For those that haven’t read the book Moneyball, it’s a great read for sports enthusiasts and business professionals alike. It has also been remade into a recent Hollywood movie. The central premise of Moneyball is that the collective wisdom of baseball insiders (including players, managers, coaches, scouts, and the front office) over the past century is subjective and often flawed. Statistics such as stolen bases, runs batted in, and batting average, typically used to gauge players, are relics of an ancient view of the game and the statistics that were available at the time. The book argues that the Oakland A's' front office took advantage of more empirical gauges of player performance to field a team that could compete successfully against richer competitors in Major League Baseball.

The same can be said in the business world, especially in marketing organizations. Countless marketing dollars have been spent and wasted on mass marketing campaigns that don’t hit the mark, and focus on metrics that don't matter. This “spray and pray” approach to marketing focuses on products and tries to hammer offers to as many customers as possible until something sticks. The offers are rarely personalized, and are understandably focused on what the business needs to achieve (i.e. push this product line). Well, we all know this isn’t working for customers, and certainly is not profitable for businesses. For example, I may have purchased from L.L.Bean once or twice in the past year, but what kind of intelligence has been applied to the marketing campaigns that identities me as someone they should email every day, and send two mail catalogues to each week? They go straight into the trash without even being viewed, what a waste. Sorry, customers don’t have the time for something that’s not immediately relevant. Not only does this have a damaging impact on the customer experience and on costs, but I‘m pretty sure they are impacting the environment by killing a few million trees along the way.

By using rigorous statistical analysis, and sabermetrics, Billy Beane, the illustrious GM of the Oakland A’s, was able to identify the hidden patterns that mattered, and find players that were well under the radar of other teams and cost effectively win baseball games. This team of statistical anomalies and has-beens lead them to an American League record 20 game winning streak that catapulted them from the bottom of the pennant race to nearly winning the division in 2002.

In the business and marketing world, this approach is called Next-Best-Action Marketing. N-B-A Marketing (and no this is not referring to basketball), is a customer-centric approach that allows you to model customer behavior, and determine what the most important things are to your customer (like channel, treatment, offer, timing, etc.) and balance that with the needs of your business (retention,  growth, service, risk, etc.). Next-Best-Action marketing uses decision management capabilities like predictive and adaptive analytics to constantly “listen” and “learn” from customer interactions (positive or negative experiences, activity, purchase history, etc.), and then determine the right time to engage, with the right offer, and in the right channel. This is then presented in real-time, at the moment of truth with the customer, whether in outbound channels like email or SMS, or inbound channels like the Web, social media, and contact center.

Next-Best-Action Marketing has helped some of the world’s most sophisticated companies with very complex customers to optimize customer lifetime value, empower their marketing organizations, and create relevant experiences for every customer.

Check out the latest Pega eBook: Next-Best-Action Marketing for more details on this shift, and if you want to live a day in the life of a marketer’s version of Billy Beane, check out Bob’s Customer Journey, a fun video that brings the concept of N-B-A Marketing to life.