Customer Value Management Adaptive Technologies, Inc. (ATi) PRESENTED TO: The American Marketing Association - Phoenix August 27, 2008

Presenter: Susan Cordts, President / CEO Recognized leader of growth-oriented and developing companies. Primarily focuses on ATi’s strategic and client relationships. Expert in creating solutions in a variety of industries using predictive analytics and advanced technology. Masters in International management (MIM) – Thunderbird, The Garvin School of International Management. Adaptive Technologies, Inc. (ATi) 4530 East Shea Boulevard, Suite 130 Phoenix, Arizona 85028 602-923-4200 [email_address]

Recognized leader of growth-oriented and developing companies.

Primarily focuses on ATi’s strategic and client relationships.

Expert in creating solutions in a variety of industries using predictive analytics and advanced technology.

Masters in International management (MIM) – Thunderbird, The Garvin School of International Management.

Adaptive Technologies, Inc. (ATi)

4530 East Shea Boulevard, Suite 130

Phoenix, Arizona 85028

602-923-4200

[email_address]

Marketing’s Challenge Customer Value Management Results Process Deployment for success Business Intelligence vs. Predictive Modeling Conclusions Agenda

Marketing’s Challenge

Customer Value Management

Results

Process

Deployment for success

Business Intelligence vs. Predictive Modeling

Conclusions

Daily Challenge To reach our “targets” for the month, quarter, year Revenues Profits Leads Net new customers Product sales

To reach our “targets” for the month, quarter, year

Revenues

Profits

Leads

Net new customers

Product sales

Meeting the Challenge Focus on acquiring new customers Increasing sales with current customers Retaining loyal customers Identifying high revenue customers Focus on customers who are highly profitable Customers in a given segment or product line Segment our customers a number of ways to be able to work with them in a number of venues

Focus on acquiring new customers

Increasing sales with current customers

Retaining loyal customers

Identifying high revenue customers

Focus on customers who are highly profitable

Customers in a given segment or product line

Segment our customers a number of ways to be able to work with them in a number of venues

Effective? Are we doing this in the most efficient and effective way? Do we really understand our customers’ potential values through our current methodologies? Are we looking forward or looking at the past in these processes? How certain are you that you will reach your targets?

Are we doing this in the most efficient and effective way?

Do we really understand our customers’ potential values through our current methodologies?

Are we looking forward or looking at the past in these processes?

How certain are you that you will reach your targets?

Organizational Data Collect large volumes of data In multiple silos within the company Difficult to access and/or analyze it Use portions of it to drive decisions via reports Multiple reports for various departments and views of the organization Different cuts of the data are used to tell different stories in different scenarios

Collect large volumes of data

In multiple silos within the company

Difficult to access and/or analyze it

Use portions of it to drive decisions via reports

Multiple reports for various departments and views of the organization

Different cuts of the data are used to tell different stories in different scenarios

Customer Value Management A methodology for looking at your customers in a whole new way Let data tell the story Based on how they meet your organizations’ goals Leveraging data to paint a colored photo of them rather than a stick man image Ability to put them under any and all appropriate boxes No need to think of them uni-dimensionally

A methodology for looking at your customers in a whole new way

Let data tell the story

Based on how they meet your organizations’ goals

Leveraging data to paint a colored photo of them rather than a stick man image

Ability to put them under any and all appropriate boxes

No need to think of them uni-dimensionally

Goals First Focus on the portfolio of customers to meet your organization’s goals Maximizing Customer Lifetime Value Gaining the customer is only half the battle Varies for individual customer Goal is to be able to engage with the customer in such a way as to achieve her maximum potential

Focus on the portfolio of customers to meet your organization’s goals

Maximizing Customer Lifetime Value

Gaining the customer is only half the battle

Varies for individual customer

Goal is to be able to engage with the customer in such a way as to achieve her maximum potential

Results Reach the right customer at the right time with the right offer via the right media Efficiently and effectively reach your goals through the appropriate mix of quality and quantity

Reach the right customer at the right time with the right offer via the right media

Efficiently and effectively reach your goals through the appropriate mix of quality and quantity

Criteria to Consider ROI over the next 3 years will be greater than the investment Volume of customers Growth plans and strategies Availability of data Willingness to “do” something different based on the results Openness to hearing something different than your current intuition Forgoing intuition when the data doesn’t support it

ROI over the next 3 years will be greater than the investment

Volume of customers

Growth plans and strategies

Availability of data

Willingness to “do” something different based on the results

Openness to hearing something different than your current intuition

Forgoing intuition when the data doesn’t support it

How Do You Do It? Integrate data Customer demographic data Sales or transactional data Append socio-demographic data Available from a number of sources Attitudinal or survey data Cost and revenue data Utilizing in-depth data mining techniques determine what your customers look like across all the variables Best if you can avoid selecting the few that you “think” are important

Integrate data

Customer demographic data

Sales or transactional data

Append socio-demographic data

Available from a number of sources

Attitudinal or survey data

Cost and revenue data

Utilizing in-depth data mining techniques determine what your customers look like across all the variables

Best if you can avoid selecting the few that you “think” are important

Data Mining Is the process of sorting through large amounts of data and picking out relevant information The nontrivial extraction of implicit, previously unknown, and potentially useful information from data A form of business intelligence Historical

Is the process of sorting through large amounts of data and picking out relevant information

The nontrivial extraction of implicit, previously unknown, and potentially useful information from data

A form of business intelligence

Historical

Predictive Modeling Use of a variety of techniques from statistics and data mining to analyze current and historical data to make predictions about future events Crystal ball based on objectivity! Leverages good data mining to look to the future Who is likely to do what and when

Use of a variety of techniques from statistics and data mining to analyze current and historical data to make predictions about future events

Crystal ball based on objectivity!

