What is next best action?
The “Next Best Action” is a customer-specific approach that envisages various actions that could be implemented for a specific customer and then chooses the best possible option to implement. This is also referred to as “Best Next Action,” “Next Best Activity,” or “Recommended Action.”
Next best action routinely needs automated learning-based decision-making. It utilizes machine learning to enable real-time decision-making to improve sales conversions, right at the point of purchase. Next best action is used to target customers with relevant offers, a specific product, or a service-based proposition, depending on their needs.
The next best action is based on consumer interest and primary business objectives, such as the holiday season. Sales representatives are given sales targets for specific holiday products, which has to be balanced with customer interests and preferences. When done right, the next best action is often the simplest long-term method of engaging with customers--such as customized content and relevant offers through the right channels. Since it is automated and self-optimizing, the next best action constantly improves and requires, minimal if any, intervention, becoming completely consumer-centric.
Where is next best action marketing used?
Any business or brand that directly engages with customers can benefit from implementing next best action strategies that are consistent across departments--from IT, marketing, sales, and management teams. The need for consistency arises because the next best action strategy involves gathering customer data, sorting it, and then implementing results. Here are some uses of next best action marketing:
Gauge brand loyalty
Next best action strategies can be used to encourage brand loyalty, which is determined during the sales process. Brand loyalty gauges if the invested resources are worth the possible revenue of the sale.
Deliver focused messages
A next best action model can determine relevant content and channels for any customer segment, based on buyer personas, industries, and the sales stage. Businesses can trigger customer communication about a specific value proposition automatically at any stage in the sales funnel.
Some organizations utilize multivariate testing to optimize the language in customer call scripts. This means that representatives will say exactly what is relevant to the customer. Almost all marketing plans and dynamic content needs to be tested with predictive analytics for best practices.
Invest in the right sales opportunities
Running sales analytics over pipeline scoring applications can tell a business the chances they have of closing a sale. This model is built on attributes of similar deals that have closed or fallen through. These applications reduce how much time a sales representative spends on deals that may potentially fall through.
Focus on offering specific opportunities
With a recommendation engine, businesses can create offers that are appropriate for a customer, based on specific characteristics. This works best for organizations that have a large catalog of services and product lines.
Leverage specific sales actions
By analyzing insights that come from successful sales drivers and representatives, a company can establish an appropriate sales rhythm for channels. Organizations can maintain this optimal rhythm with gentle and regular reminders to employees.
Preventive measures to reduce churn
With access to dynamic consumer context, sales representatives can act immediately with the right channel at the right time, reducing customer churn and the number of unnecessary service interactions.
Advantage of next best action models
Today’s consumer expects to be treated as an individual, rather than a group member or demographic. Customers expect companies and brands will send relevant messages based on their individualized interests and needs. Traditional marketing approaches that target large groups often do not meet the demand of present-day audiences. With next best action based marketing, brands can target their messaging and customer experiences specific to individuals, creating more effective marketing.
Next best action is a data-based approach where companies use vast volumes of customer data to identify the best marketing pitch or customized sales process. Every customer has a specific pathway to purchase--so when customers feel they are viewed as individuals and their needs are met, they are far more inclined to be loyal to brands and become advocates.
A key benefit is these strategies help brands avoid negative interactions. If the data shows a particular customer often leaves products in their online shopping basket just before making a payment, sending targeted offerings at that time may seem aggressive. Sales representatives may have to look for alternate approaches to ease this customer into the purchase. The idea is to encourage a customer--rather than alienate--with next best actions.
Another notable benefit of next best action strategies is the ability to improve marketing spending. The right messages delivered the right way can make the biggest impact on audiences. This strategy helps a brand ensure that financial efforts are made in the right direction and at potential prospects that are most likely to convert.
Challenges of next best action models
The main challenge with next best action models is that it revolutionizes customer interactions. Traditionally, marketing teams approach the sales process from top-to-bottom: developing the product, planning its promotion, creating a campaign, and hoping the product will attract an audience. With next best action, marketers do this process in reverse. Brands first have to understand the needs of the target customer and then create a personalized marketing approach that convinces the customer to purchase.
Next best action marketing allows organizations to forecast and predict leads, enable conversions, and contribute to the overall bottom line. These approaches also contribute to key metrics like cost-per-acquisition. By identifying warm customer leads, companies can optimally direct their marketing budgets and resources to the customers most likely to purchase.
However, next best action marketing cannot replace inbound marketing. The two concepts are used in tandem for the best results. Inbound marketing approaches provide leads, qualify prospects, and inform consumers about the brand. Next best action is an extra approach that nurtures leads with a personalized path-to-purchase.
The future of next best action
Next best action is a customer-centric technique that picks the best alternative out of many. Leveraging the power of data and analytical insights, it gives the company an edge in understanding customers and placing their needs in context. Next best action is proving to be successful because it breaks through all the clutter of marketing and modernizes an age-old technique of marketing: personalized attention.
Next best action ramps up customer satisfaction and significantly reduces operational costs. Companies with enhanced competitive assets along with a solid marketing strategy can become a competitive digital leader in their industry.
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