customer analytics & segmentation for customer centric organization & marketing optimization
TRANSCRIPT
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CUSTOMER ANALYTICS & SEGMENTATION FOR CUSTOMER CENTRIC ORGANIZATION & MARKETING OPTIMIZATION
By Natthawan Apiratanapimolchai
Email: [email protected]
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CUSTOMER-CENTRIC
CUSTOMER INSIGHT
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CONSUMER CENTRIC ORGANIZATION
CUSTOMER FOCUS
Move beyond the service
Re-oriented and align entire operating
models to focus the customer
Increase customer satisfaction
Understand customer value and value
to their the customer
Carefully define and quantify customer
segmentation
Tailor business streams (product
development, marketing, sale, supply chain,
operation, customer care, etc.) to deliver
the greatest value to the best customer
at the least cost
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- Discrete transaction at a point in time
- Event-oriented marketing
- Narrow focus
- Customer life-cycle orientation
- Work with customer to solve both immediate and long-term issues
- Build customer understanding at each interaction
PRODUCT-FOCUSED vs. CUSTOMER-CENTRIC
1. CUSTOMER ORIENTATION
Tailor recommendation by past purchased and browsing behavior
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PRODUCT-FOCUSED vs. CUSTOMER-CENTRIC
2. SOLUTION MINDSET
- Narrow definition of customer value proposition
- Off-the-shelf products
- Top down design
- Broad definition of the customer value proposition
- Bundles that combine products, service and knowledge
- Bottom-up. Designed on the front line
Shift from “Selling product” to “Solve the problem”
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- Perceived as outsider selling in
- Push product
- Transactional relationship
- Individual to individual
- Working as an insider
- Solution focus
- Advisory relationship
- Team-based selling
PRODUCT-FOCUSED vs. CUSTOMER-CENTRIC
3. ADVICE ORIENTATION
Engage continuous dialogue with customers: Before-During-After purchase
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- Centrally driven
- Limited decision making power in the field
- Incentives based on product economics and individual performance
- Innovation and authority at the front line with the customer
- Incentive based on customer economics and team performance
PRODUCT-FOCUSED vs. CUSTOMER-CENTRIC
4. CAN-DO CUSTOMER INTERFACE
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- “ONE SIZE FIT ALL” processes
- Customization adds complexity. One-off work arounds
- Tailored business streams
- Balance between customization and complexity
- Complexity isolated within the system
PRODUCT-FOCUSED vs. CUSTOMER-CENTRIC
5. BUSINESS PROCESSES
- Rigid organizational boundaries
- Organizational silos control resources
- Limited trust across organizational boundaries
- Cross-organizational teaming
- Joint credit
- High degree of organizational trust
6. ORGANIZATIONAL LINKAGES AND METRICS
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CONSUMER INSIGHT IS VERY IMPROTANT
A deep “truth” about
the customer based on
their behavior,
experiences, beliefs,
needs or desires, that is
relevant to the task or
issue and “rings bells”
with target people
A customer-centric organization has customer insight and
orientation embedded throughout
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HOW TO KNOW CUSTOMER INSIGHT
Internal
Customer
Data
Behavior
Usage
Data
Research Social• Focus group
• Quantitative survey
• Segmentation study
• Interview
• Social research
• Mystery shopping
• Staff feedback
• Community web-board
• Social network e.g.
• Company website
• Demographic
• Psychographic
• Geographic
• Legacy system
• Touch-point system
• Billing system
• Complaint system
• Data warehouse
360 OF CUSTOMER INFORMATION
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Internal
Customer
Data
Behavior
Usage
Data
Research Social
HOW TO KNOW CUSTOMER INSIGHT
• Demographic
• Psychographic
• Geographic
DEMOGRAPHIC
SEX
INCOME
PSYCHOGRAPHIC GEOGRAPHIC
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HOW TO KNOW CUSTOMER INSIGHT
Internal
Customer
Data
Behavior
Usage
Data
Research Social
• Legacy system
• Touch-point system
• Billing system
• Complaint system
• Data warehouse
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HOW TO KNOW CUSTOMER INSIGHT
Internal
Customer
Data
Behavior
Usage
Data
Research Social• Focus group
• Quantitative survey
• Segmentation study
• Interview
• Social research
• Mystery shopping
• Staff feedback
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HOW TO KNOW CUSTOMER INSIGHT
Internal
Customer
Data
Behavior
Usage
Data
Research Social• Community web-board
• Social network e.g.
• Company website
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Product & Service
Sales
Branding
Portfolio
CONSUMER INSIGHT IS VERY IMPROTANT
Consumer Insight
• Differentiate
• Initiate the new one to serve
market segment
• Find hidden needs and make
improvements
•Identify the most & least
profitable customers
•Avoid unprofitable markets
•Increase brand loyalty and
decrease brand switching
•Create effectively fit your
consumers
•Find, understand and focus on
your best customers can make you
a market leader
•Target the right customer
• Improve the competitive positioning to be
more accurate and better differentiate
from the competition
• Reduce competition by narrowly defined
market and establishing a niche Market
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CONSUMER INSIGHT TO IMPROVE SALE
Background: Customers in each segments have the different needed on Insurance
Deliverable: Different offer
Different sale-talkDifferent POSM
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CONSUMER INSIGHT TO IMPROVE SALE
Savvy Insurers
Intelligent, Sophisticated risk-takers.
