PegaWorld iNspire 2024: Personalization to Hyper-Personalization: Navigating the Multi-Channel Journey at Navy Federal Credit Union

Is everyone having a great PegaWorld so far? Yes, I love to hear it. Um, we still got people streaming in, so we're just going to maybe give it one more minute. I'm going to spare you and not tell a joke. Just so you know, you can keep your excitement ready for what's to come. Um, we have a wonderful, exciting session for you right now that, uh, I am so thrilled to present, uh, on personalization hyper personalization with Navy Federal. Um, please welcome to the stage, Suzanne King, AVP of Orchestration and Analytics at Navy Federal and Caitlin Mcmillan, Assistant Manager of Orchestration and Analytics. Thank you. Thank you.

Oh thank you. Thank you for the warm welcome. And, um, good afternoon and welcome to your final breakout session of PegaWorld 2024. Yay! All right, so, um, thank you for the introduction, Tara. So personalization, tailored messaging, um, individualization. These are words that we hear and live every day. But what do they really mean and how do we accomplish them? And then how do we take it to that next step to hyper personalization, where channel orchestration and insights are part of the mix?

So Caitlin and I are here today to talk about our learnings and our journey with Pega Customer Decision Hub over the last three and a half years in which Caitlin has led a team in integrating seven channels. That's right, seven channels with Pega Customer Decision Hub. So first let's take a quick look at the marketing technology landscape. As you can see on this slide, it is not only vast, it's really noisy and it's constantly evolving. So with all these new technologies it's immense. Can you believe that in 2011, there were only 150 martech offerings? By 2023, that was over 11,000. That's more than a 7,000% increase in 12 years. So with this growth in the number of applications the martech stack, our martech stacks can become bloated.

But if you're like if you're like us, your CFO is expecting an ROI. So we have to be judicious in our software selections and purchases. So at Navy Federal, we have fewer than 40 applications in our martech stack. And one of those is Pega Customer Decision Hub, which we implemented in early 2021. So speaking of Navy Federal, who are we? So we are the world's largest credit union. We have over 13 million members. We serve all branches of the military. And that's not just the Navy.

Even though we're Navy, Federal Credit Union. So all branches of the military and also veterans and their families. And our number one priority is our members financial goals. And we consistently year over year earn awards including the Forrester number one for customer experience among banks and credit unions. Money's best bank for military, best bank for credit unions, best bank for um um VA loans. And then Motley Fool's Best bank for veterans. Right. Um, so as Suzanne shared, you know, our members financial goals is our top priority. Our enterprise strategy includes being member centric, which requires an increased relevancy and personalization of our communications.

And in order to achieve that increased relevancy and personalization, an organization really needs to change, and we're no exception there. So a few years ago, we set out three mandatories for success one, a change in thinking, shifting away from that traditional marketing mindset to redefine what success looks like for us, or what it means for us so that it's less about Navy Federal needs and more about the needs of our members. And then three centralized member data and communication decisioning to really create that seamless member experience. So first a change in thinking. We did not set out to just implement a new technology. We really set out to engage our members in their moment of need. And so this really required that change of thinking. The biggest shift in our thinking was moving away from that traditional marketing approach of really being sales oriented with that batch and blast style of first identifying a product offer and then determining which members to blast it to. We started to shift so that we were identifying a member to communicate with, and doing so when they were ready.

In parallel, we also shifted from just having business rules as our means to identify that target audience, to using the power of AI to really identify the members next relevant next best action or most relevant next best action. And then finally, for this big change in thinking, we also needed to shift from having a channel specific approach where you know, the rules and the strategies were for one channel at a time to really being that true omnichannel connected marketing approach where the messages and experience was consistent all the way through. And so these changes, along with some others, really yielded some great business outcomes. But there were some challenges early on that we want to share. So, you know, we had fantastic organizational support and excitement around our implementation of Pega and what it would mean for us because of its promise to help further us down that journey toward member centricity. Um, but in all honesty, there was some hesitation from some of our business unit partners who have grown accustomed to those immediate results. So we would send out an email blast, and they might see that big spike in application that all the business units want versus having those applications sprinkled out over a longer period of time. We anticipated this with the help of Pega, and we identified or we built a multifaceted long term change management strategy. It was quite effective, but there was still some resistance there.

