In today’s noisy marketplace, irrelevant offers are frustrating and often undermine customer sentiment. The win comes from consistently standing out from the competition with pre-emptive, competitive, attractive offers that you assign in real-time via omnichannel communications strategies.
Personalization can mean many things, such as inserting the name of the client/ consumer to individualize digital marketing. The question is: is that enough to deliver a pleasant customer experience? The answer is no.
To optimize customer experience (CX), marketers use instead:
- Hyper-personalization that leverages real-time data, historical data, behavioral data, customer data, machine learning, artificial intelligence, and AI-powered analytics to obtain a 360-degree understanding of the customer across all touchpoints.
- Prescriptive analytics that goes beyond describing what happened in the past (descriptive analytics), what caused something to happen (diagnostic analytics), or predicting what is likely to occur in the future (predictive analytics) to prescribe specific actions that cause a desired future outcome.
With hyper-personalization more relevant than ever before, customers want their purchase preferences and changing needs to be known and understood at every interaction.
In the age of COVID-19, businesses try to deliver more with less budget, with the purse strings tightened on most departments — including marketing. That makes hyper-personalized offers essential.
Hyper-Personalization: Win More with Less
Hyper-personalization may seem daunting, but its always worth the investment because every interaction with a consumer can build long-term loyalty and trust.
Doing it right means using customer data and rapidly delivering hyper-personalized, risk-aware offers that match customers’ needs and financial commitments at any given time via a channel that matches the customer’s preference to maximize the response rate on every interaction.
The Complexity of Offer Management Makes It an Optimization Problem
Figure 1: Complexity of Assigning Offers and why Hyper-personalization is Needed
Above is a simple example that consists of:
- Three different offers covering credit limit Increase, auto loan, mortgage.
- Five customers with differing credit risk profiles, demographics, preferences, and abilities to pay.
- Five separate channels, including SMS, post, email, phone calls, and online portals.
There are 759,375 potential combinations (of customer/ prospect-channel-offer) in this simplified example. Imagine how many combinations there would be for a business with hundreds or thousands of customers and more than 30 descriptive offers. Offer assignment would be unmanageable with traditional strategy improvement methods like champion-challenger testing, or would lead to a sub-optimal outcome.
Understanding Customer Preferences and Needs with Marketing Optimization and Prescriptive Analytics
Businesses use prescriptive analytics to identify decisions they need to make to achieve business goals - from driving revenue, maximizing conversion rates, or offering take-ups - all within well-defined constraints. They can also accurately forecast the impact and results of marketing strategies and apply them to business decisions.
Making Every Interaction Hyper-Personalized
Prescriptive analytics, the combination of predictive science, decision rules, and optimization, enables organizations to:
- Create scenarios from a set of pre-specified objectives or constraints.
- Run optimization software to find the best strategy within those constraints and objectives.
- Analyze the impact of the optimal strategy on KPIs and understand any trade-offs.
- Convert the preferred operating scenario for portfolios.
Businesses can identify the Next Best Actions to take by adopting this technology. At the same time, decision optimization technology enables firms to accurately forecast the impact and results of personalized marketing strategies.
Many thanks to my colleague Emna Makni, who co-authored this post.
How Can FICO Help Level Up Your Marketing?
- Explore more about our FICO Marketing Offer Optimization solution software.
- See how we can help you optimize your large-scale multi-channel campaigns FICO® Optimization Solution for Marketing Offer Management
- Contact us today to discuss how FICO Marketing Solutions Suite can help you assign hyper-personalized offers to each client or consumer in real-time to maximize your sales and improve your customer loyalty and experience. Cloud-based or on-premises FICO AI-powered analytics solutions enable you to fully automate your marketing campaign, quickly respond to business requests, continuously improve marketing processes and develop hyper personalized marketing strategies.