NBA: Next Best Action for Businesses AND their Customers

NBA 2Interactions between businesses and their customers are typically defined from one perspective or the other. Businesses conduct marketing activities to acquire, cross-sell and retain customers.  Many tools–including CRM, marketing automation and campaign management–are utilized for these purposes. However, with increasing commoditization of products and services, providing a better customer experience has become the key differentiator among businesses competing for customer attention. Despite such terminology as customer experience management and customer relationship management, however, businesses cannot manage the customer experience. Indeed, the power has shifted to customers, who want to be treated on their own terms.

Another term, Next Best Action (NBA) reflects the efforts of marketers to present the offer that a particular customer is most likely to accept, or any content, moreover, that is most appreciated by the customer. When the right offer is delivered to the right customer, via the right communication channel, the needs of marketers and customers are aligned. But when customers receive irrelevant offers and messages, it damages both their experience of the brand and the brand’s ability to sell products. When done well, NBA dramatically increases customer acquisition rates, cross-sell revenues, as well as long-term customer loyalty and value. It also provides a superlative experience for customers, underlying the point that what is best for the customer is also best for the business. So what do marketers need to do to implement an NBA strategy?

Enablers of Next Best Action

NBA ArchitectureFigure 1: NBA Functional Architecture

Figure 1 depicts the high level functional architecture for NBA solutions.  Let’s take a look at each of the key enablers of next best action, noted in the blue shapes above:.

Data Integration. First and foremost, NBA relies upon extreme personalization.  The next best action for one customer is usually not the best action for another. Personalized messaging and offer management, however, requires a tremendous understanding of one’s customers. For most companies, customer data resides in disparate databases. Data may be siloed by business function (e.g., marketing, sales, customer service, and finance), business unit, or communications channel.  The implications of fragmented data are numerous. When various functional departments have their own data sets, their interactions with customers cannot be coordinated in a consistent manner. This results in a fragmented customer experience for the customer. When each business unit or product group has separate databases, they cannot offer the relevant cross-sells to customers of other business units, inhibiting the growth of Enterprise revenues. When different channels are unaware of the customer’s activity in other channels, moreover, offers cannot be coordinated across these channels, also resulting in a fragmented customer experience and reduced revenues.

As customer journeys move from one channel to another, businesses need to provide continuity. For instance, if customers are trying to accomplish something on the company’s website, and encounter difficulty, they are likely to call the call center for help.  When a customer service representative answers the phone, s/he should know what the customer was trying to accomplish on the website and where he or she got stuck, without having to ask the customer. As another example, if a customer already accepted an offer by signing up on the web, s/he will not be happy to receive the same offer via email.  Offers that have been accepted in one channel must be suppressed from appearing in other channels. Each channel, moreover, needs to reinforce the messaging in other channels in order to efficiently convert prospects to customers and customers to more lucrative customers.

Unfortunately, the data not only resides within different databases, but is typically organized in disparate formats, where it is difficult, at best, to integrate the data to develop the needed 3600 view of customers.  One solution is to develop an integrated customer data warehouse, leveraging ETL, whereby the data is extracted from the original database, translated into a common data format, and loaded into the integrated data warehouse. Of course, this requires a tremendous amount of storage and effort.  When new data sources become relevant, these too need to be integrated in a similar manner.  A more recent trend is to leverage “big data” or “in-memory computing” solutions.  These solutions are able to take disparate data from each of the data sources and place them in computer memory where they can be analyzed and acted on in real time–to help derive the next best action.

Predictive Analytics.

For data to be useful toward presenting the next best action, it must help predict the likelihood that any given offer will be accepted by a given prospect or customer. Based upon the patterns of data that are mined, predictive analytics are used to score each potential offer or other form of content.  First, predictive models need to be built that demonstrate their ability to predict outcomes of a marketing campaign. Second, the relevant data for each customer or prospect must be entered into the model.  Models are typically modified based upon new data about campaign outcomes for continuous improvement. The results of predictive modeling comprise one of the key inputs into making the right decision about the next best offer for any given individual.

