The key to successful 1:1 customer engagement
Understanding your customers and keeping them happy sounds like an easy task doesn’t it? The truth, however, is that as customers continue to evolve and their needs become more demanding, it becomes more and more difficult for businesses to keep up. By now it’s well established that the majority of traditional marketing is based on segmented product push campaigns. In today's hyper-digital world, consumer’s interactions with businesses and organizations will be more common. As an organisation, you need to be able to make personalised decisions in a split second. Every customer interaction should be current and relevant, no matter what happens next. Keeping up in a changing market (as well as evolving customer needs) doesn't have to be complicated. Everything is about deploying the right technology: the basis of effective 1:1 customer engagement (CE).
Today’s customers are used to having what they want, when they want it. Whether it’s a direct response to an Airbnb reservation, or an order from Amazon delivered to your doorstep the next day consumers are no longer triggered by a mailbox full of segmented sales-oriented product campaigns. On the contrary, this can lead to a lot of annoyance: the average response rate with traditional marketing campaigns is only 1%, which means that the other 99% is causing considerable irritation.
So how do you change the way you operate and make sure you are more in line with your customers and their demands? A good example can be found with Vodafone, who found that previous technologies had siloed their marketing channels and limited their ability to combine inbound and outbound marketing as well as their ability to engage on a one-to-one basis. Instead, in a bid to better serve their customers’ needs, they launched an 'Always-on-Engagement' model with real-time, hyper-personalised and relevant content during every customer interaction across all channels. The result: 300% improvement in offer acceptance, £1 increase in ARPU, per customer, per month and £100M+ incremental profit, annually.]
An empathic organisation
Effective customer engagement stands or falls as a result of a number of factors. A first determining factor is empathy; the ability to listen, respond to context and adapt can be critical. Until recently, the empathic ability of most systems was virtually nil. ‘They didn't listen', was a common refrain from customers who found companies were not contextual and instead simply pushed communications to them, regardless of their situation. With an empathic approach you can learn from what the customer is saying and apply this information directly at the time the conversation takes place and understand what is most important to them. The result is a two-stage effect: on the one hand, improving the service offer and proposition, on the other hand gaining more knowledge of what needs to happen next with the next customer.
A good example of what this can look like when implemented successfully can be found with Rabobank, the second largest bank in the Netherlands, which uses machine learning and predictive analytics to learn to listen to and then personalise its omnichannel customer service. "In order to move from sales-oriented product campaigns to focus on the lifetime value of the customer, we first had to move towards a 1-to-1 approach with our customers", says Coen Wiers, Senior Product Manager, Customer Relevance at Rabobank. The result: 400% increase in sales opportunities.
Protect your reputation
A second important factor – and possibly the most sensitive one - is the extent to which you as an organisation can rule out bias. It’s undesirable to have decisions being made on the basis of biases from data or processes and within an analytical model. Unfortunately, this happens more often than you might think. A built-in ethical bias check automatically subjects each next-best-action to possible bias and thus provides insight into where any sensitivities lie and what caused them.
Make it easier for your customers
Then there is the diversity of channels created by ourselves. It’s well established that consumers choose the channel that suits them best at that time, but what’s less known is how freely they switch channels. Achmea calculated that 41% of customers change channels during such a conversation with an organisation (which in some cases can take up to a week), sometimes going from the website to the phone, to chat, to a mobile app and back to the website. The trick is to remember what the discussion and specific customer response was as well as, crucially, how you as an organisation further develop that response. Adopting this approach for Achmea, who saw a 27% increase in sales and 85% customer retention.
Adapt without rebuilding: Centre-out
Without any major adjustments to their IT systems, organisations can start using an orchestration layer. This might sound almost too good to be true, but it is a requirement to be able to be customer-oriented over product siloes. It is actually a customer decision hub' that makes it possible to give the right information in a consistent manner within all contact moments and channels, to the customer and the employee. After taking into account customer context, the information is adapted in real time and presented in an existing CRM environment, website or mobile application. So, with live data and business strategies from the decision hub the next best action can be predicted for each individual customer, without rigorously changing the front end. Besides, data from the more product-oriented systems is used in which customer-specific information is stored about duration, payment behaviour, type of subscription etc. Each optimal customer interaction requires both types of data.
We need to change
What’s clear is that all this requires a 'unified' system, not a new silo. A system in which the interaction with a customer can be picked up directly through a case where all available data is presented in every customer service environment. This is true at an organisational level as well – for example, you might want to expand your channels into a mobile app and, as a result, you always stay in the same environment and can also call that customer-specific case from another application. There are a number of things you might want to check; What's the status? How's it going? How long is it going to take? And besides - what's the next best action for the moment? It's about that two-unit within your organisation.
This applies equally to large enterprise companies that already have a lot of analytical tools in-house and find it hard to change because of all that existing legacy technology. A complementary technology can also do orchestration for these companies from these different pieces of intelligence, including from certain campaigns and models.
Swedbank is one of the largest savings banks in Sweden, having made the transition to an omnichannel world and is now positioning itself as a digital bank with physical meeting points. The bank has struck the right balance between the growing demand for digital banking and customers who prefer traditional channels. To achieve this, they have realised that they need to be better at converting customer data into customer insights, in order to offer tailor-made services, products and offers.
Ultimately, empathising with your customers, understanding their needs and interacting with them in the most relevant way isn’t an easy process. There are multiple considerations: from context, to multiple channels, to instances of bias – all of these things need to be addressed if successful customer engagement is to be delivered. The good news is that the right technology is available to allow you to do just that!
If you’d like to hear more about success in 1:1 customer engagement, register here for the Pega Discover: 1:1 Customer Engagement Online Summit on October 7, 2020.