1:1 Customer Engagement

Maximizing customer value with real-time

next-best-action decisioning

April 2023 | Nihar Joshi

© 2022 Pegasystems Inc. CONFIDENTIAL

Hi. We’re Pegasystems. But you can call us Pega.
We deliver innovative software that crushes business complexity.

What sets A proven return Trusted by the

us apart? on investment world’s leading brands

Intelligent technology 1:1 CUSTOMER ENGAGEMENT 9 of the top 10

We build the Pega Infinity™ 489% ROI / $150M Revenue Up telecommunications
portfolio of software on our companies
low-code, cloud-native platform. < 6 months payback

Scalable architecture CUSTOMER SERVICE

10 of the top 10
Pega’s Center-out™ approach
healthcare payers
298% ROI
helps you transcend channels
and internal data silos for quick < 6 months payback 7 of the top 10
wins and long-term transformation.
insurance companies
Rapid Innovation INTELLIGENT AUTOMATION

With Pega Express™ design thinking 186% – 598% ROI 18 of the top 25
best practices, you can design and
< 3 – 12 months payback global banks
deploy critical applications faster.

PEGA (NASDAQ) . Present Globally . 6000+ employees, 250+ Partners

Key 3-year benefits. Forrester Total Economic Impact™ studies 2020. https://www.pega.com/forrester-
tei
2
 The world’s leading financial service organizations
are using Pega to connect workflows and interactions
across the customer lifecycle, like:
Payment Exceptions
Customer Resolve faster, easier across payment

Service disputes and commercial payments

Customer 86% faster

dispute resolution
Engagement Resolve service requests across
channels quickly, more easily

Increase loyalty and wallet share 20% reduction in

Onboarding back-office headcount

& KYC Lending

$150 Million additional
Revenue in Year one
Address compliance more
effectively, simplify customer
experiences
50% improvement
in efficiency
Reduce time and effort
to close
Financial Crime
Manage alerts more efficiently,
90% reduction in holistically across types and systems
loan processing time
75% reduction in time
Bank Operations
required for investigations

Rapidly boost efficiency of various

back-office processes

20% reduction
in client follow
up
Forrester Leader
Real-Time Interaction Management
“Pega excels in nearly every aspect of this evaluation,
distancing itself from other vendors and raising the bar
for enterprise RTIM across the entire customer lifecycle.
References praised Pega’s holistic commitment to
customer-focused outcomes and attributed significant
business results to their Pega solutions.”
Real-Time Interaction Management (RTIM)
Wave Report, Forrester Research

Today's empowered customers demand consistent

and relevant experiences – requiring a sophisticated
decision engine to integrate data, analytics, content,
and channels. It must provide capabilities for:
• Customer Recognition
• Contextual Understanding
• Decision Arbitration
• Offer Orchestration
• Measurement & Optimization
• Integration
Real Time Interaction Management Wave
Pega’s Historical Performance

2015 2017 2019 2020 2022

Leader Leader Overall Overall Overall

Category Category Leader Leader Leader
Best Current 2nd In Current Offering Best Current Offering Best Current Offering Best Current Offering
Offering 3rd in Strategy Best in Strategy Best in Strategy Best in Strategy
Forrester TEI Study
489% Return On Investment

“With an investment in Pega, organizations deliver the

right experiences to customers across channels,
Total Revenue Lift
(per 10 million customers)
resulting in higher acceptance rates & revenue growth. $600,000,000
Pega also provides agents with relevant customer
conversations, improves agent experiences, and $500,000,000
strengthens customer relationships with the brand.”
$400,000,000
Pegasystems commissioned Forrester Research to
conduct a Total Economic Impact™ (TEI) Study $300,000,000
to examine the typical return enterprises realize
from the Pega Customer Decision Hub: $200,000,000

• 489% Return On Investment (ROI)

$100,000,000
• $226M Incremental Revenue (Yearly/10M)
• $193M Retained Revenue (Yearly/10M) $0
• $43 of Incremental Value / Customer / Year Year 1 Year 2 Year 3

Incremental Sales Retention Revenue

The Value Of Real-Time CX
Pega Customer Decision Hub

Top 4 Top 4
US Bank US Telco

6x +12 NPS 265% 4B 30K 40% 3x 85%

Increase Agents using Customer
Response Over nearest Conversations Net Promoter Increase in
revenue per next best save rate
increase competitor per month Score lift offer accepts
contact action
1:1 Unified
24M Next best Retail, call 90-day
Personalization inbound, Owned digital Always-on Real-time
conversations / center, web, go-live
across 25 outbound, channels engagement omnichannel
day mobile call center
Channels mobile
425K
20% Increase Same-day 300+ Next Personalization 14% 40% Increase
Incremental 11 Integrated
balance hardship best actions in for 100M Reduction in revenue
customer channels
retention launch real time customers in churn growth
saves