Business RulesEvery business has a set of rules that dictate how and when offers are presented to prospects and customers.  For instance, to ensure customers are not inundated with more offers than they care to see, businesses establish rules as to how often customers can be contacted, how often an offer should be presented, etc.They often apply other types of rules as well.  For instance, with all other things being equal, a business might decide to offer the most profitable, high-margin product or service to the customer.  Industry regulations must also be translated into business rules to ensure businesses are compliant with the law. In the B2B world, contracts between suppliers and customers may dictate the types of products or services that suppliers can offer to their customers.  Some contracts might stipulate, for instance, that a supplier may only offer a basic service or product to the customers’ employees.  This requires a business rule to be established to suppress any up-sell or cross-sell offers for such customers.

Decision EngineOnce the competing offers or messages are loaded into the system, a platform is required to make the decision regarding the next best offer or message for a given customer based upon the available data, predictive analytics and business rules. These can range from generic decision engines to complete campaign management solutions that address the entire process.  Some of the leading decision engines are Oracle RTD (for real-time decisions), SAS Real-Time Decision Manager and SAP Real-Time Offer Management.

A more complete multichannel campaign management solution includes some type of decision engine, but also provides list management, campaign management and channel delivery across multiple communications channels.  These solutions are either sold stand-alone or as (somewhat) integrated product suites.  Examples include IBM Campaign, which handles outbound communications channels (e.g., direct mail, email, SMS texts, outbound phone calls, and mobile notifications) and IBM Interact for inbound channels (e.g., web/mobile, social media, inbound call centers and point-of-sale or retail).  Teradata also has complementary products to manage multichannel campaigns.  SAS Marketing Automation handles both inbound and outbound campaigns and integrates its data science tools to improve predictive modeling. Adobes provides perhaps the most complete (and most expensive) solution—the Adobe Marketing Cloud—which includes modules for Campaign Management (outbound), Experience Management (inbound), Social Media, Analytics and others.  Both Gartner and Forrester publish ongoing reports comparing the various platforms available from these vendors.

Whether a company needs to invest in a real-time decision platform depends largely upon delivery channels and the frequency of interaction with the target audience. . For instance if a bank is merely sending out occasional statements with marketing messages, only batch processes, easily handled by mainframe computers, are really required.  However, for companies who have a broad number of offers that change rapidly in importance or value, real-time decisions are required.  This is especially true when leveraging highly interactive channels such as the web, mobile and social.  When an individual is on a company’s website, for instance, offers should be updated in real-time depending upon the latest actions of, or information about, that individual.

In summary, marketers and their customers have mutual interests.  A customer’s experience is derived from the sum of their interactions with a brand. The most relevant and timely offers or messages will not only provide a better experience for the customer, but also increase take rates on marketing offers. That, of course, leads to increased customer acquisitions amd sales as well as greater customer retention and lifetime value, the key goals of marketers.

Top Internet Trends for 2013

Mary Meeker and Liang Wu of Kleiner, Perkins, Caufield & Byers just published the industry’s most highly regarded study of Internet Trends for 2013. While I have linked to their original Slideshare document below, some of the most striking findings from this year’s reports include:

  • US is losing its dominance in internet users. While Iran has the fastest growing internet population (205% within the last year), China, has the highest number of overall internet users worldwide (204 million).
  • Ad money spent is not proportional to the amount of time people spend with different media sources. Thus while people spend on 6% of their media time reading print publications, companies spend 23% of their ad budget on print. Conversely, while people spend 12% on mobile devices, companies spend only 3% of the budgets on mobile advertising.
  • Content is growing multiplicatively, as the amount of digital content has increased 9X over the last five years and is still expected to quadruple by 2015.
  • Mobile usage continues to grow at staggering rates, particularly among tablet users.
  • Wearable devices will become more prevalent, providing more functionality with less interruptions, than current devices.
  • Short form media is overtaking longer formats as photos are increasingly uploaded to Snapchats (where they last for only 5 seconds) and videos uploaded to Vine (with a maximum length of 6 seconds

The original Slideshare presentation can be found at KPCB Internet Trends for 2013

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Will QR codes rescue print?

