What is Next Best Action

What is Next Best Action?

Séverine Huille

Written by

Séverine Huille

In the digital and so-called omnichannel era, proposing a customer journey to maximise customer engagement is a challenge for marketers. 

Today, the solution lies in Next Best Action (NBA). The concept is simple: for each interaction with a customer, different ways of responding are evaluated. These ways are the possible next actions. The challenge is to decide, among these, which is the best. 

The concept of NBA derives from an Air Force strategy, developed by a Pentagon advisor in the second half of the 20th century, based on the following question: how can I anticipate my enemy’s move and respond in the best way? Transposed into a context of economic competition where the target is no longer the enemy aircraft but our customer, the NBA is essential for all companies wishing to improve their customers’ journey.  

Let’s start with an example 

Let us put ourselves in the shoes of a customer interfacing with the e-commerce of two clothing companies. As a customer, I am looking for a yellow jacket within my price range. 

I start with the first company. I type my query into the search bar and end up with a very large page of results. I click on the first result, but it doesn’t convince me. I go back, and so I look at a series of products, and every time I’m not convinced I take a step back. At some point, I give up. 

I go to the site of the second company. At first, I find myself doing exactly the same steps as before: search on the bar, and click on the first product that doesn’t convince me. This time, however, the site interacts with me. It suggests: “Does this product not satisfy you? You might want to take a look at these other products” recommending something in the same colour/shape/brand. It seems very likely that my experience with the second company will be longer and will lead me to purchase the ideal jacket from its site.

What is an NBA strategy? 

The difference between the two sites can be summarized as follows: 

  • One proposes to guide the customer through his experience, the other lets the customer guide himself. 
  • One recommends to the customer the best action to take at each step, the other forces the customer to take a step back every time the page opened doesn’t convince him.
  • One offers a unique and exclusive journey to each individual potential customer, the other the same path to all visitors.

To put that simply: one has a Next Best Action strategy, the other does not. 

It does not seem difficult to understand which experience is the most desirable. Company 1 has imagined the experience for a customer who has time to search and is open to other possibilities of products to purchase. In this case, the specificity of each customer is not taken into account. Instead, in Company 2’s website, the customer is “thought about” before the site is developed. 

In summary, having an NBA strategy means asking yourself the following questions: 

  • What happens if the customer clicks on this page?
  • Where can they go if the page does not satisfy them? 
  • What is the primary action we want them to take? 
  • What is the Next Best Action we can propose to them if they are not satisfied? 

Reversing the global marketing strategy 

The NBA strategy doesn’t only apply at the level of defining a company’s website. It concerns any channel that establishes direct contact with customers and is integrated upstream of the definition of actions towards the customer. 

In other words, NBA guides the marketing strategy. Indeed, how can one think of the best customer experience (UX) if the global strategy is product-centric, i.e. driven by the service or product to be sold? Instead, the NBA strategy can be implemented when the global strategy is customer-centric, i.e. driven by what the customer may want and their possible reactions to the proposed UX. 

In the first case, the primary question asked is: “I have a campaign for a certain product or service, what are the possible customers?”. In the second case, the question is: “What do my possible customers need? What can we propose to improve their engagement with us?”. Understanding customers before offering a product or service to them becomes the number one priority. 

Understanding the customer starts with a large data collection

The important thing in data collection is to create a unique 360° view of the customer and to do this a variety of sources is essential. Data can be collected according to three types:

  • First-party data: company-owned, with information on all customer touchpoints 
  • Second-party data: acquired from trusted partners 
  • Third-party data: bought from data providers outside the company (e.g. socio-demographic data, geographic data, etc.) 

Customer journey data are crucial for building a customer identikit. However, the customer journey has been challenged by the so-called omnichannel approach. Indeed, the traditional analysis assumes that the steps followed by the customer to achieve “loyalty” to the company are a linear process. The five traditional stages (awareness, consideration, familiarity, purchase, loyalty) follow one another in a consequential manner. However, this type of funnel is not valid with an NBA strategy because the number of customer contact points has increased exponentially and not all contact points are controllable.

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IA before AI 

In fact, customers don’t care if channel infrastructures are divided into departments. The important thing is to interact fluidly on any channel without losing any element of the other interactions. Channel and customer data is crucial. Therefore, an organized and accessible Information Architecture (IA) at all levels becomes necessary.

Before implementing an NBA strategy, two questions must be asked: 

  1. On what software is the information stored? Examples: Amazon Redshift, SQL Server, Google Cloud… 
  1. How do the departments interact with each other?  

The NBA strategy cannot be implemented without a cross-functional approach between departments, based on integrated data, such as a unified view of data from different sources.

The AI time

As mentioned before, the challenge for the NBA results in a customer approach that is the opposite of “traditional” marketing: the needs and desires of the target audience are identified before launching a campaign. In this sense, data on past customer behaviour makes it possible to build predictions about a possible future. To determine which customers are most likely to be sensitive to a certain message, machine learning comes to help. 

It all starts with needs analysis, thanks to data mining, which is the exploration and analysis of large amounts of already structured data to discover meaningful patterns. Clustering analysis is one of the best-known examples of data mining and is very relevant for NBA strategy. According to their past behaviour, customers in a database can be segmented and thus receive specific promotions. More precisely, an NBA strategy could be based on the profiling of each customer in the database, with the extrapolation of the most interesting information for the data analyst. 

So what does it mean to implement an NBA strategy in a company’s organisation?

Implementing an NBA strategy requires a revolution in the corporate mindset on two points: 

  1. Just as a military strategy requires the observation of the adversary and the anticipation of his moves, the observation of the customer in his interactions with the company is at the basis of all decisions: it is the customers’ actions that decide those of marketing.
  2. How to anticipate where an enemy aircraft will be located if there is no accurate and numerous data on its previous moves? Quality data and multiple sources are the basis of the NBA.  

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