At the core of it, a next best action approach utilises your finance brands customer analytics to understand what your consumer will most likely purchase or engage with at the time. A customer-centric, next best action approach recognises a variety of different actions your customer may take and offers the best one at the time. This creates a tailored marketing approach that can improve customer conversions as you’re offering exactly what the consumer wants at the time. Rather than focusing on what you want your finance brand to sell you instead consider what your customer wants to buy. This shift in perspective can improve customer relationships as it targets what they want, when they want it.
Next best action: a simple solution
Next best action is a customer-centric approach to marketing rather than a product-centric one. Instead of your finance brand spending on large outbound campaigns for single products you instead focus on tailoring product offerings to the individual consumer. Through analysing customer analytics you can understand your target audience’s wants and needs and make informed marketing decisions.
Through this customer analysis, your finance brand can identify quick win areas to develop stronger customer relationships and create a positive brand image. A study by Deloitte, in which they empowered a UK retail bank with a next best action approach, saw a 30% uplift during the pilot.
How to enable a next best action approach
To embed a next best action approach into your financial services you need to create a machine learning algorithm that can analyse and learn consumers’ habits and behaviours. This should be based on key customer analytics such as:
- Current and previous purchases and subscriptions
- History of transactions and finances
- Demographics such as age, gender, income
- What their preferences are for working with your finance brand (i.e. online banking, in-store purchasing etc…)
- Data on their clicks – pages they’ve visited, information they’ve searched for and how long they’ve stayed on your website and individual pages.
Once this information has been collated and analysed your finance brand can then create an algorithm tailored for each consumer. Your finance brand will need to have certain technology to help with this process. While your finance brand should already have the data you will need to consider creating or contracting a next best action machine learning platform, like DataRobot or Adobe Sensei. If you decide to create one internally you will need to first:
- Remove channel-based silos across your marketing team and organisation
- Merge your analytics to create a 360-degree scope of your customers
- Implement a personalisation strategy across your marketing content
“ A UK retail bank saw a 30% uplift after implementing a next best action marketing strategy. ”
There are two main methods of creating a next best action algorithm:
- Memory-based – This method focuses on machine learning and remembering the similarities and differences between the clicks, subscriptions and products bought to recognise what to offer to other consumers.
- Model-based – This method utilises a machine to predict the probability of a consumer purchasing the different products on offer.
At the core of it, these models are deciding what offers and products should be marketed to which customers based on financial value, the probability they will purchase the product, and the value to your finance brand. Next best action marketing is therefore based on how much value it provides both your finance brand and your customers.
To maximise your next best action marketing strategy you must facilitate an always-on content program. This is so you can target your audience when it’s relevant to them through both inbound and outbound marketing. Because your finance brand understands consumers’ actions and decisions better, they can tailor the customer experience across every marketing channel.
Optimise the customer journey
By switching from a product-centric approach to a customer-centric approach your finance brand can improve and optimise the customer experience. Recgonising the right and wrong times to market and offer products to consumers can generate greater customer conversions and improve customer relationships.
At the core of it, next best action empowers finance brands by enabling them to offer greater customer service, cross-sell and up-sell their products, and offer a highly personalised customer experience which consumers are craving. Next best action is a way for finance brands to develop best practices that can improve customer retention and generate a positive brand image by giving consumers what they want, when they want.