© copyright 2010 hewlett-packard development company, l.p. 1 swati saxena senior research manager...

Swati SaxenaSenior Research ManagerAugust 27 2010

RESEARCH AND ANALYTICS:AN SMB CASE STUDY AT HP

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

DISCUSSION OVERVIEW

– Business problem

– Analytical approach and process

– Insights to action

– Challenges

BUSINESS PROBLEM

•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

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

ANALYTICAL APPROACH

DETERMINE SCOPE

– Clearly define problem

– Internal client collaboration

– Analyze existing data

– Identify information gaps

– Design analytical approach

– Execute

Pan HP Strategy

EB IPG PSG

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

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

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

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

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

“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

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

RESEARCH INSIGHTS PROCESS

BusinessNeed

Decision Drivers

Opportunity

Need to Standardize

Robust portfolioRobust

portfolio

Ease of businessEase of

business

Addressing needs

HP share of wallet

Multi-brand customersMulti-brand customers

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

INSIGHTS TO ACTIONS

Migration Strategy

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

INTERNAL AUDIENCES USING DATA

MarketingMarketing

Product TeamsProduct Teams

SalesSalesServicesServices

Segment StrategySegment Strategy

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

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

© copyright 2010 hewlett-packard development company, l.p. 1 swati saxena senior research manager...

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