follow Kay’s dictum and offer some context for the observations and ideas in this book.

During the last two decades, partly because we’re data geeks by training and disposition but mostly because we were lucky, we found ourselves at the center of the consumer data revolution. Early on we latched onto three core hypotheses, which dramatically shaped Krux’s trajectory: first, it was possible to generate a 10x value increase through audience segmentation; second, a 1,000x cost-performance gain was within reach as compute

power increased and the cost of data storage decreased; and third, the decoupling of user data from content, ads, and other digital interactions could enable a 360-degree, real-time view of every customer.

The prequel to Salesforce DMP and Krux was a company called Rapt, which was founded in 1999 and sold to Microsoft in late 2007. I was a founder and CEO, and Vivek was the CTO. By 2004 Rapt was helping large media publishers such as MSN and Yahoo! optimize the pricing of their advertising inventory, the rectangular slots on web pages that thousands of companies were purchasing to reach their desired audiences. Rapt’s analytic engines determined optimal price points for Yahoo!’s advertising products, generally differentiated by the size and placement of the ad, the channel on which it ran (finance versus auto versus entertainment), and the time of delivery.

We noticed that a small cluster of Yahoo! salespeople in the finance vertical weren’t adopting the prices that our analytic engines were generating. For the exact same ad inventory that their colleagues were selling at a $6 CPM (cost per thousand impressions, or cost per mille, where the “mille” is Latin for “thousand”), this group was commanding price points almost 10 times higher, and their prices were attracting buyers . It was unnerving. Much of our project’s success depended on price discipline within the sales organization and shared confidence that our algorithms were homing in on the right price points. The group’s activity wasn’t a deployment issue to be ironed out but an insurrection to be put down.

We pushed for a deeper look and asked the rebels how they were able to sell a finance ad with a price recommendation of $6 to financial advertisers like Fidelity and Vanguard for $55. After some