© copyright 2010 hewlett-packard development company, l.p. 1 swati saxena senior research manager...
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© Copyright 2010 Hewlett-Packard Development Company, L.P. 1
Swati SaxenaSenior Research ManagerAugust 27 2010
RESEARCH AND ANALYTICS:AN SMB CASE STUDY AT HP
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USING CUSTOMER ANALYTICS– Business issue
• Penetrate a growing business segment• Root cause analysis of a problem
– Design analytics to leverage all the data sources available• Behavioral • Social media• Primary research
– Derive actionable insights• Sales, marketing, product development, etc. • Targeted marketing• Customized solutions
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DISCUSSION OVERVIEW
– Business problem
– Analytical approach and process
– Insights to action
– Challenges
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BUSINESS PROBLEM
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•SMB market has been growing •$500 billion market •Increasing share of IT spend
•Increase sales to this segment for HP’s products/services
WW SMB IT SPEND 2009, IDC
BUSINESS PROBLEM
SITUATION
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OBJECTIVES
• Develop insights and strategies to generate an increasingly larger share of revenues and product/service sales from our existing customer base
• Gain a deep understanding of our customers in this segment
• Apply business and behavioral knowledge to these insights
• Design the right growth strategy based on customer needs
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ANALYTICAL APPROACH
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DETERMINE SCOPE
– Clearly define problem
– Internal client collaboration
– Analyze existing data
– Identify information gaps
– Design analytical approach
– Execute
Pan HP Strategy
EB IPG PSG
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EVALUATE AVAILABLE CUSTOMER DATA
Social media
Not Solicited
[Communities, Blogs, Social Platforms [Face
book, MySpace] Twitter…
Behavioral data
[Sales, Support Data, Web analytics, …]
Insights Action
Surveys
(Solicited Feedback)
THROUGH
Secondary data
[Analyst reports, external studies]
Analyze Customer Data
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ANALYTICAL PROCESS
SMBInsights
A holistic approach to defining, identifying, and understanding, the SMB opportunity
“Business case”: Market Analysis• Analyst research • Internal business group research• HP opportunity
“Opportunity Identification” : Behavioral Analysis
• Data mining –SMB Install base• Product purchase analysis• Cross sell sensitivity analysis
“Understanding Behavior”: Primary Research• Customized online interactive survey• Behavior and needs assessment• Customer profiles
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MARKET ANALYSIS
•What is the size of the market?•What is the projected growth rate?•What is known about the segment?•What do they buy?•Who are the key competitors?
Market analysis involves understanding the customer segment and determining the market opportunity for HP
“Business Case”
SMBInsights
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BEHAVIORAL ANALYSIS
•How many SMB customers do we have in the relevant market?•Of these, how many are active?•What do they buy from us?•Who are the profitable customers?•What makes them profitable?•How much is our financial opportunity?
Behavioral analysis attempts to describe our customer base by aggregating our active customers and analyzing their business and financial attributes
“Opportunity Identification”
SMBInsights
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DATA CLEANING AND MINING
• Identified “active” customers that had at least one transaction in the last x fiscal quarters
Gain familiarity with the data and “clean” the data
Conduct iterations of analysis to determine how best to group the data
Create standard definitions of variables to be used in analysis
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“SWEET SPOT” OPPORTUNITY IDENTIFICATION
• Of these active customers only x% transacted with all three BU’s but they represent xx% of the revenue
IPG Only
EB Only
PSG + IPG
EB + PSG
EB + IPG
EB, PSG & IPG
PSG Only
% SMB Rev Contribution
% of SMB Companies
BU Combination
IPG Only
PSG + IPG
EB + PSG
EB + IPG
EB, PSG & IPG
PSG Only
% SMB Rev Contribution
% of SMB Companies
BU Combination
“Sweet Spot”“ ”
Our data mining analysis estimates a financial impact of $xxx million/yr incremental revenue if we motivate 1% of our active SMB’s in each BU combination
to purchase from an additional BU
Our data mining analysis estimates a financial impact of $xxx million/yr incremental revenue if we motivate 1% of our active SMB’s in each BU combination
to purchase from an additional BU
Analysis of our SMB customers revealed that xx% of customers buy from a single HP product family, generating lower average revenue relative to customers that purchase from multiple BUs
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PRIMARY RESEARCH
• Is there a desire among our SMB customers to standardize IT purchases primarily with one vendor, and if so, which segments of customers? •What impedes customers from buying a wider range of product and services from us? • Is there a financial opportunity for HP to move customers to the sweet spot?•What is the right strategy to take advantage of this opportunity?•What role can marketing play in influencing purchase decisions?
Primary research attempts to understand the patterns of behavior unearthed in the data mining effort
“Understanding behavior”
SMBInsights
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RESEARCH INSIGHTS PROCESS
BusinessNeed
BusinessNeed
Decision Drivers
Decision Drivers
Opportunity
Areas
Opportunity
Areas
Need to Standardize
Need to Standardize
Robust portfolioRobust
portfolio
Ease of businessEase of
business
Addressing needs
Addressing needs
HP share of wallet
HP share of wallet
Multi-brand customersMulti-brand customers
HP portfolio mix
HP portfolio mix
Our primary research findings are articulated using a three step inductive process organizing the findings into key drivers and opportunities that will be used to form our recommended strategy for migrating groups of SMBs into the sweet spot
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INSIGHTS TO ACTIONS
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INSIGHTS TO ACTIONS
Migration Strategy
Migration Strategy
Migration Tactics
Migration Tactics
By company size
By industry vertical
Marketing’s Influence
New HP Solutions
Using the insights we recommended strategies for migrating groups of SMBs into the sweet spot.
We also identified marketing tactics that can be used to migrate customers.
New customer solutions for this market segment were also identified
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INTERNAL AUDIENCES USING DATA
MarketingMarketing
Product TeamsProduct Teams
SalesSalesServicesServices
Segment StrategySegment Strategy
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BUSINESS IMPACT
– Helped define SMB sales strategy which has been deployed • Driving increased revenue and margin
– Influenced marketing strategy with a more pan-HP approach• Highest performing marketing vehicle
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CHALLENGES
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CHALLENGES
Availability and quality of the dataDataData
Gain Cross-BU consensus on business objectives
DecisionsDecisions
With the business groups
CredibilityCredibility
Designing relevant in-depth analysisInsightsInsights
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Q&A