Leverages good data mining to look to the future

Who is likely to do what and when

Achieving Your Goals Who is likely to be relevant and appropriate to target for what Irrespective of whether they are loyal, highest revenue generating, most profitable Look at customers a number of directions to view those who fit under other segments or labels Allows you to understand your strategies better Understanding what works for whom

Who is likely to be relevant and appropriate to target for what

Irrespective of whether they are loyal, highest revenue generating, most profitable

Look at customers a number of directions to view those who fit under other segments or labels

Allows you to understand your strategies better

Understanding what works for whom

It Works! Leverage your in-depth data mining to predict who to target for what, when, and via what media to have the highest likelihood of achieving your goals Allow new events within your data to update the “scoring” so that you continue to reach out to your customers when it is relevant Improves results to 20-60%

Leverage your in-depth data mining to predict who to target for what, when, and via what media to have the highest likelihood of achieving your goals

Allow new events within your data to update the “scoring” so that you continue to reach out to your customers when it is relevant

Improves results to 20-60%

Predictive Modeling vs Business Intelligence Predictive modeling allows you to make decisions for the future with some certainty of what the future will bring BI is historical information from your data History is very important in order to predict Looking in the rear view mirror is not likely to get you where you need to go Generally you use BI to anticipate what is likely to happen in the future Without using modeling to assist, these are educated guesses

Predictive modeling allows you to make decisions for the future with some certainty of what the future will bring

BI is historical information from your data

History is very important in order to predict

Looking in the rear view mirror is not likely to get you where you need to go

Generally you use BI to anticipate what is likely to happen in the future

Without using modeling to assist, these are educated guesses

Successful Implementation Focus on the business needs first How will the results be used What are you willing to do based on the results How will you implement the results throughout your organization Determine what will be a “homerun” from the project Engage your modeling department to determine internal competency to reach your goals Seek external resources as needed Understand the capabilities of the vendor Ask for detailed disclosure of costs and deliverables

Focus on the business needs first

How will the results be used

What are you willing to do based on the results

How will you implement the results throughout your organization

Determine what will be a “homerun” from the project

Engage your modeling department to determine internal competency to reach your goals

Seek external resources as needed

Understand the capabilities of the vendor

Ask for detailed disclosure of costs and deliverables

Collaboration Include IT early in the phase Understand technical definitions of data Access to the data Review the results Create “interventions” to act on the results Align your department to respond accordingly Continue to measure your results and adapt accordingly to meet your goals

Include IT early in the phase

Understand technical definitions of data

Access to the data

Review the results

Create “interventions” to act on the results

Align your department to respond accordingly

Continue to measure your results and adapt accordingly to meet your goals

Improved Implementation Software-as-a-service Quicker implementation No need to buy software or hardware No need for internal expertise Learning system Eliminates the need for updating of models Real-time analysis expands usability in the organization Solution versus tool Integrated within business processes to drive results at point of contact or interaction No need for consultants to use the tool

Software-as-a-service

Quicker implementation

No need to buy software or hardware

No need for internal expertise

Learning system

Eliminates the need for updating of models

Real-time analysis expands usability in the organization

Solution versus tool

Integrated within business processes to drive results at point of contact or interaction

No need for consultants to use the tool

Improved Implementation Predictions at the individual level maximize results Information to multiple levels within an organization keeps everyone focused on the same goals

Predictions at the individual level maximize results

Information to multiple levels within an organization keeps everyone focused on the same goals

Pitfalls to Avoid One size fits all products or solutions Canned segmentation and profiles Implementations that are not well confined in terms of investment and time Beginning without a benchmark of success defined Go/no go decisions Implementing without an intervention plan of if/then

One size fits all products or solutions

Canned segmentation and profiles

Implementations that are not well confined in terms of investment and time

Beginning without a benchmark of success defined

Go/no go decisions

Implementing without an intervention plan of if/then

Conclusions Customer Value Management provides you the opportunity to value each customer appropriately in the right circumstances Achieving maximum results requires you to understand the optimum cross-section between quality and quantity Results are astounding in relation to traditional marketing approaches

Customer Value Management provides you the opportunity to value each customer appropriately in the right circumstances

Achieving maximum results requires you to understand the optimum cross-section between quality and quantity

Results are astounding in relation to traditional marketing approaches

About Adaptive Technologies, Inc. (ATi) ATi empowers business leaders to make better decisions. We provide each client with tailored business intelligence and advanced predictive analytics to drive business success. Our software-as-a-service solution turns your cross-enterprise data into actionable Intelligent Information. Business leaders choose ATi's advanced predictive analytics because we analyze data better, faster and more cost-effectively.

ATi empowers business leaders to make better decisions.

We provide each client with tailored business intelligence and advanced predictive analytics to drive business success.

Our software-as-a-service solution turns your cross-enterprise data into actionable Intelligent Information.

Business leaders choose ATi's advanced predictive analytics because we analyze data better, faster and more cost-effectively.

ATi empowers you to DECIDE. WITH CONFIDENCE. Adaptive Technologies, Inc. (ATi) 4530 East Shea Boulevard, Suite 130 Phoenix, Arizona 85028 602-923-4200 [email_address]