And so we built a head to head test of the batch and blast way of doing things versus this newer, kind of more transformational way of doing things with the NBA. And the results are really compelling. And it really proved that NBA is not just good for the member, but also the business. And so the credit card applications from the NBA approach outperformed Batch and Blast by 23%, and approved applications outperformed batch and Blast by 27%. We also saw a nice increase in our application submission rates, as well as those applications as well as those application approval rates. So win win all around. Now, while we had those compelling results and a lot of other great success stories over the last few years, there can still be pockets of challenges, right? You know, you're always dealing with something new. And so the current challenge is really around needing more transparency as to why one next best action is decision for a member over other next best actions that are available.

And so we embarked on a project with Pega to help address this. And once we have this solved, we really think we're going to turn those skeptics into believers and have that greater, greater level of support that we're looking for. Um, and then as part of this ongoing culture shift, we also needed to redefine success. And we're making great progress there. All right. So thank you, Caitlin. And so when we embarked on this journey to implement Pega and integrate all those channels, we knew we could see very quickly that the traditional way of evaluating marketing campaign success was no longer applicable. We had to redefine success, and part of that was evolving our marketing to incorporate and leverage and use insights about our members versus what we can sell them. So all of our marketing communications focus on how we're solving the member's problem, and that gives us that more holistic view of the member versus that siloed view where those business units are vying for the member's attention.

So here's an example of an insight that we shared with our members. So we identified that many of our members were using out-of-network ATMs for a balance inquiry, and they are paying a fee every time. And that matters because that fee was like $4 or more and that adds up. But they could have been doing that for free on the Navy Federal mobile app, on our online banking site, or through an in-network ATM. So we shared this with our members through both email as well as our member Service representative channel. And the results were quick and amazing. We saw a 79% reduction in the number of members using out-of-network ATMs for balance inquiries. This is great for our members and it's great for us. So in fact, our member service representatives tell us they love sharing insights with our members.

And this is just a couple of quotes from our msrs. They tell us that the Member Insights has become a welcome addition to the conversations they're having with our members. We have hundreds of insights in Pega today that Pega can decision for a member if the likelihood for the member to accept is high. So in addition to that balanced inquiry one, here's just a couple more examples. When a member is close to paying off their auto loan, we offer them an incentive to start saving a part of that monthly payment every month. Or if we're seeing that members are consistently missing their credit card or loan payment date, we recommend that they move that date to be either on their pay day or a day after their payday. And when a member turns 18, we share with them recommendations on how they can build a strong and healthy financial habit. So this new change of thinking has required us to change the way that we think about success and measure success, because now we're looking for that positive member behavior change that requires us to look out over a longer period of time than when we were batching and blasting campaigns. So sharing these insights is possible because we centralize the data.

Even the data that used to just be in the hands of our business units, as well as we centralize the decision for which communication is best for the member. So all of our member insights and data that we have access to today is all funneling into the Pega Customer Decision Hub. It is truly our unified single decisioning engine at Navy Federal. Everything that you see on the left hand side of the slide in orange, those are all channels powered by Pega today with three more in progress IVR, a revamped online banking website and a mobile app. So, you know, in order to be successful with this omnichannel orchestration and centralized decisioning. It's just so key to have the member insights, the member data, and the member experiences all in that same decisioning engine. And once you do, you really get to reap the different benefits. One of the exciting benefits of having this centralized decisioning is that if a member raises their hand, so to speak, in an inbound channel, we can use that information to inform what we say to them or don't say to them in another channel. For example, if I'm a member and I log into one of our channels and I give an insight a thumbs down because it's not relevant to me right at that moment, let's not surface it shortly after in other channels.

That's not a great experience. And so we're able to use those Pega suppression rules to really align them with our business strategies and create that that experience that makes sense. So we have a real life example of how this works today at Navy Federal. And before I go into that journey, let me just introduce you to our fictional member persona. So meet Michelle. She's 28 years old. She's the sister of a marine, and she uses Zelle and cash for most of her day to day expenses. She uses her checking account for monthly bills, and when she established her membership with us, she told us her number one priority was to manage her spend. And when she needs help, she typically calls our contact center or walks into a branch.