<100 MS $203M Saved 27% Increase

35% Fewer 250 Models 200% Increase in 8x Increase in £100M+
Response from reduced Incremental in digital
impressions in one week email open rates upgrades
time churn profit cross-sell

10-1 300% 3.5X Increase Improved $225M 2.5M Increase 20% Increase 41%
Return on Increase in web click growth Increase in in yearly net- in net Web-to-CC
investment in conversion through & acquisition net revenue adds promoter conversion
score
Why we succeed.
Where we Win.
Unique Parameters
in CX with Customer
Decision Hub (CDH)

Omni-Channel Connectivity Flexible & Layered

A single customer view plus Architecture
providing contextually relevant
conversation across Digital and Easily replicate architecture
”offline” channels across Product Lines to bring
consistency across business.

Real Time Interaction Empathy @ the Core

Offering arbitration & pushing the Connected Experiences not only
”Next Best Action” in <200 seconds. for Marketing but also for
Customers. Service & Empathy.

Of the Overall would trade don’t believe

43.5% Subscribers by
2027 on 5G
50% data for 50% + their Telcos are
improved CX proactive
(183M)
Where Customers Start is not where they finish!
Cross Channel effectiveness demands headless processes, connected systems, automation & Decisioning

Footer (Edit footer for all slides with View > Header & Footer)
9
Modern Engagement Stacks
Disconnected and Extremely Complex to Manage

Modeling / AI
Email Web ATM Chat Providers

Direct Retail / Call Content

Mail Branch Center Management

Customer
Mobile Paid Media Search SMS Data Platform
Modern Engagement Stacks
Fully Integrated, Powered by Real-Time Decisioning
Always-On Brain How have they
Real-Time Next Best Actions behaved?

What’s in their
profile?

What data has

streamed in?
Data about
customer
What is
their context?

What is their
Next-Best- propensity?
Actions
(200 ms)

How much is
that worth?

What strategy
What treatment
do we use?
do we apply?
Information Insight Action What action
do we take?
13
Next-Best-Action Decisions ˜ Sales Offers
˜ Retention Offers
˜ Service Nudges
˜ Nurture Messages

Potential Actions for Miranda Eligible? Applicable? Suitable? Arbitrate?

˜ Sales: Rewards Card ü ü X No

˜ Sales: Home Equity Loan ü ü ü Yes
˜ Sales: Mortgage Loan ü ü ü Yes
˜ Sales: Premium Checking ü ü ü Yes
˜ Service: Update Account Information ü ü ü Yes
˜ Service: Fraud Alert ü X ― No
˜ Service: Travel Notification ü ü ü Yes
˜ Retention: Waive Annual Fee ü ü ü Yes
˜ Retention: Double Rewards Points X ― ― No
˜ Retention: $100 Travel Credit ü ü ü Yes
˜ Nurture: Personal Finance eLearning ü ü ü Yes
Should
IsIsshe
it we ˜ Nurture: Chat with Investment Team ü ü ü Yes
applicable?
arbitrate?
suitable?
eligible? ˜ Onboarding: Download Mobile App ü ü ü Yes
˜ Onboarding: Enroll in Autopay ü ü ü Yes
Next-Best-Action Decisions ˜ Sales Offers
˜ Retention Offers
˜ Service Nudges
˜ Nurture Messages

P V L
Potential Actions for Miranda Propensity Value Lever Action ($)

˜ Sales: Home Equity Loan 0.3% $561 0% 1.68

˜ Sales: Mortgage Loan 0.1% $834 5% 0.88

Does it
˜ Sales: Premium Checking 2.7% create value?
$492 10% 14.61

˜ Service: Update Account Information 4.0% $55 50% 3.30

Next Best
Action
˜ Service: Travel Notification 5.6% $23 0% 1.29

˜ Retention: Waive Annual Fee 44.0% $87 25% 47.85

˜ Retention: $100 Travel Credit 26.8% $92 25% 30.82

Will she
˜ Nurture: Personal Finance eLearning accept?
7.0% $135 9.45
Does it0%
need to
be prioritized?
˜ Nurture: Chat with Investment Team 6.2% $208 0% 12.90

