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Published April 19, 2018
This lesson will introduce you to the Next-Best-Action approach to marketing. Also the lesson describes how the principles of Next-Best-Action are implemented in Pega Marketing.
Customers are more empowered than ever before. As a result, they have very high expectations of the experiences they receive from their service providers. Their experiences must make sense within the context of their lives. This means they have to be timely, relevant to their needs, and meaningful across all the channels they interact in.
At the same time, providers need to be sure that the offers and decisions they make are good for business. For example, retention strategies should be tested and weighed against customer value, and risk analysis should be done before making an offer.
The Next-Best-Action approach to marketing is all about optimizing customer value and prolonging valuable relationships.
To do this, it works to continually strike a balance between what customers expect, and what the business wants to achieve. To achieve this balance, Next-Best-Action calculates a 1-to-1 business case for every single customer decision.
Next-Best-Action also considers constraints that the business has, such as product and budget constraints. By enabling personalized, balanced interactions, Next-Best-Action helps organizations build trust and increase customer satisfaction. This translates into more profitable, longer term relationships.
Pega Marketing uses the Pega Customer Decision Hub to make Next-Best-Action decisions. The Customer Decision Hub allows Pega Marketing to look at each customer as an individual and then decide the best action to take with that customer during an interaction.
The Decision Hub uses analytics to select the best decision among many possible decisions.
The best action always satisfies the customer's immediate needs while also meeting the business’s goals. For example, if a customer calls in to dispute a transaction, the dispute will be handled first before the system would decide, say, to make a sales offer. Suppose the customer then says ‘No’ to the sales offer. This response is used as input for deciding what the next, best action should be. In this way, every Next-Best-Action builds on the previous best action, and this process continues throughout the lifetime of the customer relationship. As a result, customer relationships become stronger and more valuable.
Pega Marketing makes Next-Best-Action decisions in real time and can deliver them anywhere a customer interaction is taking place.
For example, it can guide a call-center agent to say or do exactly the right thing as they are speaking to a customer. It can execute the same action in real-time in an online channel, a retail branch or a mobile channel. The same decision-making process can also make traditional campaigns more effective.
Pega Marketing uses predictive analytics to do 'Intelligent Segmentation'. Intelligent Segmentation helps select the best audience for an offer in a traditional outbound campaign. This increases response rates and, in turn, Return On Marketing Investment (ROMI).
Next-Best-Actions are not restricted to marketing actions, they can be related to many customer-facing business functions including retention, nurture, and up-selling.
Think of Pega Marketing’s Customer Decision Hub as the "Big Brain" of decision making. The brain takes all available data into consideration to make Next-Best-Action decisions. In summary, Pega Marketing works on the principles of Next-Best-Action. It uses the Customer Decision Hub to make Next-Best-Action decisions. It delivers the decisions when and where a customer interaction is taking place. The action can be related to a number of business functions including retention, nurture, and acquisition.