So let's walk through a journey that's possible. Today at Navy Federal with the help of this centralized decisioning engine in Pega. So two weeks into Michelle's membership, she calls the contact center to get help setting up direct deposit. Well while there, after the MSR helps her set up direct deposit, he notices an insight in his dashboard about Michelle. In this case, she's a brand new member. Her number one financial goal is to manage her spend, and she hasn't used her debit card yet. So the MSR naturally works into his conversation with Michelle. Information and benefits about the Navy Federal debit card Michelle is grateful for the information. A few weeks go by.

Michelle still hasn't used her debit card yet, but she has set up direct deposit, so she logs into online banking to confirm that her paycheck has been deposited. While there, she sees an insight about doing more with her debit card. She clicks on it to read more. Now, what do you think happens with that insight? It gets paused. In this case, for 20 days because she's engaged with it. So let's see what happens next. Well, she still hasn't used her debit card 21 days later, so she receives an email about the mobile wallet and zero liability features of her debit card. A few days later, she starts to use her debit card, which is a great tool for managing her spend.

So this is an insight success story. All right, let's see what's next for Michelle. Michelle is using her debit card so much that she loses it, but she remembers when talking to that contact center MSR. She can get that debit card reissued at a branch. So while at the branch, the MSR, after he helps her with that new debit card, notices an insight that he can share with Michelle. And this insight is informed about information about Michelle. Specifically, she has an everyday checking account and is likely to incur ATM fees for the MSR, just naturally works into the conversation and asks Michelle if she's paying a lot in ATM fees, and she says that she is. So the MSR offers to move her to a new checking account where she can get $10 ATM fee rebates every month, which she is now eligible for because she has direct deposit. Is Michelle happy?

Yes. She's delighted. So she asks the MSR to move her into that new checking account type where she's now getting the $10 ATM fee rebates. Another insight success story. All right, so what did we accomplish in this journey? Well, first we made real time decisions at the point of contact, whether that was Michelle calling into the contact center, logging into online banking, or walking into a branch. The next best action for Michelle was recalculated based on her activity and information about her. In this case, when she started to use her debit card, those communications stopped because they were no longer relevant to her. And speaking about relevance, we retain that relevance across all those channels.

All those channels knew she was a new member. She hadn't used her debit card yet and she wanted to manage her spend, and that was her primary goal. And lastly, we helped our member service representatives identify two insights that they could share with Michelle, whether that was the debit card benefits or how to avoid ATM fees. So in summary, our journey from skepticism to success and using always on and adaptive model powered next best actions look like this. So first We are changing that thinking from that batch and blast to now that real time decisioning. And we're doing that through a series of change management strategies and tactics, as well as that head to head test. And we're working with Pega now to increase transparency into what was decision and for whom and why. We've also redefined success so that now we focus more about how well we're solving the member's problem and less on how many widgets we're selling. And lastly, while a multiyear effort and certainly not easy, we are centralizing our data and we're funneling all insights about members into Pega as our centralized decisioning engine.

And we're also powering more channels. So we've got three more channels that we're set to integrate, All of which are inbound to power the outbound, as well as to inform that omnichannel and holistic voice to our to our member. So thanks for the opportunity to share our journey with Pega Customer Decision Hub over the last three and a half years. We'd love to answer any questions you might have. Me first. I'll go since his isn't on. Um, Suzanne, you guys have a great program for so many reasons. But one thing I was impressed with is that you, um, did a martech stack utilization audit before you started this program. Can you tell us why that was important to you and sort of what that led to down the road?

Absolutely. Great question. So we did we engaged Forrester to come out and assess our current martech stack, as well as to advise us on what our future martech stack should look like. And they gave us kind of this multi-year journey, um, as well as help identify those different solution providers that we should be exploring as part of our solution set and our go forward martech stack. And I will tell you also, organizationally, not just within marketing, but across all of Navy Federal, we embarked upon an application rationalization where we looked at where is that duplication of functionality across software applications, and we deprecated multiple applications as a result, and then consolidated all of that functionality into core platforms. Awesome question. My life. All right. Good.

All right. So I was really I was really intrigued when you put direct mail up on the screen. Right. Because I think my question is this. When I think about a traditional direct mail program, what we've usually done is we've used some sort of system to identify an audience, to basically, um, to roll it up and do segmentation, whatever. However you're going to do that and then send it out to a mail shop on a schedule, usually a big run, right? Like it might be a million. It might be a, you know, a million. It could be half a million.