˜ Onboarding: Download Mobile App 18.5% $20 25% 4.63

Next Best Action ˜ Onboarding: Enroll in Autopay 16.4% $34 40% 7.81
 Advisor

Contact Summary Relationship

Miranda
Callback: 555-341-1209 Customer ID: CM98172121 Lifetime Value: 78
Phone: 555-341-1209 Customer Since: 2009 Engagement Level: 43
Email: miranda@gmail.com Total Cases: 12 Business Risk Level: 67
Last Interaction: Now
Address: 486 Spotlight Ave Total Accounts: 8 Service Likelihood: 12%
Context: Cross-Sell
New York, New York 13440 Market Segment: High Net Worth In-Market Likelihood: 62%
Case Status: Open (+)

Available Tasks It looks like you have an old 401K that we should roll-over… want to get that started?

Contact Customer Open

Recent Interactions View All

View Account History Open

Call-Center Agent - Inbound
June 3rd (3 Days Ago)
N1432923892 T B R F G

View Interaction History Open

Corporate Website - Inbound
June 3rd (3 Days Ago)
N1432923892 T B R F G

Next Best Actions

Call-Center Agent - Inbound
May 29th (6 Days Ago)
N1419084342 T B R F G

Retention:
Annual Fee Waiver 81%

Call-Center Agent - Inbound

February 23rd (4 Months Ago)
N1368365923 T B R F G

Nurture: Finance Tips 51%

Email Notification - Outbound

Service: Update Contact February 23rd (4 Months Ago)
N1368365923 T B R F G

Details 29%
 Sales-first Empathy-first
Product Product Product Product
Offers A B C D Actions Sell Serve Retain Nurture

Bob Bob

Jennifer Jennifer

Mary Mary

Miranda Miranda

Emily Emily
+$40 / Customer
(incremental value per year)
Hyper Personalize Customers Engagement In Real Time
Communication Industry Use Cases
Prospecting &
Acquiring Customers
Identify the right offer for
Prospects with AI
Remove customers from offers
Leverage contextual intent data
to maximize Marketing spend
efficiency
Expected KPI Impacts:
Improve top funnel
engagement, lower funnel
conversion, and marketing
efficiency
LEARN / BUY
Service
Activation
Guide customer thru service
activation and drive product
engagement
Use contextual data to
optimize service activation
Expected KPI: Improve NPS
by 20%
ACTIVATE, USE, GROW, and SERVICE
Cross-sell / Up-Sell
Efficiently migrate customers
from DSL to Fiber
Leverage adaptive modeling
to identify offer most likely to
convert customer
Expected KPI: Improve
cross/up-sell conversion by
30%
Proactive Service
Engage a customer
proactively when contextual
data indicates there is an
issue
Leverage adaptive modeling
and data to automate
resolution to close
Expected KPI: Customer
NPS improvement of 5% or
more
Proactive Retention
Engage customers
contextually throughout the
customer lifecycle to prevent
higher cost retention saves
Leverage adaptive modeling
to drive customer loyalty &
reduce churn risk
Expected KPI: Improve
retention by 10% or more
DRIVE CUSTOMER
LOYALTY & RETAIN
Center-out™ Business Architecture
SITUATIONAL LAYER CAKE

Layers manage variation, reduce

complexity, and enable reuse
Homegrown
Legacy
DBs/Apps

3rd party
Systems
DX API

BRAINS

PROCESS AUTOMATION C360

Rogue low-code
apps & RPA

LIVE DATA
CASE MANAGEMENT
Data lakes
Products
Systems

Micro-services
SITUATIONAL
20
LAYER CAKE™

• Easily configure variations based on products/services,

geographies, customer types, without re-writing or replicating
processes, data, or customer experiences.
Tradition Marketing vs 1:1 Customer Engagement
The Key Differences

Traditional Marketing 1:1 Customer Engagement

Starts by selecting a product to Starts by selecting a customer to
Sales-First Customer-First
communicate about. communicate with.

Uses messages designed to sell products Uses messages designed to solve problems;
Offer Actions
and services to customers. like sales, service, retention, and nurture.

Assign customers into groups based on similar Personalizes CX around the needs of a
Segment One-To-One
attributes and behaviors. single individual.

Delivers an offer to a group of customers, Delivers an action to a single individual,

Batch Real-Time
when the business is ready. when that person is ready.

Relies on deterministic business rules to Uses adaptive models to pick the most
Rules-Based AI-Driven
eliminate targets from the campaign audience. relevant actions and treatments.

