KPIs reporting and value measurement best practices

This video shows you how to implement best practices for KPIs, reporting, and value measurement with Pega Customer Decision Hub™. These best practices, which are based on deep product knowledge and years of delivery experience with clients worldwide, help organizations maximize their Pega Customer Decision Hub implementation.

Taking time to review KPIs, reporting, and value measurement is essential when an organization shifts to a one-to-one customer engagement strategy and implements Pega Customer Decision Hub as the underlying technology. Through this process, you can:

• Receive quantitative evidence to prove the value of your investment.
• Track benefits over time to identify performance trends and opportunities for improvement.
• Build a compelling case for expansion to new channels or use cases.
• Avoid legacy ways of working and align organizational incentives with the new vision for customer engagement.

To measure and track success with Pega Customer Decision Hub implementations, consider the following five factors:

• Establish clear and relevant business objectives that align with your new vision for inclusion in the Pega Customer Decision Hub taxonomy.
• Define success factors and expected return on investment (ROI).
• Identify the correct KPIs to measure the success of your customer engagement initiatives and track application performance.
• Ensure that the organization can source the required data by identifying key metrics early in the planning process.

Design or configure relevant reports and clearly define the reporting process.

To track and measure the performance of your marketing strategy and the value derived from it, define and measure KPIs and compare their performance to alternative ways of working (for example, a legacy system) to derive an uplift. Your Microjourney®, which reflects a business objective, should drive the KPIs. Define KPIs against each Microjourney, and the actions under this issue in the taxonomy translate to measurable data towards each KPI in Pega Customer Decision Hub.

To measure and report on Pega Customer Decision Hub KPIs effectively, consider the following three key factors

1. Establish relevant control groups to measure the uplift of various factors.
2. Use Pega functionality to ensure good quality production data in your Business Operations Environment (BOE).
3. Extract relevant data from Pega Customer Decision Hub and combine it with data from external sources to derive the full scope of value.

Establishing a baseline involves setting up recommended test and control groups to understand the value that the organization gains from using Pega Customer Decision Hub.

When evaluating the effectiveness of a particular strategy or action, there are lifts that are really useful to understand.

See the impact of using the next best action strategy versus nothing. Set up a holdout group external to Pega Customer Decision Hub. Measure the same KPIs and perform the same calculations for both groups to see the impact.

Evaluate the lift of the next best action versus using a legacy system. Set up a holdout group that is external to Pega Customer Decision Hub. Measure the same KPIs and perform the same calculations for both groups to see the impact. When replacing a legacy system, run both systems simultaneously for a pilot period to understand the lift achieved from the Pega Customer Decision Hub implementation. After the pilot period, one of the best metrics to understand is the lift of Pega Customer Decision Hub versus choosing a random eligible action. This particular experiment comes out of the box as part of the Impact Analyzer.

Impact Analyzer creates great holdout groups and experiments out of the box to help you understand the impact of your Pega Customer Decision Hub configuration, such as comparing the next best action versus assigning a random eligible action, comparing the calculated propensity versus random propensity, and Next-Best-Action Designer configuration (for example, using levers versus not using levers).

With a little configuration in Pega Customer Decision Hub, you can also determine the lift of Adaptive Models versus other models that you are considering using or have used in the past.

Pega Customer Decision Hub includes the Impact Analyzer tool to continuously test the health of your next best action and show stakeholders the value of the system. Impact Analyzer automates a series of test and control tests to show the lift in customer engagement and value, how well your models and Rules are working, and where the value is coming from.

Impact Analyzer includes five tests:

1. Performance of next best actions against a random action.
2. Next best actions without any levers applied.
3. Propensity of an Adaptive Model versus a random result.
4. Engagement policies versus a full next best action.
5. Propensity of an Adaptive Model versus a full next best action.

The final test is a combination of all the others and provides a composite of the health score of the next best action.

Now that you understand the importance of the test and control method and the control groups that are in place, you can focus on the data that is relevant to those KPIs you need to measure and feed into your calculations or Insights from the tools in Customer Decision Hub.

Make use of the great tools in Pega Customer Decision Hub to understand value and identify opportunities for improvement, such as Impact Analyzer, Action Performance Tracker, Value Finder, and Scenario Planner. You need high-quality, real-life data to work with and an environment to work in, which is the Business Operations Environment (BOE).

The BOE environment is special because it is a production-level environment. After you set up a data migration pipeline from production to simulation, you get a great production-like space to play with and really understand the impact of your next-best-action strategy.​ This data includes things that you do not have in your normal development or test environments, such as aggregated interaction history, so that you can get a much fuller understanding of the real-life impact of your configuration.

Pega Customer Decision Hub offers interfaces and discovery tools to help you identify areas for continuous improvement and measure value:

• Use Action Performance Tracker to evaluate the performance of specific actions.
• Use Impact Analyzer to determine the value and system health of the Pega Customer Decision Hub configuration.
• Use Value Finder to simulate the quality of engagement across your customer base, identify how you can improve outcomes, or find new opportunities for actions or underserved customers.
• Use Scenario Planner to perform a 'what-if' analysis and show the impact of a change or a potential change to the Pega Customer Decision Hub configuration.

