As customer interactions increase across an expanding number of communication channels, business leaders are struggling to understand and engage with each customer effectively. To address this challenge, leading organizations are adopting strategies around “next best action,” a decision-support model that systematically identifies the next best step to take in the customer conversation—whether that action is providing additional information or targeted services, presenting a unique offer, or taking no action at all.
Examples of next best action include presenting customized brand imagery to a prospect based on personal interests, providing a unique offer to a customer who is close to achieving a loyalty reward, proactively notifying customers of a potential problem with their purchased product, responding to customers via their preferred channel, or making a special offer to a customer who had a bad service experience.
Companies that are adopting this paradigm are being rewarded with improved customer acquisition, increased loyalty, and greater share of wallet. For example, a major telecommunications company implemented next best action across web, contact center, and in-store channels, and reported increased sales conversions, faster service response, and a 20 percent reduction in customer churn. A major cruise line was able to increase on-shore excursions and use of on-board amenities by 14 percent by dynamically delivering the most-relevant imagery and offers to prospects.
Next best action strategies require a holistic approach encompassing the systems necessary to organize the data, the tools to effectively analyze it, and the applications and business processes to translate insight into action. Here are the key elements of successful next best action strategies.
Next best action strategies require a holistic approach encompassing the systems necessary to organize the data, the tools to effectively analyze it, and the applications and business processes to translate insight into action.
Business strategy alignment. Next best action strategies start with a clearly defined business strategy. Is it more critical to acquire new customers or grow existing ones? Where is the business struggling the most? Where are the biggest opportunities? Answering these questions helps guide the most impactful next best action use cases. Align use cases with the business need and focus on situations where there are high volumes of repeatable interactions.
Modern data platform. A modern data platform is critical to ensure real-time access to structured and unstructured customer information. Datasources useful for next best action strategies include customer demographics, purchase and service history, click stream, brand sentiment, channel preferences, and personal interests and affiliations. The first step is to establish an integrated view of this data, identify interrelationships, and make the information securely available for analysis on a real-time basis.
Predictive analytics. Predictive analytics are necessary to analyze historical trends and assign probabilities to different customer scenarios. For example, what is the likelihood that a customer will accept an upsell offer? Predictive analytics are the secret sauce of next best action because they help inform what is best or optimal within defined constraints.
Business rules. Business rules define the type of communication a specific customer receives at a specific point. For example, if a customer owns one product and there are no pending customer service issues, provide a related offer. Once defined, these rules can be deployed across channels.
Speed. The speed of analyzing and responding to information is critical. Customers do not want to wait for a response while a system performs complex algorithms and permutations. Systems must be able to deliver the next best action at the speed of conversation or click.
Ultimately, success with next best action strategies requires adopting a new mindset that shifts the very idea of marketing and service from one-to-many initiatives to one-to-one dialogue. For companies with outstanding customer experience as a goal, this is your next best action.
Mark A. Stevens is vice president, Insight and Customer Strategy, at Oracle.