Geoff
Coleman
on
Apr 08, 2016
As new digitalized products and services are offered in the business-to business and business-to-consumer markets, companies have an opportunity to transform their customer interactions by taking advantage of real-time data analysis. Businesses offering digitalized products, such as OTT streaming video, have been pursuing Complex Event Processing (CEP) systems to help them create a better experience for customers through enhanced personalization. This helps to increase wallet share and reduce customer churn.
What Is Complex Event Processing?
Complex Event Processing—sometimes also referred to as “streaming analytics”—gathers and analyzes data from many sources throughout the enterprise, in order to make real-time decisions. According to Stanford’s CEP expert, David Luckham, “an event is an object that represents or records an activity that happens.” Examples of individual transactional events could include issuing a purchase order, placing an online order, receiving a confirmation email, and later receiving a shipping notice and a bill.
CEP processes billions of transactions per second. As implied by the word “complex”, CEP systems aren’t looking at one event at a time or single events in isolation. Instead, these systems identify complex patterns in the event cloud using real-time analytics, rate their significance and make decisions based on a rules-based engine, and then trigger other sequences of events. For example, in the financial world, CEP is used for transaction security—a suspicious pattern of purchases will shut down a credit card account until the customer can be reached for verification.
In a digitalized world, businesses need to bring products to market quickly and have the ability to monetize data into valuable opportunities through real-time analytics. CEP helps businesses automate very complex processes, so that real-time interactions with customer-facing systems can be automated, yet highly intelligent. This is particularly critical for the success of companies that provide cloud solutions, digital entertainment and media, communications services, and Internet of Things (IoT) products.
Why Is CEP Important?
According to Research and Markets, the global CEP market is poised for phenomenal growth—“from $1.41 Billion in 2015 to $5.12 Billion in 2020, at a CAGR of 29.41% during the period 2015 to 2020.” CEP enables businesses to add many layers of personalization into the customer experience. Based on real-time analytics of the event cloud, CEP can trigger decisions about which offers a customer is most likely to accept, when to present those offers, and through what channel.
Let’s take an example based on a streaming OTT digital service. Based on past usage data as well as dynamic customer profiles, CEP can determine that a customer who is a teacher and has children at home will purchase more pay-per-view movies through their streaming service during spring break, when school is out. This could create an opportunity to offer a new product—perhaps an all-you-can-stream pass for the week, or a discount if the customer purchases more than five movies that week. In a b-2-b scenario, it might involve asking business customers if they need to bump up data plans to during March Madness to provide additional bandwidth for users sneaking a peek at the game.
CEP also helps enable companies deploy digital freemiums to allow customers to try before they buy. From apps that work with IoT enabled products, to streaming digital services, CEP powers the ability to give customers a limited-functionality version of a product or service, and then instantly switch them to the full-featured product upon customer request.
This ability to deeply personalize the customer experience earns customer respect and reduces customer churn. The customer experience evokes the feeling that the provider “just knows” exactly what the customer needs and wants—and when they want it. It’s powerful stuff for building long term, profitable customer relationships.
How Does a Revenue Management Platform Add to the Value of CEP?
Revenue and subscription management—including the ability to process complex, usage-based billing scenarios—is a critical adjunct to CEP. As the CEP system interacts with the customer and makes real-time ratings and decisions about offers, an integrated revenue management platform, such as TRACT, is needed to maximize both revenue and operational efficiency.
Through its rich API and webhook library, TRACT can integrate with CEP systems to provision digital products, subscriptions, and usage-based offerings. The action framework in TRACT can trigger monetizable events, based on webhooks called from the CEP system. This enables businesses with integrated CEP and agile monetization platforms to leverage usage data to find additional cross-sell and up-sell opportunities, optimizing the match between customer needs and service offerings which helps to reduce customer churn.
Using the example of freemium offers, CEP would rate real-time customer interactions to make decisions about the best upsell offers to present. As the customer accepted an offer, TRACT would monetize the event by provisioning the desired subscription or feature package and billing the customer for the correct amount of usage. In this way, TRACT and CEP can achieve more together, in terms of personalization and monetizing opportunity, than either platform would accomplish on its own.
Every one of the monetizable events triggered is based on real-time analytics. These processes are fully automated, with the API integration completely eliminating the need for swivel chair data entry. Businesses can add best-of-breed adjunct billing to CEP and incorporate them into the IT stack. Used together, CEP and agile monetization automation powers intelligent, real-time customer interaction that maximizes efficiency and profitability while enhancing customer service.