IBM’s CEO on data, the death of segmentation and the 18-month deadline

Link to: IBM’s CEO on data, the death of segmentation and the 18-month deadline

Big data will spell the death of customer segmentation and force the marketer to understand each customer as an individual within 18 months or risk being left in the dust, according to IBM’s CEO Ginni Rometty.

Speaking yesterday at the ‘CMO+CIO Leadership Symposium’ in Sydney, Rometty outlined three paradigm shifts marketers are poised to go through, giving the industry 18 months to sink or swim.

The most telling for marketers was the shift from segmenting customers into groups to understanding and targeting each customer as an individual.

“Marketers will say my job has always been to understand customers segments,” Rometty explained. “The shift is to go from the segment to the individual. It spells the death of the average customer. Take the data and do things like real-time pricing, you’re going to do omnichannel… you’re going to bring out the latency in the data.”

The second shift covered was the evolution from reaching out to customers to creating a “system of engagement” that keeps track of interactions between brand and customer, and uses insights to maximise value creation at every touch point.

Thirdly, cultural alignment and authenticity was identified as another important shift, as data is used to personalise and contextualise interactions. Rometty, who served as IBM’s chief of marketing and communications before moving into her current roles as CEO, president and chairman of the company, stressed the importance of designing brand and culture so they are authentically one.

Transparency is important in achieving this, she says. “One of the ways I believe you can help drive a transparent culture is to make it a social enterprise.”

Yesterday’s Leadership Symposium brought together CMOs and CIOs to tackle business transformation issues as big data creates the two business divisions to work hand in hand. Analysts forecast the CMO will spend more than the CIO on technology by 2017 and predict the pair will end the year as either friend or ‘frenemy’.

Rometty believes big data will form the basis of competitive advantage, noting that once a business starts gearing around data, “it is inevitable the next thing you have to do is to link into all the information you’re already collecting”.

Her explanation to the audience of the impact data will have:

“Big data, social, mobile will form the basis of competitive advantage. Let me give you a couple of data points about big data and this next era of technology. When you think of it this way it is here to stay. All of these phenomenon are happening at exactly the same time and never in history has that happened before.

There are three Vs associated with big data. The first one is the volume of it that’s out there. Today there are two xenobytes of data [created every day]… By 2015, it will be 40 times that amount. Where on a ‘u’ curve that is [about to rapidly arch up].

The second V is velocity. The speed at which you’re seeing this data come past your company. Every two days the world creates as much data as it did through all of time until 2003. We’re used to data that fits nicely into rows and columns… but 80% of what is collected today is unstructured.

The last and the most important is the word veracity. If you look it up it means ambiguous and uncertain. All of this data, conversations, photos… what do they mean? What is the context? By 2015, 80% of all data will be uncertain. CIOs can’t write enough programs to get through this data. Just in time a new generation of computers are coming out. They’re not programs, they discover.

The difference between a market leader is always on the edges of what they do. The aggregation of business data will differentiate what you do… This is a new era of technology and because of it big data is going to form the basis of competitive advantage.”

 

Comments

  1. Renee Ballard says:

    Wow, powerful predictions from Rometty.

    I couldn’t agree more on the last point, we’ve already got the big data, but it’s applying it to our strategies that seems to be the missng link.