Fact finders who need to know things
for themselves, they buy their insurance through an agent
Profile: Financially savvy senior
managers who are also caring parent.
They buy all sorts of insurance to
ensure their family is well protected. 25-44 skew
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CONSUMER INSIGHT TO IMPROVE SALE
Casual Followers
Active, easy-going, and mature
individuals, who look after themselves.
They are less concerned about their look and are not brand-oriented
Profile: Health conscious white collar
workers. They buy Critical Illness
insurance on recommendation. Urban, white collar workers, 35+ skew
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CONSUMER INSIGHT TO IMPROVE SALE
Family Protectors
Family oriented, wise, confident and
mature. Their work (benefits) covers
them well but they still like to plan
ahead for their family. They are brand-
oriented and like eating out and shopping
Profile: High income, upper class
families. Life insurance secures the family’s future. 35+ skew
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CONSUMER INSIGHT TO IMPROVE SALE
Next Generation
Aspirational, optimistic, looking
forward to their life ahead: getting married and promotion
Profile: They are very open to
insurance but without a family to look
after they have not yet made the
transition from intention to purchase decision
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CONSUMER INSIGHT TO IMPROVE SALE
POSM is differently developed based on consumer insight who are looking for BANC ASSURANCE but different objective
Casual FollowersSavvy Insurers Next GenerationFamily Protectors
หาประกนั
เพิม่1หาประกนั
เพือ่ตวัเอง2หาประกนั
เพือ่ครอบครวั3หาประกนั
แรก4
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CONSUMER INSIGHT IS VERY IMPROTANT
Ability to transform their understanding of
their customer base. This Knowledge help us
to extract maximum benefit from customer
insight
DATABASE ANALYSIS
SEGMENTATION
DATA MINING & PREDICTIVE MODEL
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SEGMENTATION
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How to segment customer by social media data?MARKET SEGMENTATION
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DIFINE AND SUBDIVIDE
A LARGE HOMOGENOUS
MARKET INTO CLEARLY
IDENTIFIABLE SEGMENTS
HAVING SIMILAR
NEEDS WANTSDEMAND CHARACTERISTICS
WHAT IS MARKET SEGMENTATION?
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WHAT IS MARKET SEGMENTATION?
Market Segment is an identifiable
group of individuals, families,
businesses, or organizations,
sharing one or more characteristics
or needs in an otherwise
homogeneous market. Market
segments generally respond in a
predictable manner to a marketing
or promotion offer.
Clear Identification
Measurability
Accessibility Align with Strategy
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Develop new product
Differentiate the product
WHY IS SEGMENTATION NEEDED?
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SEGMENTATIONLIFE-STAGE
MARKET SEGMENTATION
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Example of Market Segmentation
SEGMENTATIONOCCUPATION
Military
Payroll
Owner Operator
Student
Government
MARKET SEGMENTATION
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Example of Market Segmentation
SEGMENTATION
SOCIAL-CLASS
MARKET SEGMENTATION
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Example of Market Segmentation
SEGMENTATIONBEHAVIOR
DEMOGRAPHIC
PSYCHOGRAPHIC
USAGE-TRANSACTION
GEOGRAPHIC
AGE GENDER
SEX
MARITAL STATUS
EDUCATIONINCOME
LIFESTYLE
PREFERENCE
PERSONALITY REGION
CITYNEIGHBORHOOD
VOLUME
RECENCY
FREQUENCY
CHANNEL
ATTITUDE
LOYALTY
MARKET SEGMENTATION
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A viable target segment should satisfy these requirements:
Go No-Go
HOW TO EVALUATE SEGMENT?
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DATA MINING &
PREDICTIVE MODELING
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TRENDS LEADING TO DATA FLOOD
WHAT IS DATA MINING?
MORE DATA IS GENERATED
MORE DATA IS CAPTURED
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DATA MINING HELPS EXTRACT
INFORMATION
WHAT IS DATA MINING?
Fraud detection
• Which types of transactions are likely to be fraudulent, given the demographics and transactional history of a particular customer?
Credit ratings/targeted marketing:
• Given a database of 100,000 names, which persons are the least likely to default on their credit cards?
• Identify likely responders to sales promotions
Customer relationship management:
• Which of my customers are likely to be the most loyal, and which are most likely to leave for a competitor?
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WHAT IS DATA MINING?
The process of analyzing
data from different
perspectives and
summarizing it into useful
information - information that
can be used to increase
revenue, cuts costs, or both.
The process of finding correlations or patterns
among dozens of fields in large
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DATA MINING PROCESS
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Modeling Process
Modeling
DATA MINING PROCESS
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DATA MINING TECHNIQUES
1. Prediction MethodsUse some variables to predict unknown
or future values of other variables
• Classification
• Regression
• Deviation Detection
From [Fayyad, et.al.] Advances in Knowledge Discovery and Data Mining, 1996
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WHAT IS DATA MINING?
