NBA _Next Best Action

8/10/2019 NBA _Next Best Action

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2011 Forrester Research, Inc. Reproduction Prohibited1


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Next Best Action infrastructure can expand B2C sales,improve customer loyalty, improve agent productivity,and optimize back-end processes.

1

The core applications of Next Best Action are thetargeted offers that deliver value and tailoredCRM experiences that keep customers happy.

2

To maximize value and boost customer quality ofexperience, you should continually tune the predictivemodels and business rules that guide Next Best

Actions across all processes and touchpoints.

3

Next Best Action (NBA) has demonstrable ROI


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Experience: Secret Sauce Behind CRM Success

CRM Next Best Action (NBA): Analytics Driving Value & Experience

Predictive models: The Analytical Heart of CRM NBA

Metrics of CRM NBAs Business Impact

Case Studies of CRM NBA

Recommendations for CRM and BP professionals

Agenda


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Agenda


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What truly drives your business?

Businesses exist to catch, keep, and grow customerrelationships

LoveYour customers love the

experience and value you provide and seek to deepen and extend

the relationship.

MoneyYour investors enjoy the return on theirinvestment and seek to deliver fresh

value to new & existing customers.


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Experience is strategic to CRM success

What golden moments matter most to your customers?

How w il l you mo net ize ROI from experience-bo ost in g pro cesses?

Drive CRM Projects With An Outside-In CEM Approach April 2011 Beyond CRM: Manage Customer Experiences

How w i l l you s hape

those mom en ts

ins ide your bus iness

processes?

How w i l l you

infuse those

processes wi th

t rus twor thy da ta?

Exper ience = sum to ta l o f your in te rac t ions w i th cus tom ersand the impress ion golden o r t a rn ished that l in gers .


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Experiences make and break customer relationships

Customer satisfaction is dynamic, fragile.

Your staff may be barely aware that therelationship hangs by a thread.

Reasons for customer dissatisfaction

often lie buried in your data. CRM databases, call-center logs, email

interactions, business process exceptions,social media listening, etc.

Your most influential customers may bespreading dissatisfaction far and wide onsocial media.


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Experience spreads through word-of-mouth.

Two Types Of Mass Influencers April 2010 Peer Influence Analysis


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Help. I cant find the specific product I need onyour portal or in your stores.

self-servicecustomer portal

call center

point of saleWe appreciate your loyalty.Were prepared to offer you

a version tailored to yourspecific needs.

I love it. Id like toorder it now.

Please ship it ASAP.

Satisfying experience depends on agile engagement


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Agenda





Case Studies: Next Best Action in CRM

Recommendations for BP and CRM professionals

Q&A


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Quality of experience thrives on proactive guidance

Company Strategy Guides Expectations For A Customer Experience Strategy

September 2010 What Is The Right Customer Experience Strategy?

Stuff they taught youin MBA school

Stuff that NBA will helpyour company accomplish


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Next Best Actionbest practices for proactively

guiding and optimizing all offers,interactions, and experiences

across all customer-facingchannels, processes, and roles

Experiences: guided & tuned through Next Best Action


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Next Best Action: heart of agile CRM processes

Best

business

outcomesPRODUCING

Whats the optimalresult that you canachieve with each

guided action?

Next

Best

ctions

Whats the optimal offer,response, or other action thatyou can offer at each step in

each business process?

Betterexperiences

GUIDING

Boostedvalue

CRMNBAprocessplatform

You optimize customers quality of experience through every interaction acrossthe CRM lifecy cle.

If youre retaining customers & growing the relationship,you are probably g iv ing them wo r thwhi le exper iences!


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Experience shaped through every CRM NBA touchpoint

Identify customerQualify customerOnboardcustomerRetain customerGrow customerrelationshipListen tocustomer voiceResolve customerissuesTarget customer

offersMaximizecampaign liftProactivelyresolve issues

Betterexperiences

Boosted value

Sales

Marketing

Service

Manufacturing

Fulfillment

F r o n

t o

f f i c e

/ C R M

B a c

k o

f f i c e

/ E R P

, f i n a n c e ,

e t c

.

CRMNBA

processplatform

NEXTBEST

ACTIONGUIDANCE


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Drive experience optimization into CRM operations

CRM NBA show leverage experience-boosting

investments in: decision automation, sentiment analysis, conversation

management, dynamic case management, knowledgemanagement, and social networking

Use NBA to:

identify burning issues

automatically escalate them, via dynamic casemanagement systems, to customer service reps who canrespond to issues and defuse them before they becomeshowstoppers.

