PEGA Simulation - A Technique in the PEGA Marketing to test and Solve Problems in the Marketing KPIs

Today i would like to give some insights on The Use of PEGA Simulation in Solving the Problems in Business/Marketing KPIs. This article focuses on utilization of analysis of different possibilities using a Simulation feature made available in PEGA Customer Decisioning Hub. For a given business problem, there will be more than one solution. Each solution is analyzed with the help of simulation. They have been evaluated and the optimal solution was selected. 

The modern trend these days is to optimize everything that we can, especially in Marketing when PEGA Customer Decision Hub installed to drive the Marketing messages for an Enterprise. The result is the achievement of predetermined targets (KPIs), such as reducing Churn, Increase Revenue from Each customer, Increase Margin and increase the proposition value for each customer. Most of the Organizations are lagging in measuring & optimizing the Outcome of the Marketing messages against Organization KPIs. It is not all about recommending the ‘number’ of marketing messages at various customer touch points. Organizations could start exploring the ways to optimize the current logic and run the various simulation options to understand the Strategy which brings values close to the KPIs made available. 

Let's discuss one of the Telecom business problems and understand how PEGA Simulation will help Markets to test and Learn to maximize the business outcome. Aka. KPI

Problem:

Let's consider three huge companies in the telecommunications market in the US. Each company sold some of the four products (known as “quadruple play” when combined), including high speed Internet, cable TV, telephone, and cell phone services. Many households purchased individual services from the different companies. The aggressiveness of the players made “product bundling” a key marketing strategy, but there was not a clear understanding of how to use this strategy, or the impact it might have on the market.

Company A wanted to enter the markets that they hadn’t covered yet OR they wanted to cross -sell other products, but each one knew that penetrating the competitor’s niche would force them to reply in the same manner. 

The challenge was to build a Strategy (Including Product Price and Offer price etc.. ) that would allow the client to analyze several scenarios, taking into account the whole telecom market (with its 3 major players) and the “product bundling” effect. 

Solution:

After doing enough market study, the Marketing Team of Telecom company Arrived prices and offers for each product bundle combination. Marketing team arrived at the conclusion of “quadruple play” buble cost could be either $200 OR $220. They are not sure which price point would help to benefit both the customer and Organization to maximize their value.  

Organization A can leverage PEGA Simulation capability to understand the impact of business KPIs (Churn, Revenue and Margin) keeping the possible price combinations to determine the best pricing Strategy. Strategy which gives us closest KPI outcome can be selected for Implementation. 

Outcome:

It was the high flexibility of using PEGA Simulation capability to build, measure and Learn possible what-if scenarios. Outcome of the Simulation result can be discussed with Marketers explaining various organization specific KPIs. Marketing team could make Informed Decisions based on the simulation results produced for each what-if variance.  

Simulation is one great technique that allows us to have a reliable view of possibilities before getting into Production. So we have a simple way to test an infinite number of variants to solve the problem and for the actual implementation to choose the best possible solution to the situation.Simulations help to detect problems and complications that resulted in normal operation and save significant costs that we had to then spend on their removal. In practice it is impossible to try different alternatives, in terms of irreversible steps that are expensive. 

 

Conclusion:

By using simulation experiments, we can obtain results for different alternatives. Team can share the informed choices to the Marketing team before taking Decision to implement any Marking Strategies. There is a detailed knowledge base article made available in PEGA for managing Simulation tests in Customer Decisioning Hub. More details can be found here https://community.pega.com/knowledgebase/articles/decision-management/85/managing-simulation-tests-pega-customer-decision-hub

PEGA Decisioning - Decision Table to be defined on the Strategy Result (SR class) or a Customer class? How to Deciside?

One common design question usually asked by many of our Decisioning Architects is, where should i define my Decision Table? Whether the Decision Table to be defined on the Strategy Result (SR class) or a Customer class? How to choose the Applies to Class while creating my Decision Table in my Decisioning application. 

The Decision Table can be defined on the Strategy Result, SR class, or a Customer class. The choice often depends on where the properties used in the Decision Table are located. Let us discuss the following three design options:

If the Decision table is using the properties from the Customer Class and Decision Table returns result from Decision Table OR result of the Decision Table directly sets the property available in the same customer class, you should create Decision Table in a Customer class. 

If the Decision table is using the properties from the Customer Class, if you want to refer the very few computed properties from SR class, creating Decision Table in Customer Class OR SR class OR both options are valid. The design decision here could be, if you want to set result of the Decision Table to a specific property directly from the Decision Table. If you want to set the result of DecisionTable to a SR class, Create the Decision Table in SR class. If we want to set the result of DecisionTable to a Customer class, Create the Decision Table in Customer class. If the Decision Table returns the result and result of the Decision table referred using pxSegment result property, creating DecisionTable in Customer,SR class both valid. 

 

Let us take an example below. Customer CreditScore is a derived property from SR class. OutstandingLoanAmount is a Customer class property. Based on these two property values, Decision Table returns RiskScore.  

Decision Table to compute the RiskScore

Creating the table requires two condition columns. First is the Principal Loan, which is the property in the data model representing the outstanding loan amount. 

The Operator represents the condition applied to the column. In this case, greater than, which allows you to express the Outstanding loan amount condition from the requirement.

The second condition column is the Credit Score property. The Credit Score is a parameter, so you need to use the Param.PropertyName construct.

The Use Range checkbox groups the credit scores together.

Fill in the bank’s requirements and specify a Return value for each row in the table.

Filter credit cards based on the calculated risk segment

Configure two Filter components to ensure that you identify High Risk and Low Risk customers.

Based on the Customers in the risk category, we can compute the customers eligiblity. The pxSegment Strategy property contains the output of the Decision Table.

Still confused with the Desion option to Define the Decision Table in a PEGA Decisioning application? Feel free to reachout to me.

Happy Learning, 

Nanjundan Chinnasamy