Ready for Combat? Applying the OODA Loop to Customer Engagement

With market penetration well over 100%, communications service providers (CSPs) are continually fighting over the same customers. As competition continues to heat up, margins are getting squeezed. For many executives this is a familiar and frustrating outlook. Time after time we see another study showing that ARPU is declining regardless of usage increasing and despite ever-increasing investments in infrastructure.

It used to be much simpler – product marketing would dream up a new and exciting product and then the channels would sell it. In this far less competitive world of yesteryear, a few products would be appropriate for large numbers of customers and those customers would happily pay for their new “widget”. But the market has evolved.

Today CSPs need to make the most of every precious customer interaction, needing to both delight customers and increase profitability in order to maximise customer lifetime value. Balancing these potentially conflicting objectives is not easy, especially in telecoms where products can have a profound impact on customer behaviour that could be different for each customer. Dealing with that was hard enough before, let alone in today’s fast-changing climate. The offer that was right last night may no longer be relevant this morning.

"The offer that was right last night may no longer be relevant this morning."

Today’s telecom market draws many parallels with military combat. In both worlds, an engagement is an exercise in dealing with a rapidly changing environment; making the right decisions in real-time amongst an avalanche of data, and then communicating these decisions to the front line in a way that they can quickly understand and follow. The world’s most advanced militaries have realised that the traditional campaign approach -- its reliance on detailed and rigid plans and top-down micro management -- is not flexible enough to deal with this level of fast-changing chaos. Modern militaries now rely on an approach that allows strategies and tactics to be developed prior to the engagement but leverages these in response to the situation as it exists at any point in time. This approach is the OODA Loop: Observe, Orient, Decide and then Action.

Similarly, applying the OODA Loop theory to business allows CSPs to define strategies up front and then evaluate and select them in real-time. Organizations can leverage this approach to determine the right offer or action and then effectively communicate it to the front line.

Dr. Rob Walker recently discussed how businesses could apply the OODA Loop theory at PegaWORLD, Pega’s annual user conference. He was joined by Suzanne Woolley, head of Customer Base Management for EE, the UK’s largest communications company, who shared how EE has applied this approach to inbound marketing, pointing out how important real-time context was in understanding customers’ needs and how using it has led to phenomenal increases in acceptance rates of products offered to customers. She also stressed how Pega’s solution made this intelligence actionable, how we could “bring it to life for the agent”.

EE has achieved stunning results, a 300% increase in acceptance of offers and a $7 increase in value per transaction all while delivering a 5 point increase in NPS regardless of whether the customer accepts the offer. Watch the session now (EE’s portion begins at approximately 35 mins).