QR Code for http://robkaminoff.comAs a multichannel marketer, I have worked with many magazines to secure print advertising as well as printing companies to print brochures, catalogs and direct mail pieces. As the world (including me) moved toward less expensive and more trackable digital media, the last several years have been miserable for a lot of my contacts in these fields. Many print advertising salespeople have lost their jobs and many printers have gone out of business. Generally speaking, print advertising is good for branding, but not for lead generation.  People are not likely to put down a newspaper or magazine to go on a computer to respond to a call to action on the web.  (When is the last time you put down a magazine or newspaper to type an advertised URL into a computer?). When your smartphone or tablet scans a printed QR code, it takes you into the digital world.  Most applications transport you to a website (which should certainly be optimized for mobile devices) and show you additional information–such as videos, product specs, coupons and contests,  as well as “Buy Now” and social sharing buttons that you can take action on.  Now your printed information is no longer static; it is fully interactive and far more engaging!  For the first time, businesses can track, test, measure and optimize the effectiveness and ROI of their offline advertising campaigns, including an understanding of the messages, QR codes and print media that result in more scans and conversions.

Growth of QR Codes

While QR codes are still relatively new to the United States, they’ve been actively used for over a decade in Japan, where they were invented.  However, QR code adoption in the US has increased 4589% from the first quarter of 2010 to the first quarter of  2011 and eleven of the Fortune 50 companies are integrating QR codes into their marketing strategy.  Some factors fueling this grow include:

Increased smartphone usage.   While standard feature phones have the ability to scan these QR codes, they do not provide a very good mobile experience.  Smartphones, on the other hand, offer consumers the ability to seamlessly transition through information with ease.  This provides businesses the opportunity to engage more deeply with customers and prospects.  According to  Nielsen, sales of smartphones will overtake those of  feature phones in the US by the end of this year.

Acceleration of Tablet Computing. Tablets also offer QR code scanning capabilities. The added real estate and power of tablet computers have the potential to offer consumers incredibly rich, engaging and unique online experiences.  In a 2011 report, Forrester says many etailers report that half of their mobile traffic is already coming from tablet devices.  Be sure to stay tuned on this trend!

Improved scanning and generating applications.  In the past, a big obstacle for this technology was a lack of good, free QR code scanning applications.  Now many such apps are available.   Blackberry and Nokia already provide  QR scanning capabilities in their native camera apps. Soon enough, we will see these capabilities bundled with the OS of iPhones, iPads, Android and Windows Mobile devices. There are even free apps for businesses to generate their own QR codes that will trigger unique experiences for those who scan them.  Of course those that can most easily be customized and provide powerful metrics may cost a small amount of money.  More often than not, the advanced capabilities provided by paid apps yield a high ROI.

Standardization. In recent years, several companies unsuccessfully tried to push their own proprietary codes and scanning application, causing a lot of confusion for both businesses and consumers as to which code/scanner to use. The industry needed consistency to to ensure cross-platform applicability. The battle is over and QR codes have won, providing universal compatibility and the confidence that applications can scale and provide a consistent user experience.

Google’s Integration of QR Codes With Local Search. Google has sent hundreds of thousands of window decals to storefront businesses to seed the market.  The decals include QR codes that people can scan to pull up the business’ Google Places page to get directions, reviews, hours of operation, news and coupons. This effort is still morphing as Google adds more features for local advertisers.

Our Move to an ‘On Demand’ Economy, where we “want our information and want it now.”  Due to incredible advances in technology, consumers can now instantly gain access to almost all desired information; they no longer have to make a mental note to look up the information later in the day. This caters to our impulse desires by connecting our curiosity with the information that we are curious about.

Powerful Mobile Commerce Tool.  Merchandisers can quickly provide a lot more information about products so that consumers have the confidence to buy them right away.  mCommerce is actually safer than standard eCommerce due to the strict information protection by the carriers (Verizon, AT&T, Sprint, etc). Once trust is gained, QR codes will be an invaluable asset to mobile commerce campaigns as they will be able to instantly direct consumers to a category or product page where the items can be purchased.  Instead of “batch” processing a bunch of transactions on a computer, users can conduct them singularly “on-the-spot” wherever and whenever they like.

What exactly are QR codes and how can I use them?

A QR code is a 2-D version of a bar code. Because QR codes  contain a second dimension, they can contain 1,000 times more information than barcodes.  Two types of applications, one for businesses and the other for consumers, are required for QR codes to make their magic.

smartphone with QR readerConsumers need a QR code scanner/reader to be able to read the QR code.  Although this is included in the native camera applications for Blackberry and Nokia smartphones, there are dozens of apps that provide this functionality for iPhones and Android devices.  It is rumored that the iOS5, the iPhone operating system to be bundled with the iPhone5 (or 4Gs, whatever they call it!), will contain this functionality too, and its only a matter of time when this gets incorporated new versiond of the Android and Windows Mobile platforms.  The screen to the left, shows how a third-party app integrates this functionality into the iPhone’s camera application.

