Adding Next Best Action To Personalize Interactions For Known Customers Then Creating Cognitive Customer Centric Interactions Steven Pinchuk WW Lead Customer Intelligence & Revenue Management Advanced Analytics Center of Competence 1 IBM
Preface The following slides describe a concept in delivering timely and personalized interactions with customers. Below is a preface and a link to a You Tube video with a larger narrated presentation on this topic Real Personalization Using Next Best Action and Cognitive Customer Centric Interactions An introduction to "Next Best Action" (NBA) and Cognitive Customer Centric Interactions. (C3I) For some reason, You Tube is starting the video on the Agenda Page. Please "rewind" the video and start on the Title Page to hear the introduction The video begins with a 45-minute introduction to NBA, which is a customer interaction technique that enables a company to build truly interactive and personalized relationships with customers. NBA works with traditional marketing campaigns and adds a new customer interaction technique that enables more personalized and timely customer communications. NBA can be used for any kind of customer interaction or action. NBA enables customer triggered one to one personalized actions and interactions with individual customers and is being used today by many companies across industries. After explaining NBA there is a 20-minute introduction to "Cognitive Customer Centric Interactions" (C3I). C3I is a new customer centric concept and approach that uses cognitive advanced analytics to orchestrate all the responses and interactions, both campaigns and NBA, with your known customers across all channels. C3I optimizes each customer interaction based on the data and analytics available for that customer and that interaction and determines what action, customer interaction technique and channel is best for that action at that time with that customer. The goal is to stop treating a customer as a tactical marketing target and create the most personalized interactions possible with every interaction and nurture 1 to 1 long term customer relationships. https://www.youtube.com/watch?v=tdhwksdmtaa 2 IBM Corporation Confidential
Agenda Introduction Customer Expectations What Does Next Best Action (NBA) Do? How Does Next Best Action Do This? NBA Case Study 3 IBM Corporation Confidential
This is not vapor ware. Here is the elevator pitch. Next Best Action (NBA) is a technique for creating customer triggered personalized interactions for known customers. NBA is in operation globally at many of the leading banks, insurance, telecom and some retail companies handling thousands of real time interactions per second. Cognitive Customer Centric Interactions (C 3 I) is a new concept that optimizes the selection of all customer actions, for both known and unknown customers. Early C 3 I functions are being built today using rules engines and are being called offer arbitration. Adding predictive & prescriptive analytics, AI, cognitive and real time optimization, for each action with each customer, from the perspective of each customer, will create mature C 3 I. C 3 I optimizes each customer interaction, based on the data and analytics known about that customer for that interaction, and the relevance of that action, to that customer at that time. The goal is not tactical sales targeting it is customer lifetime value 4 IBM Corporation Confidential
Agenda Introduction Customer Expectations What Does Next Best Action (NBA) Do? How Does Next Best Action Do This? NBA Case Study 5 IBM Corporation Confidential
Expectations: Customers want it their way or they will leave to find it. Customers want a mutually beneficial lifetime relationship not impersonal tactical sales targeting Find me Educate & Grow with me Do you know WHAT Your Excite me Once you break the relationship it will cost a lot to rebuild it if I let you Let me choose Know ME Respect my time & privacy Do not send me spam!!! Or I might just leave you or ignore you until I want something Customers WANT? Can You Consistently Give Them What They Want ANYTIME, ANYWHERE? Predict what I want & give it to me when and how I want it 6 IBM Corporation Confidential 10
Agenda Introduction Customer Expectations What Does Next Best Action (NBA) Do? How Does Next Best Action Do This? NBA Case Study 7 IBM Corporation Confidential
What: NBA adds a new technique and 2 new channels to the known customer communications continuum Who starts the action Customer Segment Campaigns Type of action Level of personalization Market Segment T R A D I T I O N A L M A R K E T I N G company triggered & non-triggered company triggered & non-triggered Behavioral Cluster NBA 1 to 1 Personalized Interactions Now let s add Next Best Action(s) N E W N B A M A R K E T I N G customer triggered outgoing batch 1 to 1 NBA actions customer triggered inbound real time 1 to 1 NBA interactions Individual 8 IBM Corporation Confidential
What: NBA can be used to add analytics and customer triggered personalization to many customer interactions. NBA is a technique you can apply in many types of interactions. Acquisition Retention Cross-Sell & Up-Sell Personalize Experiences ecommerce Real-Time Recommendations Call Center Optimization Pricing Optimization Location aware interactions 9 IBM Corporation Confidential
Agenda Introduction Customer Expectations What Does Next Best Action (NBA) Do? How Does Next Best Action Do This? NBA Case Study 10 IBM Corporation Confidential
