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Next best action is an approach that brings together marketing and customer service by taking the most appropriate action each time there is a customer interaction. This might be a cross-sell, a discount on existing services, no action at all or any number of other actions. The idea is to determine the action for each specific customer that will most benefit the company, to identify the right time for the action and the right channel for it.
Analytics are critical for determining which actions are best. Data mining is typically used to determine the most effective way to segment customers into different groups and many companies are pushing to more and more fine-grained segmentation.
Representing these segmentation models as business rules, often a decision tree allows them to be easily integrated into the core rules-based decision. Predictive analytics that turns uncertainty about the behavior or value or response of customers into probabilities are also widely used.
Using machine learning to develop models that will score the likelihood that a particular customer is a retention risk or that a particular offer will be accepted put the data companies have about the past behavior of their customers to work.
Rules can then be written that take advantage of these predictions and they can even be used in segmentation models – using the retention or churn risk, for instance, as one of the criteria for membership in some customer segments.