It could be, you know, a thousand. How do you do that? From an always on perspective, I was just curious about like, how do you make direct mail work in an always on. So I'm sorry to disappoint. So it is the traditional way of of direct mail, which is it is a more batch and blast approach. Yeah. Because I think that the, the economics aren't really there yet where you can just have an API to your direct mail vendor. I didn't know if you were doing print on demand or something along because that sounded real, right? The print on demand.

Once I think the economics are there, then that becomes a more realistic solution for 2060. That would be fantastic. I agree with you. The second question I had was the same thing for paid media. Like, how are you actually doing paid media right now? Because that's a that's always one that's really interesting to hear people talk about in this type of environment. Yeah. So the majority of our paid media to date is going through a batch and blast solution. But this year we did launch paid media NBA as a capability.

So we have one live in production today with plans to add more fast follows. Um, you know, and really just kind of see what we can do with it. Um, so, you know, more use cases to go there, you know, kind of more exploration. Um, so far it's been really successful. I will say, though, even with some of those channels kind of off to the side that are a bit more batch and blast, the good news about doing it out of CDH is we still have visibility into how members are being pulled into those segments, what they're receiving, and kind of that full channel experience. Totally. Are you mostly integrated on the paid side? Is that integration with the walled gardens? Is that like the Facebook, Google OK.

Facebook and Instagram at this point, just the meta properties. That's exactly what I was looking for. Thank you. This was a great presentation by the way. So thank you. And the other thing I'll add is that early results are starting to flow in from the NBA for paid media, and we're seeing a phenomenal improvement in cost per application as a result. Hi I'm Mike from Digital Federal Credit Union. Great presentation really applies to a lot to what we're looking to do. I was wondering how the staff was took to the training on the insights and um, how did you got how you got the branch staff, the call center staff, all of them, to kind of buy into wanting to do that with their goals.

Was there any type of tracking? You're welcome to take the first step. Okay. I'll take the first step. Um, love the question. So contact center and branch MSR, um, are a very special group. They are our front line. They're award winning. And this is all about bringing value to the conversation that they're having with the members, but not increasing hold time or call time.

Rather for the contact center, MSR in particular. Right. We had to be very judicious in terms of what we offer to them in terms of insights to share branch Msrs have a little bit more latitude and a little bit more free time. Um, so as a result, we needed to engage very closely with our peers on contact center and branch to make sure that what we were going to be presenting to the Msrs was, in fact, going to be a valuable, um, conversation that they could have with the member. And I think as part of that, right? Because they had not only skin in the game, but they had ownership of really what was going into the Pega decisioning engine. And then in addition to that, there was a lot of the feedback loop, right where they would share with us how it was going. And the Msrs were having a hard time speaking to a particular insight, or if they were loving a certain insight. And so they also felt very much empowered to say that one's not working.

And we'd say, you want to turn it off. And they'd say, yes. Right. So we were very open to that. We didn't push it. And in fact, quite frankly, we felt that having that human channel was invaluable because they are the closest to our members of anyone. And so if anybody knows what's going to resonate with a member, it's our msrs. Mhm. And we also worked very closely with them and all the change management plans, you know really providing them helping or I guess, partnering with them on videos and materials so that they knew how to take back these changes to their group in a language that they understood so that they could get support from their msrs, and then also build out the appropriate training materials.

Great. Thank you. Hi. Uh, rusty from Forrester. So appreciate the shout outs and, uh, great presentation. Um, since you're focused so much on the customer needs and the customer outcomes, which which I love to see, of course. Um, how are you, uh, measuring the impact of that and then aligning it with business metrics? I'm thinking, are you looking at how that factors into better retention and potential revenue down the road to impact CLV as forward looking profit contribution? I'd love to know how you're aligning all that work you do for the customers with how it delivers eventual longer term value to the organization?

Sure. Yeah. So I will definitely say that the individual like inside or action level, we're definitely looking for that positive member behavior change first and foremost. And then we actually do a customer satisfaction survey every couple of months. So we absolutely watch that like a hawk to make sure that we're not seeing any sort of massive changes in that particular metric that we watch. Um, all that being said, even though we're focused on the member experience, that doesn't mean that we can ignore the true business metrics. The cash register still has to be wrong, right? So we're still absolutely looking at applications and bookings. And what we mean by bookings is that these are approved applications for a lending product.