How: A Use Case is developed for each NBA decision process. Here is the anatomy of a use case Individual Data, Behaviour, Analytics results 4 Decision Input, Actions and Outcomes 7 * * Additional information (Watson) Information & Analytics 2 Context 3 Use Case Decision Process Cognitive Feedback Marketing New Products 1 Use Case Trigger / Interaction 5 Action 6 Implement the Action or Offer Loyalty Operations Supply Chain USE CASE Data Signals a Trigger Event * Gather social & external/internal unstructured data & apply it to NBA customer profiles or use it for event or life event triggers 11 IBM Corporation Confidential
Structured - Unstructured Cognitive & Analytics How: NBA is the analytical engine between your data and your customer communication channels Data Sources (structured & unstructured) Next Best Action Predictive Analytics Engine & Platform Multiple Customer touchpoints Chat Call Center Mobile Apps Web SMS Transactional Data External data - social, blog Customer Interaction History Improved lift and response Target new customers Next-best product / offer Event driven marketing Decrease call times / increase FCR Proactive customer care / reduced calls Increase spend /CLTV Personalized care Cart abandonment Customer Actionable Customer Analytics Insight Reduce returns/ Excessive fees Decrease churn/ attrition Increase frequency of spend Move to preferred services Increase activity in loyalty programs Increase customer satisfactio n/nps Outbound Batch Mode SMS E-mail Direct mail Social Mobile Apps Inbound Real Time Face to face Chat Call center Social Mobile Apps Web Customer Demographic Data *Adapted from Forrester, 2014 12 IBM Corporation Confidential
Structured - Unstructured Cognitive & Analytics Thought Leadership: 1 to 1 NBA is integrated with campaigns via an arbitration layer DATA Chat Call Center Mobile Apps Web SMS Transactional Data External data - social, blog Customer Interaction History Customer Demographic Data Feature Vector / Action Cluster Cognitive Lifetime Value Maximizer SEGMENT CAMPAIGNS & NBA 1 TO 1 INTERACTIONS Predictive Modeling Data Repository for Real-time Analytics Campaign Engine for Market Segments NBA 1 to 1 Engine Model Repository Segmentation Model Acquisition Model Up-Sell/Cross-Sell Model Campaign Response Model Lifetime Value Maximizer Sentiment Analysis Churn Model Integration Bus Real-time & In Session Scoring Reporting C 3 I ARBITRATION & OMNI CHANNEL 13 IBM Corporation Confidential Marketing Arbitration & Omni Channel Engine Real time NBA execution & ARBITRATION engine Existing or New Interfaces and API s FULFILLMENT & ACTIONS Outbound Interactions Inbound Interactions Points of Interaction Direct Mail Email SMS Call Center Chat Social Mobile Apps Web SMS
Agenda Introduction Customer Expectations What Does Next Best Action (NBA) Do? How Does Next Best Action Do This? NBA Case Study 14 IBM Corporation Confidential
Boots uses NBA to choose the best offer for customers and profits Business Challenge: Managing complex, massive loyalty program that includes 2/3 of the UK s female population Inefficient cross channel execution - website, email, kiosk, direct mail not used in a coordinated fashion Inability to deliver relevant, personalized offers Solution: Next Best Action Behavioral analytics to transform approach to marketing, providing a compelling cross-channel experience that draws customers in and encourages higher spending. New customers insights using propensity-to-buy models to understand individual habits/ preferences and how they are affected by seasonal trends, special discounts and targeted actions. Create a more personalized, consistent experience across channels: physical stores, online and mobile app. Result: 400% increase in incremental sales to loyalty card members who received personalized offers 70% increase in annual volume of tailored offers enabling targeted marketing at greater speed and scale Marked improvement in customer satisfaction ranking vs competitor retailers 15 IBM Corporation Confidential
Optum uses NBA for call center optimization Business Challenge: Engagement happens by business line (not cross business) Overwhelmed customers, disjointed offers, costly engagement, sub-optimal customer experience. Solution: Next Best Action Real-time scoring generates and re-generates predictions Real-time offer management optimizes how they target consumers, reduces costs and increases c-sat. Predictive analytics anticipates the behavior of individual customers Decision management converts predictive model scores into appropriate personalized customer triggered actions Arbitration of campaigns and actions identifies the most profitable action for each customer Customers can be classified and recommendations generated to provide opportunities for retention, upsell, cross sell, loyalty, etc. Result: 57% increase in offer acceptance Reduced Cost per engagement by changing model to leverage NBA inbound channel Optimized Utilization of services, reduce medical expense and personalized services 16 IBM Corporation Confidential
IBM is #1 in Big Data Predictive Analytics and that is NBA NBA is cognitive analytics on steroids. NBA success depends on the analytics. IBM assembles an impressive set of capabilities, putting predictive at the center. No matter how an organization wants to get started with predictive analytics, IBM has an option for them. [ ] IBM s predictive analytics has the power to take on truly big data and emerge with critical insights. - Forrester The Forrester Wave: Big Data and Predictive Analytics Solutions, Q2, 15 17 IBM Corporation Confidential
THANK YOU! 18 IBM Corporation Confidential