Utilize independent logic and strategies, One voice unifies strategies across entire CX,
Channel-Specific Omnichannel
optimizing for channel-specific KPI optimized for all high-level KPI.
The Four Modes of Decisioning
Always-On Customer Engagement

#1 #2 #3 #4

Real-Time Periodic Emergency Event-Triggered

Decisions for Inbound Decisions for Outbound Decisions With Immediacy Decisions on Data Streams

Decisions made in direct Decisions made on an Decisions that auto-assign Decisions made in
response to customer established schedule, to a message to the highest- response to incoming data
engagement on an inform targeting & priority, ensuring it’s the revealing a problem or need,
interactive channel messaging of outreach next delivered with potential for outreach

Example: Example: Example: Example:

An ad personalized for A retention offer sent via After a data breach, a high- A mobile-push notification
Sara, in the milliseconds before email in a scheduled run, after priority message is added, and Sara notifying Sara that she left her
she sees it in the hero banner daily scoring reveals that Sara and all impacted customers are card in the ATM, after receiving
of the company website has become a churn risk immediately notified a signal from the device
 2/3
Customers don’t
believe we actually care
about their needs
Why Personalization
Fails?
 income income income income income
propensity [0:100] propensity [100:200] propensity [200:300] propensity [300:400] propensity [400+] propensity
product [0:.005] product [.005:.010] product [.010:.015] product [.015:.020] product [.020:.030] product [.030:.040]
[A] [A,B] [A,C] [B,C] [A,E] [B, C,D]

propensity propensity
[0:.005] [.040:.045]

age age
[60+] [60+]

product product
[!A] [B, C,D]

age age
[50:60] [50:60]

propensity propensity
[.005:.010] [.045:.060]

age age
[40:50] [40:50]

product product
[!A and !B] [A,E]

propensity propensity
[.010:.015] [.060:.080]

age age
[30:40] [30:40]

product product
[!none] [B,C]

age age
[0:30] [0:30]

propensity propensity
[.015:.020] [.080:.100]

product product product product product product

[!none] [!A and !B] [!A] [A] [A,B] [A,C]
propensity income propensity income propensity income propensity income propensity income propensity
[.020:.030] [0:100]
[.030:.040]
[100:200]
[.040:.045]
[200:300]
[.045:.060]
[300:400]
[.060:.080]
[400+]
[.080:.100]
 income
propensity [400+] propensity
[.030:.040]
[.020:.030]

product
product [B, C,D]
[A,E]

age age
[60+] [60+]

product
[B, C,D]
income
[400+]

propensity
[.030:.040]
product
[A,E]
Why This Fails
Lack of Relevance
Lack of Context
Lack of Timing
Lack of Empathy
That Lack of Empathy
Creates An Artificial Ceiling

Untapped customer value

Value

Time
Get Relevant Or Get Ignored
Why top organizations are shifting to 1:1 engagement

Download this paper to learn why “product-push”

engagement is broken – and how leaders are
changing their approach in to fix it:
• Centralizing intelligence across channels & LOBs
• Moving from segments to a 1:1 approach
• Evolving from batch campaigns to real-time
This paper breaks down:

• How next best action really works (P*V*L)

• How to model the data, and prioritize decisions
• Which real-time events and triggers drive value
• Best-practice roadmaps & real-world use cases

https://www.pega.com/always-on-engagement
Why Real-Time Really Matters
The four cornerstones of real-time decisioning

CX has hit a wall across many industries.

Companies are using outdated approaches and
technologies to try and solve complex
engagement problems.
Customer’s context is constantly changing.
Moments of opportunity open and close within
seconds. To compete, you need to make
decisions in real-time.
In this paper, Pega breaks down the four
cornerstones of real-time decisioning:
• Detection
• Data
• Decision
• Delivery
https://www.pega.com/why-real-time
decisioning-really-matters
32

Pega gives you a proven path to value*

Start fast, and scale quickly

< 90 days 6 months 9 months 12 months beyond

Call center Web channel Mobile app Always-on Paid digital ads
outbound
Real-time, AI-powered 1:1 personalization AI identifies key Next-best actions
next-best action offers, messages, of app content, customer needs, integrated directly
recommendations & content always-on triggers email, into paid
for call-center notifications SMS, direct mail advertising
agents & alerts platforms

Journey-by- Uses rapid 90-day Decreased time- Faster Faster project

journey delivery model implementations to-value project pay- pay-back
approach back

*optional, go-live approach.