Forrester has solid data that shows that insights-driven firms outperform their peers. And our data shows that most data and analytics budgets are increasing, that over 60% of firms globally now have chief data officers, and for the first time since we’ve started measuring insights-driven business maturity in our annual data and analytics survey, fewer than half of organizations rank as beginners. OK, so the number was 49%, but there was a solid jump into the intermediate range as years of hard work on becoming more insights-driven have started to pay off.

So as firms get better at generating insights — and acting on them — what will they be doing to improve their customer insights (CI) in 2021 and then ensure that this improved understanding actually moves the needle on the customer experience (CX)? Something different. Why? If 2020 has taught us anything, it’s that change is inevitable and that customer insights leaders must constantly look to evolve their techniques, their technology, and their organizations. Here’s a sampling of what a smart assortment of CI, CX, and B2C marketing analysts predict for 2021:

  • CI leaders will shift 10% of their budgets to emotion analytics. Emotions are a more important driver of consumer decisions than rational thought and thus are the largest factor in brand energy, customer experience, and marketing effectiveness. But for the past decade, CI professionals have leaned into the precision of big data analytics instead of the traditionally unquantifiable territory of emotion. New techniques change this dynamic: AI-based text analytics tools such as Clarabridge and IBM Watson improve the precision of cruder sentiment analysis tools, while firms such as Nielsen and Realeyes bring biometric and facial analysis methodologies from the lab to the business world. As data analytics becomes commoditized, firms will shift 10% of the insights budget to emotion analytics to pilot new techniques in search of competitive advantage in the “why” behind consumer behavior, not just the “what” that data analytics addresses.
  • Companies will reorganize to ensure CX and CI collaboration. Despite continued, hefty, and often redundant investments in technologies, firms struggle to translate customer feedback and data into insights and actions that improve customer experience and deliver business outcomes. Bringing CX and CI teams together will improve how companies understand their stakeholders and customers — and change how they measure everything across the entire customer lifecycle. It will also shift how companies wrangle data from multiple silos — creating a more comprehensive picture of what is happening. This will enable teams to tell a more compelling story, improve what they predict, and change how they engage stakeholders — and how they share meaningful and relevant insights that inspire action and drive change. CI and CX pros should collaborate now to prepare for this change and to highlight the value that both roles deliver.
  • To address shifts in customer behavior, companies will bring in reinforcements. During the COVID-19 pandemic, analytically driven firms saw their predictive model performance deteriorate almost overnight due to data drift as customer behavior changed drastically. How can companies optimize customer interactions when the past no longer reflects the future? Enter reinforcement learning. Rather than analyzing a historical data set as traditional machine learning does, reinforcement learning learns from interacting with the real world or a simulation of the real world. Reinforcement learning can therefore experiment by delivering different experiences to different customers and find the next best experience for each customer. Vendors struggling to differentiate in the increasingly commoditized customer analytics technology category will add reinforcement learning to their solutions. In fact, SAS has already done so. CI pros looking to adjust to customer behavioral changes in real time should reinforce their practices with reinforcement learning.

Read our report for more details and more 2021 customer insights predictions. To understand the major dynamics that will impact firms across industries next year, download Forrester’s Predictions 2021 guide.