Most people who have heard of FICO know that it is a company based in San Jose, California that focuses on credit scoring services. What people don’t know is that it offers comprehensive data analytics and software applications as well. Over the years, as FICO has advanced the company’s analytic capabilities in artificial intelligence and machine learning, this same analytic expertise has been extended to marketers to predict consumers’ needs and wants and utilize a powerful personalization platform to deliver the right offers and messages at the right time.
This powerful real-time personalization platform can enable clients to develop insightful knowledge and predictions from their own customer data with the ability to action immediately on a mass scale. This solution enables companies to remain customer-centric. Recently, Loyalty360 sat down with FICO’s Michael Testa, Retail and Loyalty Vertical Lead, for an in-depth discussion about the company’s services, philosophy, and areas of focus.
Could you describe how you help clients improve personalization efforts?
FICO has over 15 years’ experience building personalization solutions for some of the world’s largest retail and CPG companies including Walmart, Best Buy, Loblaw Companies Limited, and Coca-Cola. Our approach towards personalization has evolved throughout the years grounded on the experience FICO has gained working with the innovative leaders mentioned above. At FICO, our approach focuses on recognizing that companies have customers that buy products versus the traditional approach that companies have products that are sold to customers. So, a customer centric view versus a product centric view. Our personalization platform enables our clients to predict and provide the right product, offer, or message to the right customer at the right time.
At FICO, this is accomplished by leveraging over 25 years of operational AI/ML experience combined with our market-leading software applications to enable a platform that our clients can leverage to analyze millions of transactions against millions of customers, calculate billions of scores, and make business decisions in real-time, to provide seamless personalized outcomes to the customer.
What are the challenges that come with this strategy?
The main challenge in the past has been the ability to access the necessary data and ability of the systems to process the scale and scope of the customer transactions, information and calculate the necessary analytics to provide a timely outcome.  At FICO, we have overcome this challenge with the latest evolution of our personalization platform that enables streaming analytics in real time. 
The FICO platform can now digest real-time transaction information in sub-second timing and produce personalized outcomes in stream. A case in point, when a customer starts a purchase transaction at point of sale, our platform now can review the current items being purchased and decide the next best action (e.g., offers, message, etc.) and provide actions back to the customer during the transaction. This ability also applies for ecommerce transactions.
How does data acquisition affect personalization efforts?
Data acquisition absolutely drives our personalization efforts. It’s the foundation of any good personalization program. Without acquiring and interpreting your own customers’ data (and in a timely matter), you’re only able to make business decisions based on your best guesses. The exciting thing about collecting and analyzing data is that you might come to conclusions that surprise you. Perhaps lowering prices by a few cents on a specific brand in a grocery store suddenly makes your product move twice as fast, for example. There are other opportunities to make personal connections with your customers and even mitigate issues. In the event of a product recall, you can directly contact the customers who purchased affected products.
What types of data should companies try to gather? VoC? Formal or informal surveys?
FICO’s experience in the personalization space has shown that customer behavioral transactional information is an important element for any initiative. This information can be POS, online activity , etc., to enhance the effectiveness of the recommendations and the desired outcome of the initiative.
What’s the difference between segmentation and personalization and why is that difference important?

While both are valuable marketing tools, segmentation and personalization are very different strategies, personalization being the evolution of segmentation strategies. Segmentation is a common practice of grouping customers based on certain like data parameters such as demographics (gender, age, location), behavior (types of products purchased), etc. This is done quite widely and simply; customers are asked for their birthday and their email address and offers, or communications are sent in cohorts. Personalization takes this a few steps further and builds a custom user experience based on individual buying behaviors, in essence a segment of one.  Imagine going shopping at a department store—being able to identify what floor and section to go to in order to find what you’re looking for is like a segmentation marketing offers. Now imagine walking in, being greeted by a personal shopper, and brought specific items in your size that suit your taste—that’s personalization.
What should your clients’ ultimate goals surrounding personalization be?
Ultimately, a personalization strategy serves two business goals. First, it creates a more positive customer experience which impacts loyalty. Loyal customers mean regular business. Second, personalization is just as beneficial for your organization as it is for your customers. The more they shop, the more data you collect. The more data you collect the more you can make informed, fact-based business decisions to stay ahead of the competition. Overall, an investment into a personalization strategy can improve your bottom line significantly over time.
How does personalization affect customer loyalty?
Consumers have so many choices today. It’s harder than ever to earn their business and especially their loyalty. Retailers must go above and beyond to catch and keep their attention. In many personalization programs, there is an element of gamification and reward which is a great tool. If you know how you make your customers feel, and if they can identify a clear benefit to shopping with you over your competitors, you’re more likely to win their loyalty. They should easily be able to answer the question: “what’s in it for me?”
How does personalization affect the customer experience?
Personalization can positively affect the customer experience in many ways; it all depends on the program you put in place. FICO can enable retailers to utilize advanced analytics to predict what a customer wants, and needs are in a specific time period.  With this knowledge, the FICO decision systems can identify the best offer and the best message for that customer. This enables the retailer to provide their customers a highly relevant experience.
How should social media play in to a company’s personalization efforts?
Social media can influence the personalization effort in two ways. First, as a potential source of information to obtain a better understanding of your customer. For example, FICO utilizes text analytics to take the large amount of unformatted data and enable useful insights to be derived to help power the personalization effort. 
Secondly, social media is another form of communication with your customers to enable your personalized message or offer to be in front of your customer in real time, making the engagement faster and more interactive.
If you could ask one question concerning personalization of a competitor, a technology provider, or a customer, what would that question be?
My one question would be in the area of testing, learning, and measurement, which can apply to all three of the groups. At FICO, we believe a successful personalization program is continually testing and learning with a constant measurement effort to build upon success and reduce the less effective activities. The question is do you have the capability to continuously test, learn, and measure the effectiveness of your personalization program to ensure that you are progressing and growing as your customer changes? At FICO, our personalization efforts focus on building an eco-system that enables our clients to continually learn and grow with their ever-changing customer.
Several important ideas emerge from our discussion with Michael Testa. First is the importance of personalization. Testa points out that segmentation and personalization are not the same thing. Segmentation is valuable and can serve as a basis for a company’s personalization efforts, but one-to-one marketing has much higher up-side than does segmentation. Second, to reach the point of one-to-one marketing, data is a necessity. However, given data proliferation, extracting insights at the proper time can be difficult. FICO has solved this problem for brands by offering a streaming analytics platform. Another takeaway is the benefits of social media for personalization efforts. On the one hand, social media platforms provide additional customer data, and on the other, they function as a medium of communication between brands and their customers. Using social media properly is therefore incumbent upon businesses that want to up their personalization game.

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