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Airline CRM big data opportunities
1. Berengueres
Opportunities in Etihad
miles program
Review of findings UAEU study on loyalty program data
February 2013
EB2013.02.28
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of Jose Berengueres is strictly prohibited
Jose Berengueres
2. Berengueres |
Abstract
Project Background โ CRM data from Etihad Airways was
analyzed. The data is three tables that comprise anonimized
information about passengers who enrolled the Etihad miles
program between 2006 and 2012. The tables contain data such
as: (1) Age and Nationality, etc. (2) Loyalty program purchases
etc. (Not used in this model) (3) Flight activity, miles earned etc.
The following pages explain what can be predicted by using the
data.
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3. Berengueres |
Predicting if a new customer will become silver (high value) or not can
help concentrate the (limited) CRM resources on high potential customers.
To do this effectively accuracy is needed.
Using extrapolation is 50 % accuracy in predictions. Using new data mining techniques 82% can be achieved.
Gold%
Silver%
Basic%
30k%
50k%
Accumulated%%
miles%
7me%
Tier%
?"
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4. Berengueres |
The D/S model can predict who will be high value with very high accuracy.
I am flying
Etihad for
first time!
D"days" S"days"
I can tell you if
she will become
Silver with 82%
accuracy
Silver"-er"
before""now"
I can tell you if
she will become
Silver with 50%
accuracy
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5. Berengueres |
Example of an application that enhances the value of miles program:
optimal real-time upgrade allocation
Passenger Name Tier Status
Probability they
will become Silver
in X months
Wolfgang Amadeus Motzart Basic 0.99
Ludvig Van Beetoven Basic 0.97
Giuseppe Verdi Basic 0.89
Jean-Michel Jarre Basic 0.77
Yasuharu Konishi Basic 0.77
Maki Nomiya Basic 0.45
Teresa Teng Basic 0.42
Carl Philip Emanuel Bach Basic 0.41
Enric Granados Basic 0.00
Leonard Bernstein Basic 0.00
Carl Loewe Basic 0.00
Johan Strauss Basic 0.00
Isaac Albeniz Basic 0.00
George Gerschwin Basic 0.00
John Lenon Basic 0.00
John Williams Basic 0.00
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6. Berengueres |
Evaluation of predictive power of D/S model (1/3)
Prediction*Model*with*3*months*of*data*&*lookout*1*months
Discovery*rate 82% of#future#Silver#where#identified#after#observ
False*Positive 3% 97%#of#predictions#are#correct#
Count*of*prediction prediction
Sivler*attain 0 1 Grand*Total
0 54752 37 54789
1 293 1309 1602
Grand*Total 55045 1346 56391
notes:#start#period#jul#1st#2012
of future Silver identified after observing them 3 months
97% of predictions are correct
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