Next-best-action Marketing - Benefits and Drawbacks

Benefits and Drawbacks

Although the new paradigm is elegant, both in its business and technical implications, it faces two challenges. The first complication is that most companies are organized in a product-oriented way. This means that product managers have specific volume or revenue targets. Traditional campaign management is very much aligned with this. The Next Best Action paradigm, although capable of reflecting the same priorities, is normally used for bottom line optimization. Organizationally this means that different lines of business will need to collaborate to define next-best-action strategies, and goals may need to be reset to better reflect the customer-centric nature of the new processes. The second complication is its unpredictability. Although overall it will optimize the bottom line and have other attractive features (like built-in customer centricity), the ‘on the fly’ decision-making makes it harder to know in advance what the results will be. There are implications for supply (chain) management, staff incentive schemes, budgeting, and service level agreements. Next-best-action strategies can be made predictable again by simulating them in advance.