New rules of customer engagement: The game of personalization
By : Siddhartha Basu
AGM- Analytics & Consulting
Digital engagement is the talk of the town. Remarketing, online-to-offline and offline-to-online engagement, switching, and omni-channel engagement paradigms are here to stay. With the increasing adoption of digital channels by customers and enterprises, they have now become an integral part of customer engagement models.
How is Customer Value Management adapting to the digital world? After all, Customer Value Management (CVM) in its traditional sense is engaging customers with the right offer and the right time over the right channel, i.e. contextual engagement.
To delve deeper into the dynamics of CVM, omni-channel engagement, and traditional Next Best Action / Next Best Offer (NBA / NBO) models, we need to understand the primary parameters of a targeted engagement model, i.e. where engagement dynamics are informed by a specific goal (in the case of CVM, the goal is Customer Lifetime Value or CLTV).
Engagement model constraints
The three dimensions, which act as constraints in any targeted engagement model, are:
Revenue / other organizational goals:
This is the primary constraint in engagement. No engagement model can completely ignore its primary aim, i.e. – maximizing the value of each customer interaction.
At the same time, an engagement paradigm also needs to consider what the customer wants / needs at any moment of time.
In most engagement paradigms, the resource constraint comes in terms of cost of communication, often called channel costs.
Traditional engagement models
Open Market / ATL Communications have resource as their primary constraint, as these are costly. In such expensive channels, the focus lies more on maximizing revenue rather than meeting customer needs. Additionally, it is difficult to adequately meet customer needs without a segmented communication channel.
In traditional CVM models of engagement, the resource cost constraints could be mitigated using telecom operator’s own channels (traditional channels like USSD / IVR / SMS, etc.). These models try to match revenue / other organizational goals with customer needs. Contextual communication paradigms and triggered programs helped serve the right offer at the right time to the right customer, however, communication channel constraints have a very little impact on the design.
In the traditional Next Best Action / Next Best Offer (NBA / NBO) engagement model, revenue and similar considerations take a backseat, as the primary model is to engage customers at a relatively lower impression level, i.e. ensuring customer needs are met keeping resource utilization at their lowest. Although it cannot entirely be ignored here, revenue is not the biggest priority here.
Losing control: Moving to a digital world
With the engagement moving from legacy to open channels (e.g. email) or traditional digital channels (e.g. own website) or even social media, organizations need to adopt their engagement models to suit this new reality. This shift may further cause organizations to lose their fine-grained control and be at the mercy of the new, smart channels.
Are you using email to communicate? Email programs will suppress delivery notifications so that you don’t get any acknowledgment of who read your missive. Are you using your own website? Real- time engagement takes a backseat and messages are cached. Moving to social networks, customer-level response tracking simply doesn’t work anymore.
In this environment, losing even one of the three dimensions of engagement can be disastrous. Let’s take an example. Enterprise A tries to connect with their customers on Facebook. Simultaneously, there are 15 different enterprises, some of them direct competitors to Enterprise A, vying for the same customer, In this scenario, Facebook shall only show Enterprise A’s communication to the customer if and only if their budget is adequate.
Communication channels are costly and need to be managed intelligently.
If the customer does not like the communication, they do not interact with it. This in turn means that they may not like, share or even click on it. Facebook monitors engagement level for the ad. Low-engagement ads get suppressed by its smart algorithms.
Messages need to stay relevant to the customer.
As Facebook is trying to manage many enterprises competing for the same customer, they can only show an ad a certain number of times to a customer. Call to action in the ad must lead to a long-term impact on revenue or other desirable parameters – there’s no telling when this customer will be reachable again.
Messages must be strategic, not merely tactical.
So how does personalised engagement work in the digital world?
Personalizing the Digital Engagement: AI in Play
Personalization is a much-abused term. It means many things to many people. Here at Flytxt, we believe personalization is the type of communication that is:
- Bespoke, at customer level (the elusive segment of one).
- Engaging, for a particular customer segment and the channel (not all offers work for everyone in every channel).
- Responsible, for incremental impact on core business KPIs for that customer (strategic at a customer level, not merely at an organizational or segment level).
Flytxt’s digital customer engagement framework balances the three dimensions of customer engagement by allowing personalization to work at multiple levels:
- Optimization Engine works by evaluating individual customer’s future potential for every communication strategy and selects the best communication strategy for the customer.
- Product Personalization modifies existing offerings and creates suitable product baskets for individual subscribers.
- Adaptive ranking or prioritization re-ranks a customer’s available offer basket based on behavioural markers and strategic priorities.
These three AI-assisted programs, working together, create an engagement plan at the individual customer level and allows omni-channel communication to be extended to newer and smarter channels.