For example, we're looking at, um, how much we're driving in terms of additional deposits and savings products. So we're still very much looking at those business KPIs. Um, in addition to balancing that with the customer satisfaction. Now, I will say that from a CLV perspective, we aren't there yet. Um, but that's certainly a goal to eventually get there. So I have a question. I have a question somewhat related, I think, to one of the previous ones. Um, when I look at some of the offers that you, you put here, um, particularly, for example, the one around, um, uh, avoiding the ATM fee for, for a balance check. Um, I think for a lot of folks, we would think of that almost as a service offer.

Right? Um, but then we're talking about marketing and martech, and so can you talk a little bit about, um, how you thought about the world of what you needed to incorporate and how you work across the spectrum of the parts of your business that can actually influence how a customer feels about your brand. Yeah. I mean, I think, um, starting with Pega taxonomy and their best practices was so key for us, you know, really understanding that it can be, you know, everything from acquiring the member to retention, nurture loyalty and grow, you know, getting those additional products. Um, and so I think the way we look at it is, you know, there are some that were a bit heavier in than others, such as nurture. That's a really big focus area of ours. But really our goal is to have a full scale of options across that taxonomy portfolio so that there's always an opportunity within the CDH, um, you know, to engage with the member at a time of need. And so I think just kind of thinking about it in those categories has really helped us and it is part of our reporting, you know, are we are we too high on grow? Do we have an opportunity over here?

And Pega also offers some tools to kind of see what your gaps might be or what opportunities you're leaving on the table. And I'll add to that, I think one of the very exciting things about bringing Contact Center Branch, we have a financial health portal and some other things that we've integrated with is that it's actually I think you mentioned it in your question, which is really kind of the tentacles of marketing are now in much has a much broader reach. And as a result, the richness that we can bring back to the member is really there, um, versus really just being kind of segregated over here to digital media or email. Right. And direct mail. Um, so, you know, I really I, I think Pega really kind of thinking helping us think through from a taxonomic perspective. And those opportunities for that greater breadth, um, of and really expanding our sphere of influence, if you will. Thanks. Hi, I'm Vince with Pega.

I guess a couple of Pega people have been peppering you with questions, but I'm going to go with one more. Um, so thanks for sharing your story. Uh, it's great. And one thing I'm interested in is if you could just, like, give us a couple of things, like tips, uh, on what was how were you able to convince your organization to so quickly pivot? Was it already in the culture, this customer centricity, or was it something that you did or you sold the organization on? Because most organizations have a hard time not letting the product teams battle for customer attention and, you know, sort of conflict the customer with lots of different messages that are, you know, not always helpful. So I will tell you that I think organizationally from the from the top, we're very fortunate as an organization that member centricity is of utmost importance. And in fact, when we embarked on our journey with Pega, when we really started the project four years ago, um, we had just presented our enterprise goals to the organization. When I say we, I mean the larger we at Navy Federal our senior executives.

And it was three pronged, and one of those was we would increase our member centricity. We would be more scalable and flexible. Right. So, you know, Pega right out of the gate was immediately like seen as a great enabler for both of those enterprise strategies. So it was really pretty easy to sell it, if you will. And then I think the proof is in the pudding a little bit. And so with our first MVP, it's a set of use cases or actions that are kind of meaningful to the company. You know like we had an onboarding one in there. We had a couple acquisitions.

Um, and I think it was key to start with adaptive modeling from the beginning instead of layering it on later so that you're just kind of doing one swoop of change and just kind of proving that out as you go while you're adding additional capabilities and channels. All right. Great questions. Thank you so much everybody. Oh did you have one. Okay. Um, specifically to the MSR channel that you mentioned, there was this little extra, uh, human in the loop. And then the context happens in the real time when the conversation happens, how do you measure the success of the next best action? Sure.

So from an MSR Our perspective, the engagement metric that we're looking at there is how the member responded to that conversation. And so the MSR enter a disposition, which then comes back to Pega and then helps. That informs our adaptive models as a positive or negative result. And so that's how we get that immediate engagement information. But then to Suzanne's point, we're still measuring the business outcomes or the member outcomes. So you know seeing even though they told the MSR that they're interested or like, yes, I'm going to go set up my direct deposit. Did they actually do it, you know, x amount of days after that interaction. Does that help or were you looking for something else? Okay, good.

