Increase customer acquisition and cross-             sell with Predictive Analytics                                       ...
Imagine If you could…       …adjust credit lines                                    …determine who is       …apply inferre...
Discussion agenda •    Introductions •    The business analytics imperative •    Live demo: predictive analytics with IBM ...
Discussion agenda •    Introductions •    The business analytics imperative •    Live demo: predictive analytics with IBM ...
Introductions – tell us about yourself                                                                               Pleas...
A bit about us    Beyond the Arc helps businesses improve           their customer’s experience through           analytic...
Discussion agenda •    Introductions •    The business analytics imperative •    Live demo: predictive analytics with IBM ...
What is Predictive Analytics?                                                                    Predictive Analytics help...
How can Predictive Analytics help?                                                                   • Predictive Analytic...
An information explosion … and faster decisions  are requiredVolume of Digital Data 57% CAGR for enterprise data through 2...
Challenges facing decision makers                                                                             1 in 3      ...
Analytics critical for driving competitive advantage    “At a time when companies in many industries offer     similar pro...
Predictive analytics: questions you can address                                                                           ...
Predictive Analytics can use ALL available data                        Interaction data                                   ...
Gartner discusses stages of analytics maturity                                                                            ...
Customer acquisition starts with mapping the stagesof the relationshipBeyond the Arc, Inc.    | Management Consulting & St...
Deeper insight about how customers interact with youis key               Life                                             ...
We often analyze specific customer actions by  lifecycle phase                                                            ...
The journey map helps ensure your acquisition and      cross-sell analytics lead to action                                ...
Discussion agenda •    Introductions •    The business analytics imperative •    Live demo: predictive analytics with IBM ...
Overview: cross-sell demo using IBM SPSS •    We analyzed simulated banking data* to see which       “customers” would be ...
Building a predictive model •    This process shows how a model might be built using data       about customers who respon...
Three types of customers: data-driven segments1.       Married people who do not have          our credit card2.       Sin...
Married people        who do not have        our credit cardSingle people who do not have our                             ...
Campaign results: acting on the insights •    A campaign manager might select likelihood values from 80       to 100, thus...
Discussion agenda •    Introductions •    The business analytics imperative •    Live demo: predictive analytics with IBM ...
Context is key to generating actionable insights      Define                         1. Define your objectives    Collect ...
Analytics won’t create value, unless you act on the insights… a few ideas to get you started•   Personalize offers based o...
Thank you                                                        Steven J. Ramirez, CEO                                   ...
Disclaimer and copyright This document was prepared by Beyond the Arc, Inc. This document provides our commentary and anal...
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Webinar: Increase Customer Acquisition and Cross-sell with Predictive Analytics

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Learn how to match the right offer with the right person, at the right time for more profitable results. Predictive analytics can take the guesswork out of multi-channel marketing.

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Webinar: Increase Customer Acquisition and Cross-sell with Predictive Analytics

  1. 1. Increase customer acquisition and cross- sell with Predictive Analytics Steven J. Ramirez, CEO Bruce Johnson, Technical Consultant Beyond the Arc, Inc. Beyond the Arc Monthly Webinar seriesBeyond the Arc, Inc.    | Management Consulting & Strategic Communications © 2012 Beyond the Arc, Inc.  November 15, 2012
  2. 2. Imagine If you could… …adjust credit lines …determine who is …apply inferred social as transactions are most likely to buy if relationships of occurring to account offered a discount at customers to prevent for risk fluctuations? time of sale? churn? Banker in the  Contact  Loan Officer branch Center banker  …optimize every transaction, process and decision at the point of impact, based on the current situation, without requiring that everyone be an analytics expertBeyond the Arc, Inc.    | Management Consulting & Strategic Communications 2
  3. 3. Discussion agenda • Introductions • The business analytics imperative • Live demo: predictive analytics with IBM SPSS • Next stepsBeyond the Arc, Inc.    | Management Consulting & Strategic Communications 3
  4. 4. Discussion agenda • Introductions • The business analytics imperative • Live demo: predictive analytics with IBM SPSS • Next stepsBeyond the Arc, Inc.    | Management Consulting & Strategic Communications 4
  5. 5. Introductions – tell us about yourself Please use  the webinar  chat function  What are you  to answer hoping to get out  of today’s  session?Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 5
