• Save
Market Basket Analysis: examining Cross Category Incidence for a chain of Beauty & Fitness centers
Upcoming SlideShare
Loading in...5
×
 

Market Basket Analysis: examining Cross Category Incidence for a chain of Beauty & Fitness centers

on

  • 1,619 views

The client wanted inTouch to measure customer propensity to purchase cross-category services – fitness customers’ affinity to purchase beauty services and vice-versa – and investigate substitute ...

The client wanted inTouch to measure customer propensity to purchase cross-category services – fitness customers’ affinity to purchase beauty services and vice-versa – and investigate substitute and complimentary relationships among the service offerings. inTouch was mandated – as part of a rewards program it had devised and implemented – to analyze customer purchase records and design customer segment-specific cross- and up-sell tools for frontline staff to use. The analysis was also expected to build out baskets of service offerings that could be inputs to future bundling offers.

Statistics

Views

Total Views
1,619
Views on SlideShare
1,619
Embed Views
0

Actions

Likes
1
Downloads
0
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Market Basket Analysis: examining Cross Category Incidence for a chain of Beauty & Fitness centers Document Transcript

  • 1. Market Basket Analysis: examining cross-category incidence Client: One of India’s largest Beauty & Fitness Center Chain
  • 2. Market Basket Analysis inTouch has delivered year-on-year benefits to several clients in a wide variety of businesses – Consumer, Retail, Ecommerce, Food & Beverages, Jewelry, Beauty & Healthcare, Founder–Director: ‘Way of Life’ has now become a way of doing Education, Satellite and Web Communication, business for us! Petroleum, HR Services and more – over several long term and on-demand Manager–CRM: inTouch helped us build and nurture what many engagements for the past 5 years. other CRM agencies had just about begun to ruin – our customer Salary Computational Tool for the largest relationships.. temp staffing business in India >> predicts market benchmarked salaries based on skills S t o r i e s and attrition scores The client wanted inTouch to measure customer propensity to Pricing and Discount Optimization for the purchase cross-category services – fitness customers’ affinity to world’s largest Satellite Communication purchase beauty services and vice-versa – and investigate business >> has delivered more than $100 substitute and complimentary relationships among the service million in potential annual savings for the S u c c e s s business offerings. inTouch was mandated – as part of the ‘Way of Life’ rewards program it had devised and implemented – to analyze customer purchase records and design customer segment- Sales Program Effectiveness for America’s largest Air conditioning systems provider >> specific cross- and up-sell tools for frontline staff to use. The has afforded visibility into rates of return analysis was also expected to build out baskets of service delivered by various marketing programs offerings that could be inputs to future bundling offers. across sales territories in North America The case Supply-Demand Matching & Optimization Tool for a large Staffing Service provider in India >> The client was looking to upgrade customers that had undergone has brought down doability turnaround from 3 fitness programs to its suite of beauty services. The challenges weeks to across the table for the salesforce were manifold – Topline growth oriented rewards programs for 1. The brand was perceived predominantly as one that a market leading Filter Coffee business in India stood for fitness >> has delivered a 3-fold increase in revenues 2. Sales staff hard sold customers such services that fetched for 3 straight years for the 425 outlet chain highest commissions, regardless of what customers might actually need/benefit from 3. The client had significant spends on short term bundled Customer Feedback Decision Support and offers that did not achieve revenue objectives Smart Response System for India’s largest fine dining restaurant chain and many more market leading café and QSR chains >> drives a significant percentage of repeat visits across the 20 outlet restaurant chain
  • 3. Analysis Techniques inTouch used Association Rules and Multivariate Logit Models to examine cross-category incidence between Beauty and Fitness services. Association rules are used to group subsets of product categories together. The Multivariate Logit Model identifies and quantifies cross– category choice effects of marketing–mix variables. Results Results of the analysis (see Variable Sessn_Pkg Target_Pkg Bod_Frmr Full_Wxg FMP illustration alongside) show all Direct Effects cross–category effects to be Intercept 0.89 1.79 2.04 0.83 -1.69 negative and significant. The Loyalty 0.73 0.71 1.29 0.86 0.91 Time -0.21 -0.33 -0.26 -0.19 0.87 negative values lead to Price -0.76 -2.00 -0.88 -0.01 0.58 considering these two Offers 2.19 0.13 -0.39 0.38 0.09 Cross-Category Effects categories as substitutes – Size 2.12 2.12 2.01 2.27 2.27 they depict complimentary Sessn_Pkg - -1.89 -1.93 -2.08 -1.67 purchase behavior. The more Target_Pkg -1.89 - -3.02 -1.39 -1.72 Bod_Frmr -1.93 -3.02 - -1.70 -0.95 negative the estimates are Full_Wxg -2.08 -1.39 -1.70 - -1.93 closer is the complimentary FMP -1.67 -1.72 -0.95 -1.93 - relationship. The Business Solution The illustration is for a limited number of categories. The complete set of results delivered to the client – as part of the business solution – included parameter estimates across all service categories, suggestive selling (cross- and up-sell) models and recommendations on bundling of offers. Bottomline Across hundreds of service offerings, and potentially numerous permutations and combinations, the business was able to choose those that are likely to result in high customer response ratio. The business would now be able to predict, at a customer segment level, what combination of service offerings are likely to be bought more readily by customers.
  • 4. Every day analytics Assured Results and RoI Incremental and scalable Built and managed for your business inTouch analytics, Floor 2, #33/5, NHS Road, V. V. Puram, Bangalore, India. Pin: 560004 Mail response@be-in-touch.com Call +91-80-32929411 Visit www.be-in-touch.com