Businesses require a QR code generator to  determine the action taken by the consumer’s smartphone when it scans a QR code (e.g., open a web page, dial a number, or send an email).  The business can include the QR code in print ads, direct mail pieces, packaging, merchandise tags, articles of clothing, signs, storefront stickers, business cards, etc.  The action takes place when a consumer scans the code with his or her smartphone.  Most applications open a smartphone’s web browser where additional information can be acted upon, including videos, product specs, coupons, contests,  “Buy Now” and social sharing buttons.

Advanced analytics. Businesses can integrate their QR codes  with campaign and web analytics, and learn how many people scanned a particular code via different print channels and associated conversion activities (such as providing an email address, placing a phone call, buying a product, or sharing with friends on a social network).  For the first time, marketers can understand the effectiveness and ROI of their offline marketing campaigns as they can with online campaigns (although they will still have to wait until the next ad or printing to incorporate their learnings!).

Sample Applications

QR codes offer immense value for businesses and their customers.   They give customers the ability to interact with businesses in new ways and obtain more information about companies, as well as the products and services they offer.  They help businesses track the effectiveness and ROI of their offline marketing efforts and differentiate themselves from their competitors.  Here are some illustrative examples:

QR code in Ralph Lauren ad

Print Advertising. Place QR codes into your print advertisements and other marketing materials.  You can connect them to a specific website or video that elaborates on the advertising, enables social sharing or e-commerce. Ralph Lauren has started doing this with their magazine ads.  Note that the advertiser gave instructions as to how the QR code can be used.  This represents a best practice until the use of these codes become more prevalent among businesses and consumers.  You can also use QR codes in any of your marketing materials to direct viewers to a how-to video,  review site, your blog, Twitter and/or Facebook  account, or a mobile coupon.  If you have a mailing list, add a QR code to direct interested customers to a sign-up form.

QR code on real estate signBillboards and Signs. Another great place to print your QR code is a billboard or sign. In this case, a real estate sign includes a QR code.  When scanned, it can take the individual to a virtual home tour, a listing of comps in the neighborhood, or other properties listed by the broker. For signs and billboards, it is important to make the QR code large enough so it can be scanned from the appropriate distance. 

 

QR card on business cardsBusiness Cards.  A relatively simple way to leverage QR codes is to put them on your business cards.  It can have the same result as a vCard so that your contact information–including name, phone number, email address, physical address and URLs for you website and social network presence–can be saved in the scanning phone’s contact list or address book.  A related application is to put such codes on your name tag when attending events.  This is terrific conversation starter, as well as a way for people to network with you on a go forward basis.

QR code on t-shirtArticles of Clothing.  Turn your fans into walking brand ambassadors by getting them to wear QR codes that, when scanned, provide the messaging that you want to present. This can provide a powerful viral effect!

 

 

QR code in storefront windowStorefront Sticker.  Point people to your Google local listing, Yelp page, Foursquare check-in, reviews, menu, products, services, people, company website, etc.  Offer coupons that can be used right then and there, or later.  Show your hours of operation and enable people to make appointments or reservations.

 

 

Payment.  Starbucks accepts payments by scanning a QR code on your Starbucks Card!  In general, Starbucks has been on the forefront of experimenting with QR codes.  The myStarbucks application enables a consumer to store the recipe for their favorite coffee concoction and share it with other people. They can send their request for a grande skinny caramel macchiato with two sugars to a co-worker heading to a Starbucks and be assured that they get it right. The application can even help people choose the flavor of their coffee, be it earthy, nutty, bold, smooth or balanced. Users can also find nutritional information for everything offered in the store, a list of nearby Starbucks stores, and the amenities that each provide, such as changing tables in the restroom.