The next best experience should be:

the one you deliver to a customer who is delighted by yourapparently seamless ability to deliver continuoussatisfaction tailored to their precise needs and situation

Sales

Marketing

Service


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Next Best Action: experience optimization via analytics

db

db

db

db

db

db Self-serviceportals

Call center

Email

Telephony/IVR

POSSocial media

Apps servingfront office (call

center, customerservice, sales,

marketingcampaign mgmt.,

etc.) and backoffice

NEXT BESTACTION

GUIDANCE

Recommendations,automated actions,

scripted responses, prompts, offers,

dynamic portal personalization, &

tailored onlineexperiences

EDW = enterprise data warehouse; DA = decision automation; BPM = business process management; BRMS = business rules management systems;PA/DM = predictive analytics and data mining; TA = text analytics; BA= behavioral analytics; CEP = complex event processing, CM = conversationmanagement, KM = knowledge management

Sales

Marketing

Service

Manufacturing

Fulfillment

F r o n

t o

f f i c e

/ C R M

B a c

k o

f f i c e

/ E R P

, f i n a n c e ,

e t c

. CRM, EDW, DA, BPM,

BRMS, PA/DM, TA, BA,CEP, CM, KM, etc.

Predictiveanalytics,

business rules,and

orchestrationmodels

Recommendationengines

CRM NBA proc ess pla t form


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Core of Next Best Action: predicting whats acceptable

call center

We think youll loveproduct X.

Not exactly mystyle.

How about product Y, ourvery latest model?

You offered thatbefore. Moneys

tight. Still not sure.

How about if we offer Y at

50% markdown, with easypayment plan?

Well....OK....Illtake it then.

Predictive analytics models leveraging data mining and statisticalanalysis guide you in recommending

the offers that will prove mostacceptable to customers under

various circumstances.

Business rules identifying the sales, revenue, profit,

and other deterministic consequencesof various scenarios; guide you in

calculating which offers, if accepted,offer the biggest CLV boost.

You can automate scripted presentation of offers by likely acceptability!


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Help. I cant find the specificproduct I need on your portal or

in your stores.


call center

point of sale

priorityorder

expedited shipment

Guide customers with consistent cross-channelexperience

Guide sales, marketing, and customer service totarget recommended next best offers to customerrequirements

Guide order fulfillment, manufacturing, and otherback-end processes to satisfy the customer

We appreciate yourloyalty. Wereprepared to offer youa version tailored toyour specific needs.

I love it. Idlike to order it

now. Pleaseship it ASAP.

Special order for loyal,high-value customer. Build

and ship it ASAP!

And deliver on your promises, link to back-end processes


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Agenda


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CRM NBA: predictions guide every decision

aggregatecustomerdemand?

competitoractions?

product pricingtrends?

availability ofkey factors ofproduction?

failures of criticalsystems and

components?

inventory levelsunder varioussupply chainscenarios?

cash on handunder various

financialscenarios?

how a particularwill respond to aparticular offerat a particularpoint in time?

riskiness ofvarious

businessstrategies?

And can you rapidly assess the bottom-line impact of likely scenarios?


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Predictive models: as diverse as CRM NBA use cases

CRM initiative Multichannel life-cycle customer relationshipmanagement

CRMstakeholders

Brand, marketing,PR, and consumer

affairs teams

Salesteams

Customer serviceteams

CRMprocesses

Customer voicelistening

Customer leadharvesting

Customer life-cyclemanagement

CRM

applications

Customerawareness

Customersentiment

Customerpropensity

Customeridentification

Customerqualification

Customerconversion

Customeronboarding

Customerretention

Customergrowth

CRMmodels Awareness

modelsSentiment

modelsPropensity

models

Customervalue

models

Churnmodels

Upsell andcross-sell

modelsCustomer acquisition models


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Predictive quality: avoid next worst actions

Predictive models are not crystal balls

Next Best Action modelsshould incorporate yourbest historical customer

data...

....and include predictivevariables selected by your

top Next Best Actiondomain experts

Junk models

+

Junk data

=

Junk guidance


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Predictive smarts: experts needed to tune models

And are they

automating asmuch of the

modelingprocess aspossible?

Its not enough to hire a quant or rocket scientist...

Do youhave

modelerswho also

understandyour Next

Best Actionscenarios?


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Agenda





Case Studies: Next Best Action in CRM

Recommendations for BP and CRM professionals

Q&A


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Customers express quality of experience behaviorallyDo customers find their relationship with your companysatisfying?

Do they find it satisfying enough to stay in therelationship?

Are they renewing, extending, and deepening therelationship because you offer new ways for them tosatisfy themselves?

Are they enjoying the relationship enough to tell the world,or at least their friends and family, about the value theyrereceiving?

Do they respond and accept new offers rapidly?

Do they visit one or more of your channels frequently?

Are they able to find and purchase what they need rapidlythrough your channels?

Are they recommending and influencing other people tobecome customers, stay with you, and/or extend anddeepen their relationships with you?


call center

point of sale


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How do you quantify improvements in experience & value?

