Know What Your Customers Want Before They Do
Retailers need to target customers with the right deal at the right time. Here’s how to nail the “next best offer.”
In “Know What Your Customers Want Before They Do,” published in the December 2011 issue of Harvard Business Review, John Lucker, Principal, Deloitte Consulting LLP and Tom Davenport, Senior Advisor to Deloitte Analytics, collaborated with Leandro Dalle Mule of Citibank to provide a framework for crafting “next best offers” that steer consumers to the “right” merchandise or service at the right moment and price.
Shoppers once relied on familiar salespeople to help them find exactly what they wanted – and sometimes to suggest additional items they hadn't even thought of. But today's distracted consumers, bombarded with information and options, often struggle to find products or services that meet their needs. Advances in information technology, data gathering, and analytics are making it possible to deliver something like the personal advice of yesterday's sales staffs.
Using increasingly granular customer data, businesses are starting to create highly customized offers that steer shoppers to the "right" merchandise – at the right moment, at the right price, and in the right channel. But few companies can do this well. In this article, the authors demonstrate how retailers can hone their "next best offer" (NBO) capability by breaking the problem down into four steps: defining objectives; gathering data about your customers, your products, and the purchase context; analyzing and executing; and learning and evolving.
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