 

QR codes for electronics in best buyIn-Store Placement.  Place QR codes around your establishment and on merchandise tags, for users to scan and learn more about certain products and/or your company. Best Buy uses QR codes in their product merchandising, enabling customers to obtain much more interactive information than what is provided in standard point-of-purchase cards (or even salespeople for that matter!), including expert and consumer reviews, comparison specs, and how-to videos. Restaurants can place them on napkins to obtain reviews.  Although people typically do not go out of their way to provide positive reviews, they often find a way to rant about their negative experiences. By making the review experience simple, a restaurant can increase the ratio of positive to negative reviews. QR codes placed next to pieces of art can help art galleries sell more pieces, while museums can finally replace those aging audio tape tours! Hardware stores can link to how-to videos on YouTube for each power tool. Food manufacturers or groceries can link to pages that address how their products are sourced or provide additional benefit statements.
QR codes for scavenger hunt
Scavenger Hunts.  Scavenger hunts have become one of the most popular QR applications because they are highly interactive and engaging and offer the opportunity for participants to win prizes.   People are asked to scan as many of the QR codes that have been placed in an area.  Some are relatively easy to find, while other more difficult.  The individual who scans the most QR codes wins the contest!

United Airlines boarding pass with QR codeOnline Ticketing and Boarding Passes.  In your rush to the airport, have you ever lost your boarding pass? United Airlines was the first to allow customers to use QR codes on their phones as boarding passes.  Since then, scores of airlines, sports venues, concert halls, museums and theaters have jumped on board with similar ticketing applications and passes.

The list of potential applications for QR codes is endless.  What examples and applications have you seen that look or sound interesting?

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A Brief History of Online Merchandising and Thoughts About the Future

shopping-websiteBefore the web came along, catalog companies were the first to experiment with merchandising techniques designed to overcome the lack of a fully immersive in-store shopping experience. Punchy and persuasive product descriptions, detailed specifications, and imagery were needed to compensate for the lack of interaction with sales agents. The better catalogs have included lifestyle shots of how customers use their products, rather than merely listing products or showing photographs of products. Instead of listing products in alphabetical order, they tried groupings based on themes, styles, designers, complete outfits, etc. Continue reading

Why Tweet?

My social Network on Flickr, Facebook, Twitter...

I can’t believe how many people still can’t see the value of  Twitter! That’s because the hype has focused on the tremendous growth of Twitter as a social network. and the apparent lack of  Twitter’s ability to monetize their traffic (although this too is changing). That leads many veterans of the 2000 tech bubble to be wary of  “eyeball metrics” when business models haven’t been fully thought through or well executed.  Then of course everyone gets in on the 7 Tips for Optimizing Your Presence on Twitter gravy train which propels the lemmings into the Twitter sea, with no sense of  why they are there or where they are actually going. Continue reading

Marketing Your Way Through The Great Recession

RecessionSo your company is taking a big hit during this severe recession and analysts tell us that things will get worse before they improve.   Typically, marketing expenditures are the first to be cut in order make up for losses in revenue.  But is this the right thing for your business? Continue reading

The Many Aspects of Integrated Marketing

To be effective (i.e., instrumental to sales), marketing must be integrated in several ways:

1. Consistency of messaging across different marketing vehicles and communications channels. So that you do not confuse your customers and prospects, the look, feel and messaging of your print advertising needs to be consistent with that of your website, exhibit displays at events, (as well as the venues themselves), direct mail, online advertising, social media and public relations activities. This helps to solidify and extend your brand.

2. Consistency of messaging over time. Instead of chasing “the opportunity de jour” with messaging that appears random to your constituents, you need to have a long-term strategy and the patience to stick with it for an enduring period of time. After all, repetition is the key to brand-building. Yes, mid-course corrections are sometimes needed as you continue to learn from the marketplace. While specific words and positioning can always change, overall themes must be preserved until you are ready for a major re-branding initiative.

3. Continuity of marketing processes from setting objectives > market research > product/service strategy > product/service development > communications strategy > communications tactics > analysis of results, with a feedback loop to ensure that past learnings improve future performance.

4. Integration of marketing with other corporate functions. Think of marketing as efforts to predispose prospects to say yes to your sales people, who are needed to close the deal. If the marketing message is inconsistent with what the salespeople are saying, you will confuse prospects and diminish sales. Every part of the company that touches the customer must be in tune with the marketing messages, including receptionists and customer service representatives. Each touch point with the customer either reinforces or diminishes your brand.

Future posts on this blog will provide more detail and illustrative examples of each aspect Integrated Marketing.