CUSTOMER LIFETIME VALUE =customers potential monetary worth through course of their relationship with your business, calculated

across entire CRM life cycle, including all functions, processes, channels, roles, campaigns, & touchpoints

MAXIMIZE Directlymonetizable

Repeat purchases; renewal rates; upsell & cross-sell rates; incremental yield in sales, revenues, and

profits per customer, channel, touchpoint,interaction, and agent

Indirectly

monetizable

customer satisfaction scores, customer responseand acceptance rates, customer sentiment trends,customer recommendation propensities, Voice ofthe Customer (VoC) scores, NetPromoter scores

MINIMIZE Directlymonetizable

IT and staffing costs associated with CRM processes (marketing, sales, customer service), andwith associated app, models, data, rules, etc.

Indirectlymonetizable

online shopping-cart abandonment rates; time toresolve customer issues; incidence of customercomplaints; lost opportunities due to misdirected,redundant, or repetitive offers; incidence of wrong,incomplete, or inconsistent info provided tocustomers across various CRM channels


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But this isnt cheap: dont goldplate the experience!

Customer relationship management

Enterprise data warehouse

Business process managementBusiness rules management

Decision automation

Predictive analytics and data mining

Text analytics tools

Behavioral analytics tools

Complex event processingConversation management

Knowledge management

Sentiment analysis

Social media analyticsDynamic case management

Business intelligence

CRM, EDW, DA, BPM,BRMS, PA/DM, TA, BA,

CEP, CM, KM, etc.

Predictiveanalytics,

business rules,and

orchestrationmodels

Recommendationengines

This is a com prehensive

cus tomer exper ience

m anagement (CEM) NBA

plat form

These are th e IT

investments involv ed in

bui lding o ut that p la t form

Sales

Marketing

Service

F r o n

t o

f f i c e

/ C R M

An d the processes

and channels

And the rocketscientists


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Agenda





Case Studies: Next Best Action in CRMRecommendations for BP and CRM professionals

Q&A


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Targeting auto-generated offers from portal clicks

Company Japanese online retailer

Requirements and ROI Experience-focused goal : improvements in customer

satisfaction

Bottom-line metrics : improvements in customer retention,upsell, and cross-sell; realized 30% increase in marketingcampaign revenue lift

Applications and approach Experience-boosting approaches : real-time targeting of next

best offers in B2C portal, recommendations driven by pastpurchases, customer profile information, and customerclicked-on items in the portal browser session

Underlying NBA platforms and tools : predictive models andcomplex rules


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Simplifying multichannel B2C conversations

Company European telecom carrier

Requirements and ROI Experience-focused goal and metric : enhance customer satisfaction

through simplicity of experience across multiple inbound and outboundchannels; has seen improvement in customer satisfaction but has not

compiled formal metrics Bottom-line metrics : improve customer retention; boost upsell and

cross-sell

Applications and approach Experience-boosting approaches : next best offers in call center

through auto-generated recommendations displayed to agents oninbound contacts; next best offers through targeted outbound directmarketing email, postal mail, SMS, and phone calls

Underlying NBA platforms and tools : leveraging predictive models,data mining historical customer data, and CRM marketing campaignoptimization


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Personalizing cross-channel B2C interactions

Company British financial services firm

Requirements and ROI Experience-focus ed goal and metric : one-to-one personalization of

B2C cross-channel communications; improvements in customersatisfaction

Bottom-line metrics : realized 20-30% increase in upsell and cross-sell

Applications and approach Experience-boosting approaches : targeted offers in outbound

statement inserts, direct email, and SMS messages; portal-basedauto-prompts, contextual reminders, and other sales and non-sales-related functions

Underlying NBA platforms and tools : predictive models, datamining, historical customer data, CRM marketing campaignoptimization, and Web analytics tools


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How to get started?

Identify your key Next Best Action requirements in sales,

marketing, and customer service. Evaluate the Next Best Action features of your existing CRM

platforms.

Evaluate stand-alone Next Best Action tools that can beintegrated with your CRM, EDW, BPM, predictive analytics,business rules engines, and other infrastructure.

Evaluate the customer experience management features of

your existing CRM platforms, as well as those of the socialnetworking, knowledge management, and other applicationsdeployed across your multichannel CRM environment.


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How to succeed in the long-term?

Make automated Next Best Actions the core of your CRM and

BPM strategies Couple a comprehensive CRM process with predictive analytics

when architecting next best offers.

Make your EDW the foundation of your recommendation engine,but also integrate existing investments in advanced analytics.

Automate the modeling, scoring, and fine-tuning of CRMpredictive models that drive Next Best Actions.

Continually measure experience improvements from your CRMNBA initiatives and adjust your program to align performancewith key business imperatives


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2009 Forrester Research, Inc. Reproduction Prohibited

Thank you

James Kobielus+1 703.922.6829

[email protected]


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NBA _Next Best Action