The other thing I'll just very quickly share because it comes back to your question. And that is um, we are also tracking Post-call satisfaction. And interestingly enough, whenever an insight is shared by a contact center MSR Her the I mean, you would expect it, right? That the satisfaction of the member is higher, even though the call took takes a little bit longer. But what I found fascinating is that the member satisfaction is higher. Even if the member declined the insight, they just appreciated the fact that we Navy Federal were thinking about them. So, you know, to me that was for me a big insight, right? That was an aha that we hit on something that is very meaningful to our members. Hello.

Probably a final question I see, how do you manage conflicts? Because you said that on one side you still have the business lines that have their goals like deposits, landing and so on. On the other there is this customer centricity. So I expect there might be a situation when somebody wants to sell more loans this time than doing more other types of actions. So do you follow 100% the models or you have some layer where you have, uh, discussion forum on that or how do you approach this topic? Great question. Um, I will tell you that we we had a predecessor to Pega CDH that was also real time interaction manager. And I think we were fortunate in that we had that predecessor, because what the team did is they put the thumb on the scale, right. They said, okay, put a two times multiplier on the lending action, and the MSR, you know, would see this pop up.

And they're supposed to talk to a member about a credit card offer. At the same time, they look and see that that member is negative in their checking account. It made zero sense. And they lost all faith in that system, right? That application. And so we were able to say, we've learned from that. We're not going to put our thumb on the scale. We're not using levers. We're letting propensity.

We are 100% member centric. And to date, it has served us well. Suzanne. Hi, Selim. Abd-elsayed. Um, great use cases, I love them. I wonder how did you come up with them and what in what kind of inspiration do you give to the rest of the team to come up with those kind of use cases? Well, I think we're fortunate as well, in that the whole member centric focus is across the entire organization. So as a result, organizationally, we are set up to be constantly ideating.

So it's not just marketing, it's not just digital. It's not just it. I mean, it's not just the contact center. It's not just the branches. Everybody is incentivized and not monetarily, but incentivized because we're all driven to make the member experience better. So there are things like they'll have, um, they will have contests, right. Um, for, you know, come up with new insight ideas. But by and large, these are just either our business units, marketing, digital contact center branch. I mean, anybody in the organization can fill out a quick form and say, I have an idea.

And then we have a cross-functional team that meets every week and you know it. We go through those insight ideas. We pick the ones that we can actually enable because with the data that we have, and then we go through a series of refinement sessions and, you know, we go through the marketing process, where we determine how we're going to use that insight and how we're going to communicate it to the member. And that's in the form of a of a campaign strategy or an Next Best Action strategy. And then we build it, test it, launch it, and then we analyze how it performs. And we communicate out very broadly how that insight performed. And I think that's also helping to kind of propel this initiative, because they're actually seeing, again, organizationally, and we're talking senior executives wanting to see the results of these insights. Um, and senior executives want every quarter, right, for us to come and report on how we're doing and how the velocity of them and how we can increase the velocity of them. So it's just a big focus organizationally.

And again, it starts from the top. Hello. So one question for you guys. I know you've done a lot to get um, your teams who are not marketing to adopt and embrace what you're doing. Can you tell, um, outside of call center, your other business units, right? Your data and analytics and all that? Could you share with our group a little bit about how you got the rest of the organization to get behind what you were doing with NBA? Okay, I'll take that one. So I think part of it is it's momentum.

I mean, it's just like, get on the train because we're going, um, at some point, you know, it's just this is this is how we're rolling here as an organization. Um, and I think the other aspect of it is that all that interaction history from Pega, it goes right back into the cloud. And this is it's democratized. Anybody in the organization can dip into that interaction history and use it however they want to. Um, and so we've been able to, Do you know? Share that as well as the results from all of these different next best actions. Again, all of those all of that data sitting in the cloud for people to use for their next kind of idea. Um, and I think that's the other piece of it too, is that now that that data is democratized, everybody kind of feels like they own it. Um, and I think the last piece of this, too, is that this is not just a marketing led initiative.

This is digital. This is it. This is the business units like everybody, you know, the contact center, the branches we all share in the success of this. And as a result, we all kind of together, collectively want to make it better. All right. I think we're good. Thanks everybody. Great questions.