  6. 6. A bit about us Beyond the Arc helps businesses improve  their customer’s experience through  analytics and insight, strategic consulting,   and innovative software solutions.6 Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 6
  7. 7. Discussion agenda • Introductions • The business analytics imperative • Live demo: predictive analytics with IBM SPSS • Next stepsBeyond the Arc, Inc.    | Management Consulting & Strategic Communications 7
  8. 8. What is Predictive Analytics? Predictive Analytics helps connect  data to effective action by drawing  reliable conclusions about current  conditions and future events –Gareth Herschel, Research Director,  Gartner GroupBeyond the Arc, Inc.    | Management Consulting & Strategic Communications 8
  9. 9. How can Predictive Analytics help? • Predictive Analytics is a transformational technology  that enables more proactive decision making, driving  new forms of competitive advantage • Analyzes patterns found in historical and current  transaction data as well as attitudinal survey data to  predict potential future outcomes • Unique insights that help answer key business  questions: • How do I reduce churn and retain the most loyal  customers to maximize profitability? • How can I detect and prevent fraudulent activity to reduce risk?  • Which factors are most likely to drive customers  to choose my product vs. the competitor’s? Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 9
  10. 10. An information explosion … and faster decisions are requiredVolume of Digital Data 57% CAGR for enterprise data through 2010 Machine generated data: Sensors, RFID, GPS.Variety of Information 80% of new data growth is unstructured content Emails, images, audio, video.Velocity of Decision Making Rapidly changing business climate Need to get ahead of the curve: predict issues and fix them. Business Imperative: Accelerate innovation, business optimization,  and sustained competitive differentiation Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 10
  11. 11. Challenges facing decision makers 1 in 3 frequently make critical decisions without the information they need 1 in 2 don’t have access to info across their org. needed to do their jobs 19+ hours Spent each week just searching for and understanding informationBeyond the Arc, Inc.    | Management Consulting & Strategic Communications 11
  12. 12. Analytics critical for driving competitive advantage “At a time when companies in many industries offer  similar products and use comparable technology, high­ performance business processes are among the last  remaining points of differentiation.” Tom Davenport,  “Competing on Analytics” Ten Most Important Visionary Plan Elements Interviewed CIOs could select as many as they wantedBI/Analytics #1 Business Intelligence and Analytics 80% 86%investment to  Virtualization 77% 76%improve  Risk Management and Compliance 70% 73%competitiveness Mobility Solutions 66% 71% 73% Customer and Partner Collaboration 64% Low IBM Global CIO Study 2009 71% growth Self-Service Portals 63% Application Harmonization 62% 67% High 70% growth Business Process Management 61% 68% SOA/Web Services 55% Source: IBM Global CIO Study 2009 63% n = 2345 Unified Communication 57% 12 Beyond the Arc, Inc.    | Management Consulting & Strategic Communications
  13. 13. Predictive analytics: questions you can address Strategic Questions • What products sell well together and what products are my  customers most likely to purchase? Sales &  • What campaigns and offers have the highest chance of  Marketing success and what types of customers should we be targeting? • Which CRM activities are more effective in leading to higher  sales opportunities? • How can we lower marketing costs without sacrificing  effectiveness or hampering sales? Finance • How accurate and reliable is our current forecast (and  targets) based on historical trends? • What defects occur in our credit card fulfillment process and  can we prevent the most frequent issues? Operations • Can we forecast our call center staffing levels based on the  expected response from marketing campaigns?Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 13
  14. 14. Predictive Analytics can use ALL available data Interaction data Attitudinal data - Email / chat transcripts - Opinions - Call center notes - Preferences - Web click-streams - Needs & desires - In person dialogues - Survey results - Social media Descriptive data Behavioral data - Attributes - Orders - Characteristics - Transactions - Self-declared info - Payment history - (Geo)demographics - Usage historyBeyond the Arc, Inc.    | Management Consulting & Strategic Communications 14
  15. 15. Gartner discusses stages of analytics maturity Where is  your  company?Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 15
  16. 16. Customer acquisition starts with mapping the stagesof the relationshipBeyond the Arc, Inc.    | Management Consulting & Strategic Communications 1616
  17. 17. Deeper insight about how customers interact with youis key Life  Customer Cycle Awareness Presales Quote, Sales AdvocacyEngaged ServiceParty Insurance Rep Agent Carrier Quote, Sales Customer Customer Processes Online Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 17
  18. 18. We often analyze specific customer actions by lifecycle phase Customer is sent survey  requesting feedback on  Quote/Sales process Customer is quoted possible  options, and selects one Insurance implements Capture customer needs, to  insights, conducts surveys ensure proper quote Customer purchases  measures impact, repeats home insurance Key customer actions during the “Quote, Sales” phase of the lifecycle Customer Awareness Presales Quote, Sales Advocacy Service Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 1818
