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Why Context Is Key to Giving Customers the Experiences They Deserve

6 minute read
Matthew Nolan avatar
CX has hit a wall across industries because companies are relying on outdated approaches and technologies to try and solve complex engagement problems.

Organizations are struggling to differentiate themselves in a growing pool of competitors. Traditional approaches to the “Four P's” — products, price point, place dominance, promotion — no longer cut it when it comes to winning and keeping customers. As a result, businesses are turning to customer experience (CX) as a competitive differentiator. And for many brands, it's becoming a unique cornerstone.

But CX has hit a wall across industries because companies are relying on outdated approaches and technologies to try and solve complex engagement problems, generating frustration for consumers and businesses alike. Customers want to engage with brands that not only respond to their needs, but anticipate them, and match the rhythm of their lives. On the other hand businesses have spent billions of dollars on customer experience, but often see little return on investment — they know their existing CX approaches aren’t cutting it. Sixty-three percent of respondents to a recent survey by my firm, Pega, agreed that mass marketing to customers is a thing of the past. The one-size-fits-all approach is no longer relevant, annoying and driving away customers more often than not.

What’s missing when it comes to truly successful CX? The answer lies in a business’s ability to read and react to a customer’s context, and use that insight to take immediate action in ways that are relevant and meet that individual’s evolving needs. Like when a customer’s cable box stops working, so they visit the provider’s website to find a quick fix — but can’t find anything to help because it’s lost in a sea of pages, offers, promotions and a million tons of irrelevant noise. This company didn’t sense the problem and clear a path, which increased their customer's frustration and maybe their likelihood to churn. To provide a truly differentiated experience, businesses have to be able to activate and process real-time information, and immediately pivot to get in front of that kind of problem.

Unlocking Relevant, Contextual CX

These moments of opportunity with customers open and close within seconds, as they’re exposed to a massive number of competitive messages from other companies each day (current studies say 6000 per day). Businesses only get a second — or less — to identify a customer’s needs and react with messages or offers that are actually relevant and helpful. If businesses don’t take context into consideration when engaging a customer, they can’t hope to stay relevant, and in extreme cases, may push that customer into the arms of a competitor.

Businesses can benefit massively when they can “re-decision” a customer. This means constantly reassessing an individual’s needs as an interaction is actively taking place, sometimes 10, 20 or even 50 times within a single experience. That’s where real-time data and decisioning capabilities comes into play. If they can activate real-time data streams and leverage predictive analytics “in the moment” to understand that customer context, they can take immediate action with that customer in-channel, and make that experience much more relevant. That’s what real-time decisioning is all about. And when done right, it not only enhances a business’ ability to enhance the experience, but it can drive improvements in response and conversion performance.

Learning Opportunities

Related Article: Elevate the Customer Experience Through Timing and Context

What Real Real-Time Looks Like in Practice

Relying on data that’s a week, a day or even an hour old is no longer effective, or even practical. Differentiating customer experience requires a framework that can harness and activate data, and make it available for immediate use. These are the four cornerstone capabilities that together can power this kind of real-time decisioning strategy:

  1. Data: True real-time decisioning requires data that unlocks a customer’s context, no matter what channel they’re using to interact with a brand. By integrating behavioral data like web browsing, mobile clicks, digital transactions, offer responses, or agent conversations, companies can uncover valuable context about what an individual is doing, feeling, or intending "right now." That real-time context provides the fuel to make more relevant decisions, and take more impactful action. Stagnation (how quickly data stagnates and loses value), scope (whether the contextual data covers each facet of context) and speed (how quickly a business can assemble relevant data) are critical to contextual decision-making.
  2. Detection: When they’re able to activate real-time data, businesses can use propensity models (often hundreds of them) to score that new information in real-time, and immediately identify opportunities to sell, serve, retain, and nurture individual customers. That’s a crucial building block for real-time decisioning. For example, something as simple as a consumer adding money to a prepaid phone when a lower-cost monthly plan may be more beneficial to that customer becomes an opportunity, where the telecom company can interact with that customer, suggest an alternative, and build customer loyalty. Businesses must be able to look at any piece of incoming data — no matter how simple or complex — and analyze it to identify potential opportunities for engagement.
  3. Decision: Businesses only have a narrow window of opportunity to engage with customers, so they have to be able to read and react almost instantly, which means they have less than 200 milliseconds normally, for interactive digital channels. Activating data and making predictions is only the first part of that process. The business then has to evaluate those predictions (think of prediction as percentages, like 36% likelihood to accept a credit card offer, or 12% likelihood to click through an ad), and pick the best message for that unique customer, on that specific channel. The end result of this kind of decision is called a Next Best Action.
  4. Delivery: Finally, the business has to be able to deliver that Next Best Action back the customer, and collect a response, so they can learn from it. For example, when a customer visits a website and the business has a chance to serve an ad, they call into the real-time decisioning engine for a next best action, and get a Next Best Action recommendation back within about 200 milliseconds, giving them time to find the associated content from the digital asset management (DAM) software, and serve it to the customer in a container on the webpage. Large enterprises perform that same action hundreds of millions of times every single day, across channels like the web, mobile, email, SMS, and contact center, every time they interact with a customer.

It’s imperative for businesses to incorporate real-time decisioning into their customer experience strategies to help ensure their customers feel like they matter to the brands they interact with. In a very noisy market, understanding a customer’s unique context and providing hyper-personalized experiences can keep a brand miles ahead of the competition — and provide hundreds of millions of dollars in incremental customer value, at the same time.

Related Article: Decisioning — The Only Way to Accelerate Analytics to Value

About the author

Matthew Nolan

Matt Nolan is a director of product marketing at Pegasystems. Matt has worked in the MarTech sector for the last 17 years, serving in a variety of senior product management, marketing and analytics roles.

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