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If you’re in the loyalty space, you’ve probably heard something about empathy lately—perhaps from a programmer who is working towards “empathetic design” or a marketer who is seeking to cultivate “brand empathy.” Similar to “emotional loyalty,” the term “empathy,” as it applies to today’s loyalty industry, is sometimes used in ways that aren’t that clear. However, that doesn’t mean the term can’t be used strategically.
In fact, empathy, taken seriously, presents a tremendous opportunity for loyalty marketers seeking to create customer retention by better listening to and responding to consumers. One provider, Pegasystems, is readying the launch of a new product, Pega Customer Empathy Advisor, an AI-powered solution that will enable brands to interact with consumers empathetically, to yield data and provide measurable results.
In a keynote speech at PegaWorld 2019, Rob Walker, Vice President, Decisioning & Analytics, Pegasystems, discussed how intelligent software like the Customer Empathy Advisor can be used to empower empathy in a brand’s engagement program. He also demonstrated how an organizational commitment to evolution and ethical behavior could achieve excellent results through an AI-driven engagement model.
To learn more about such ideas and the Customer Empathy Advisor specifically, as well as the rationale behind the product’s design, Loyalty360 recently spoke with Vince Jeffs, Senior Director of Strategy and Product Marketing at Pegasystems.
“The focus of the effort that we’re putting around this is all about relevance and value for customers,” Jeffs said. “And, I would say that’s contextual.” Brands, in Jeff’s view, need to ask themselves if what they’re presenting to customers (e.g., marketing materials, offers, etc.) is truly applicable to them. A lack of relevance reveals a lack of empathy.
He noted Pega’s position is that empathy has two constituent parts. The first is listening to customers and understanding their current need or current problem. This aspect is essential, as it shows that the brand is sensitive to the customer and his or her needs. However, Jeffs did say, “This isn’t where the value is created.” Rather, value is created through the second aspect of empathy: addressing the customer’s problem or need.
A Pegasystems product currently on the market, Pega Next Best Action, provides brands with this two-pronged approach to empathy, as it uses customer data and feedback to inform brands what the best move in a given situation is, whether that move involves addressing a problem materially or just lending a consumer a listening ear.
Customer Empathy Advisor will take things one step further. Jeffs said, “It highlights if you’re biasing the system, which many organizations do. Even if they have this Next Best Action approach, very often, they’ll still bias the interactions with what we sometimes call ‘levers’ or changes in the strategy that are architected to give one line of business a little edge for some period of time.”
He continued, “For example, a bank may want to offer more credit cards instead of mortgages. Suddenly, the bank has introduced some bias, some business reason why they think they should up the importance of something, while actually going in conflict with the AI.” That is, the AI is learning from the bank’s customers, but with each lever, the bank is becoming less empathetic. Customer Empathy Advisor detects when brands are sacrificing empathy and becoming less customer-centric and more business-centric.
As such, the new product will benefit brands differently, depending on the challenges that they’re facing. The bank mentioned in Jeff’s example would be made aware that its focus on credit cards ignored what consumers really wanted. Once aware of this, the bank would have a chance to change course.
On the other hand, a brand that offers only one product may find that their necessary bias of that single product is creating a rift between the brand and its consumers. Customer Empathy Advisor will not make strategic suggestions in that case. Instead, its tactical, quantified feedback will point to holes in the brand’s strategy that must be addressed to get the most value from consumers. In this role, Customer Empathy Advisor can serve brands by providing insight for decisions concerning annual budgets.
Though the product has not yet been released, some of Pegasystems’ clients are already using a simulation to test how the product could work for them in model scenarios. Through the simulation, these clients are able to look at various offers and their value, and then tweak tactics accordingly. The brand can then identify what Jeffs refers to as “missed moments,” which may happen when the AI is overridden and levers are introduced. The simulation can then show what would have happened had the company acted differently, and this result is quantified, showing the value of the alternative action.
Jeffs discussed how AI functions in informing brand strategy. He said, “If you’re reaching optimality, then you’re confronted with the law of diminishing returns. At that point, you have to innovate to either grow customer-value or grow the market. Essentially, you have to identify areas of opportunity within the existing market or add a new market. When you do that, you can look back and learn how you reached optimal level more efficiently or faster.”
He continued, “Our AI shows us that’s a problem customers have, too. There’s this idea of exploration vs. exploitation. AI models have to explore things to get up to speed before they can be confident that they’re making the right recommendations, but there’s a lot of research now going into ways to speed that up, so that brands can exploit faster.”
Overall, it seems that one of the key functions of Pegasystems’ new product is its ability to put data into four quadrants, each corresponding to the value a particular customer segment brings to the brand. This capability will enable brands to identify weaknesses that they should consider dropping. Undoubtedly, this should serve Pegasystems’ clients extremely well as they attempt to drive loyalty.
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