  19. 19. The journey map helps ensure your acquisition and cross-sell analytics lead to action Key Performance Marketing list Predictors and recommendation Campaign ResultsSocial Media Data• Twitter• Discussion Forums• Blogs• … Marketing campaign processCustomer Data• Demographics Analyses Scoring• Channel Activity Predict who is likely to Rank best 3• Information Requests respond, based on clusters of offers• … similar customers that have purchased in the past Sales campaigns Capture Predict Act Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 19
  20. 20. Discussion agenda • Introductions • The business analytics imperative • Live demo: predictive analytics with IBM SPSS • Next stepsBeyond the Arc, Inc.    | Management Consulting & Strategic Communications 20
  21. 21. Overview: cross-sell demo using IBM SPSS • We analyzed simulated banking data* to see which  “customers” would be likely to accept an offer for a Home  Equity Line of Credit (HELOC). • “Customers” are people who have a mortgage with our bank. • Analysis was based on data about customers who had accepted  similar offers in the past. • We talked to our client about what theories they had  concerning offer acceptance, and captured as much data  measuring these issues as we could. (Journey mapping) • We used algorithms to look for patterns in the data. *This data is representative. Your data and findings will be different and more detailed.Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 21
  22. 22. Building a predictive model • This process shows how a model might be built using data  about customers who responded to a similar offer in the  past. • The model is “predictive” in the sense that we can pick out  which new (or future) customers are more likely to respond  favorably to the new offer.Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 22
  23. 23. Three types of customers: data-driven segments1. Married people who do not have  our credit card2. Single people who do not have  our credit card and who have  paid greater than 20% of their  mortgage loan Single3. People who have $2000 or less on  person in our credit card, who also come to  front of the branch (rather than banking  condo primarily online)The following slides show how we  Well-dresseddiscovered these segments in the  person in adata. bank branch 23 Beyond the Arc, Inc.    | Management Consulting & Strategic Communications
  24. 24. Married people  who do not have  our credit cardSingle people who do not have our  People who have $2000 or less on our credit card and who have paid  credit card, who also come to the branch greater than 20% of their loan (rather than banking primarily online) Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 26
  25. 25. Campaign results: acting on the insights • A campaign manager might select likelihood values from 80  to 100, thus taking the top 20% of prospects for the  campaign. • Or a campaign manager might target by segment. The  RuleID shows the segment.  ◦ It is the node number from the decision tree. • RuleID 7 is  Married people who do  not have our credit card • Custom campaigns using the segment information are sent. • Cross‐sell modeling typically performs at least twice as  good as mailing without using any targetingBeyond the Arc, Inc.    | Management Consulting & Strategic Communications 28
  26. 26. Discussion agenda • Introductions • The business analytics imperative • Live demo: predictive analytics with IBM SPSS • Next stepsBeyond the Arc, Inc.    | Management Consulting & Strategic Communications 29
  27. 27. Context is key to generating actionable insights  Define 1. Define your objectives Collect  2. Collect data sources and “listen”  Analyze 3. Analyze, translating to business processes Report 4. Report on the findings Improve 5. Improve based on insights revealedBeyond the Arc, Inc.    | Management Consulting & Strategic Communications 30
  28. 28. Analytics won’t create value, unless you act on the insights… a few ideas to get you started• Personalize offers based on model variables • Send regular emails to most likely to purchase • Re‐mail to people who didn’t respond but should have• Re‐mail based on web/mobile click‐through• Email those least likely to accept the offer less frequently, to  minimize opt‐outs and keep them in the campaign pool • Consider incentives for long‐tenured customers  acknowledging their ‘loyalty’ Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 31
  29. 29. Thank you Steven J. Ramirez, CEO Beyond the Arc, Inc. Office  1.877.676.3743  Email sramirez@beyondthearc.com Digital beyondthearc.com beyondthearc.com/blog @beyondthearc Facebook.com/beyondthearc Slideshare.net/beyondthearcBeyond the Arc, Inc.    | Management Consulting & Strategic Communications 32
  30. 30. Disclaimer and copyright This document was prepared by Beyond the Arc, Inc. This document provides our commentary and analysis. The information contained herein is  of a general nature and is not intended to address the circumstances of any particular  individual or entity.  Although we endeavor to provide accurate and timely information, there can be no guarantee  that such information is accurate as of the date it is received or that it will continue to be  accurate in the future. No one should act on such information without appropriate  professional advice after a thorough examination of the particular situation. No warranty  expressed or implied. This material may not be distributed. IBM, the IBM logo, ibm.com, SPSS are trademarks or registered trademarks of International  Business Machines Corporation in the United States, other countries, or both.  Other company, product, and service names may be trademarks or service marks of others.Beyond the Arc, Inc.    | Management Consulting & Strategic Communications 33

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