For more information on these Out of the Box tools, refer to Pega Documentation or Pega Academy.

To get a full picture of value, we need data from Pega combined with external resources. These reports usually combine Interaction History and other data from Pega Customer Decision Hub to load into an external data warehouse and combine with other rich enterprise data for further analysis.

Financial information from the wider organization plays an essential role in fully realizing the value of Pega Customer Decision Hub. Coupled with financial information, you can visually detail the value of Pega Customer Decision Hub to the business. Third-party reporting tools, combined with action and interaction history information available for extraction from Pega Customer Decision Hub, show the impact on KPIs. 

By combining the Interaction History information with financial information from the customer, such as how much revenue a single offer brings in or how much savings come from a retained customer, you can clearly and tangibly show the value of Pega Customer Decision Hub, especially when compared to a baseline as illustrated in the test and control method section. 

Now that you know more about the three key factors to achieve best practice KPI, value measurement, and reporting, take a look at an example of the factors in practice.

In your taxonomy, you are likely to have an issue that relates to cross-selling and upselling. This example works through the KPIs that are best practices to measure and look at how you can calculate the impact of using Pega Customer Decision Hub in a new implementation to replace a legacy system.

The funnel on the left illustrates how you derive value as an organization from your marketing strategies that you run in this case with Pega Customer Decision Hub.

Under this issue in your taxonomy, you have a collection of actions with various treatments ready for potential selection as the next best action at every customer touchpoint. Every customer touchpoint is an opportunity to interact or to present them with a message. However, at the point of presentation or even at the point of conversion, you cannot yet determine that value that Pega Customer Decision Hub derived. After conversion and fullfulling an order, Pega Customer Decision Hub can derive value from the profit margin and the tenure of the conversion.

So, considering this funnel, the orange boxes identify four KPIs that feed into a calculation to determine the value derived from all the actions under the cross-selling upselling issue:

1. Interactions/month is the number of opportunities to present an offer to a customer, such as site visits.
2. The Fulfilment rate comes from the data extracted from Pega Customer Decision Hub in combination with external data and is the proportion of sales that are fulfilled.
3. The Average monthly margin/conversion comes from the data extracted from Pega Customer Decision Hub in combination with external data and is the average margin generated by each of the sales.
4. The Average tenure of conversions comes from data extracted from Pega Customer Decision Hub in combinatoin with external data. It is the average length of time for which you expect the customer to continue paying for the services, expressed in months.

The teal boxes represent KPIs that do not feed directly into a calculation of the derived value but can benefit the business case with supporting information:

• Measurement of the Engagement rate comes the Action Performance Tracker and is the number of offers that customers actively receive.
• The Conversion rate comes from data extracted from Pega Customer Decision Hub in combination with external data. It is the number of offers accepted divided by the total number of interactions.
• The Transactional NPS comes from data extracted from Pega Customer Decision Hub in combination with external data and is the average of the NPS scores collected across all the interactions.

Understanding what these KPIs are makes it clear how it is essential to use data from Pega Customer Decision Hub in combination with financial information and data from other sources. The taxonomy structure in Pega Customer Decision Hub makes it easy to slice data relevant to a particular business objective, such as cross-selling and upselling, and export it to enrich with external data and truly understand value.

You calculate the value of cross-selling and up-selling by multiplying the four main KPIs together. To understand the impact of Pega Customer Decision Hub, use the test and control method, comparing the test group using Pega Customer Decision Hub with a control group that uses the legacy system. The system collects the same KPIs for the test and control group, and performs the same calculation, so you can understand the impact of Pega Customer Decision Hub by subtracting the control from the test to see the lift.

Report KPIs to the Head of 1:1 Customer Engagement, Business Stakeholders, Channel Ops, and Team Leaders. As a best practice, conduct weekly reporting to the organization's NBA Execution Forum to track value regularly and make actionable insights.

KPIs, reporting, and value measurement are integral to the BAU cycle by driving change and continuous improvement. Insights from Pega Customer Decision Hub tools can trigger the creation of new actions and improve customer conversations.

You have reached the end of this video. What did it show you?

• The importance of reviewing KPIs, reporting, and value measurement when implementing Pega Customer Decision Hub.
• The key factors to consider for measuring and tracking success with Pega Customer Decision Hub.
• How to establish a growth foundation by defining and measuring KPIs.
• How to effectively report on Pega Customer Decision Hub KPIs.
• The role of Impact Analyzer and other included tools to measure value.
• The importance of combining Pega data with external resources for a full picture of value.
• An example of evaluating cross-selling and up-selling KPIs and calculating the business benefit.
• The reporting processes and how to drive changes from value measurement.