While delivering an exceptional customer experience was already a challenge before the pandemic, COVID-19 forced organisations to speed up any digital customer experience and transformation efforts they already had in progress, or even completely reinvent themselves digitally.
As face-to-face communication diminished in the blink of an eye during 2020, says Peter van der Putten, director, decisioning solutions, Pegasystems, many businesses had to meet the challenges of communicating with their customers online. As a result, customer experience has become a top priority for business leaders today.
However, recent research from Pegasystems has found that the current level of customer engagement and marketing that companies provide will become unacceptable to most customers in the next two years. If customer centricity is the way for organisations to get ahead, it clearly needs a shake-up.
Customer experience is breaking down
The research exposed how many businesses are already seeing a significant breakdown in their customer engagement, 43% of respondents have seen a high rate of customer churn, and 44% said that their rate of complaints is high.
The research also found that customers do not want to hear from brands, as 40% of respondents said their communication unsubscribe rate is high, or that customers simply don’t interact with their communications at all (44%). While it is evident that customers want to air their grievances, it’s also clear that their desire to talk with companies to resolve any issues is faltering.
In addition to this, some businesses are also using outdated ways of marketing to customers, as the research also found that more than one in 10 (14%) businesses are using traditional ‘mass marketing’. Because such marketing paints a large audience with one brush, this can only exacerbate the breakdown in customer engagement.
At best, these messages are driven by wishful thinking by the marketers on what will resonate with customers, and at worst, it’s purely a reflection of the ‘product of the month’ a company wants to push. And to make things even worse, these offers are calculated in bulk offline, immediately becoming stale and not taking into account any real-time context that forms part of the customer interaction. Thankfully, a large majority of respondents (63%) say that mass marketing to customers is a thing of the past.
Organisations now understand that they must avoid sales-focused customer engagement and develop a more sustainable, customer-centric, two-way relationship with customers, as they know that poorly timed, one-size-fits-all marketing can drive customers away. For businesses to move forward, they need to connect with their customers emotionally and earn the right to expand each relationship they have. That’s where real-time decisioning comes in.
What is real-time decisioning?
The definition of real-time decisioning differs with each company, especially as they have different approaches and use cases. We can define real-time decisioning as an artificial intelligence (AI)-driven capability that enables a company to analyse an individual’s context ‘in the moment’, by using self-learning predictive models and business logic to select the most relevant action, provide the next best action to that customer in-channel and in the moment, and learn in real time from feedback.
Trustworthy AI principles are key to provide control, fairness, and transparency. This all happens while the customer interaction is actively taking place. When a customer is truly in market, real-time decisioning allows companies to analyse that person’s context and sell during that small window of time. It also allows them to service, nurture, or even retain them when they are not.
The ambiguity surrounding real-time decisioning has resulted in business leaders making investment decisions that might seem smart at the time but will not support their organisation in the long term. Sometimes, the lack of understanding around what real-time decisioning exactly is and how to use it can make companies not adopt it entirely.
The research from Pega found that only 39% of companies are investing in any real-time decisioning capabilities, even though the vast majority (88%) believe that they’re vital to providing a great customer experience. But too many investments get wasted in channel siloed personalisation solutions and segment or audience-based marketing technologies, instead of true one-to-one marketing and technologies such as DMPs, who are quickly losing relevance given the demise of third party cookies.
How real-time decisioning impacts customer experience and value
Simply put, real-time decisioning is the ability to quickly process vast volumes of customer data to determine contextual next best actions. It can be extremely effective and drive significant marketing and engagement performance, whilst putting the customer first and doing what’s right for them, not just for the company.
For a company that would like to standardise its engagement strategies and unify its approach across its various channels, a real-time decision engine is needed, as the technology enables a company to drive all customer conversations a central brain.
They can achieve a scale of both quality and performance that cannot be achieved using a siloed approach, whilst making sure recommendations are empathic, relevant, contextual and trustworthy, across dynamic journeys that evolve across all channels in owned and paid media.
Most people who lack understanding in real-time decisioning are comfortable with the status quo and have little desire to change, as they only recognise the risk in investing in this technology, as opposed to the value.
However, the benefits of real-time decisioning are not just in theory; organisations who have adopted it have seen a return on their investment. Survey respondents that are already using this technology report happier customers (48%), a decrease in churn (42%), and an increase in the acquisition of new customers (42%).
Given the substantial returns, budget was the least of their issues (22%), technology played some role (58%) but the key challenge was ‘people issues’ (78%), which drives home the importance of having a clear customer centric vision and strategy in place to get the most out of such an approach.
As the customer context is constantly changing, the competitive messages are becoming more and more similar with each organisation. While the challenges have increased over the past year, this will only pave the way for forward-thinking and innovative companies.
They will come out on top not just because their customer experience is better than their competitors, but because they can move quickly. The aforementioned information shows that real-time decisioning positions companies in the right place at the right time for their customers.
The author is Peter van der Putten, director, decisioning solutions, Pegasystems.
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