2. Description MethodsDescription Methods
Find human-interpretable
patterns that describe the
data
• Clustering
• Association Rule
Discovery
• Sequential Pattern
Discovery
From [Fayyad, et.al.] Advances in Knowledge Discovery and Data Mining, 1996
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Business Objective:
Next Best Offer Product
Goal:
- Identify items that are bought next by historical purchasing
- Separate customer by customer segment
Example Result on Mid-Income Customer
• Transactional Deposit & Saving Deposit -> Bancassurance
• Transactional Deposit & Saving Deposit, Bancassurance -> Mutual Fund
• Transactional Deposit & Home Loan -> Credit Card
• Credit Card -> Personal Loan
MARKET BASKET ANALYSIS
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Business Objective/Industry:
X-selling Personal Loan
on Existing customer
Goal:
Define target customer who are high propensity to buy personal loan
Approach:
• Use “Regression” technique apply with 360 customer data
• We know which customers decided to buy and which decided otherwise.
This {buy, don’t buy} decision forms the class attribute
• Collect various demographic, lifestyle, and company-interaction related information
about all such customers e.g. transactional behavior, inflow/outflow/net-flow etc.
• Use this information as input attributes to learn a regression model
• Derive propensity to buy score
• Select only top score customer to proactively offer product
X-SELLING PERSONAL LOAN
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Business Objective/Industry:
Churn prediction in credit card
Goal:
Identify who likely to stop usage with us
Approach (Type of Data & Data Mining Technique):
• Apply “Classification” technique with credit card/payment transactions and the
information on its account-holder as attributes
• When does a customer stop usage and who are they?
• Label past transactions as a transactions. This forms the class attribute
• Learn a model for the class of the churn
• Use this model to detect high propensity to churn by observing credit card/payment
transactions on an account
• Proactively offer promotion on usage program to high value & high churn score
CHURN MODEL – TMB CREDIT CARD
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Business Objective/Industry:
Transactional behavior segmentation by Clustering
Goal:
Subdivide a transactional customer into distinct subsets of them where any subset
have the common transactional behavior
Approach (Type of Data & Data Mining Technique):
• Collect different attributes of customers based on their transactional behavior e.g. usage
channel, transaction type, ticket size etc.
• Find clusters of similar customers
• Measure the clustering quality by observing transactional patterns of customers in same
cluster vs. those from different clusters
BEHAVIOR SEGMENT BY CLUSTERING – TRANSACTION AL BEHAVIOR
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MUTUAL FUND WHO ARE LIKELY TO BUY MORE - RFM
Existing MF - Hi Fee
Existing MF - New to Hi Fee
Recent
More recent,
More likely to
buy again
Number of months since last purchase
any MF
Frequent
More frequent,
More likely to
respond this time
Counting the month of purchase
any MF
Monetary
More money spent,
More likely to
spend more
All amounts purchased any MF
in 12 months
Concept
กลุม่เป้าหมาย
ในการศกึษา Concept
ชว่งเวลาในการศกึษาชว่งเวลาการ
กลับมาซือ้เพิม่ ชว่งเวลาทีศ่กึษาพฤตกิรรมของลกูคา้
12 เดอืนกอ่นหนา้
เหมาะกบัการหาโอกาสการซือ้เพิม่
(Up-selling)
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46
DATA MINING & BIG DATA ANALYTICS (CLIP)
https://www.youtube.com/watch?v=f2Kji24833Y
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DELIVER SEGMENTATION
THRU DIRECT MARKETING
CAMPAIGN
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To individually offer customers with the product/service that matched
to their needs by delivering the right offer by the right
message/channel to the right person at the right time
• Maintain quality customer to stay with us longer and win-back if they left
• Increase their wallet-size on target customer
• X-selling more product to increase share of wallet
• Direct to prospect target who are in selective segment
Acquisition X-selling
Retention
Up-Selling/
Deep-Selling
WHAT IS DIRECT MARKETING?
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Customer Product ChannelRight Target Right Offer
Time
Right Communication
5 key elements to deliver direct marketing campaign
HOW TO DELIVER DIRECT MARKETING CAMPAIGN
Right Time
Right Channel
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Affluent
Mid-Income
Mass
1. Segmentation
2. Targeting Propensity to buy score for
select top target
3. Positioning
Channel:
EXAMPLE OF DIRECT MARKETING CAMPAIGN
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: EXAMPLE OF DIRECT MARKETING CAMPAIGN
X-sell BA Health on Credit Card Spending Based
Segment: Mid-Income
Target: Who have credit card spending
on Health, Medical and Hospital
Positioning:
- Offer: Health Insurance
- Promotion: Buy 1 year free 1 month
- Channel: Call + SMS
- Time: After credit card spending
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EXAMPLE OF DIRECT MARKETING CAMPAIGN
X-sell Homeloan Refinance by using Internal data
Ever
submit HL > 3 years
Credit Card
spending in Home&Decore
category
Segment: Mid-Income
Target: Who ever submit
HomeLoan > 3years or have
credit card spending on
Home&Decore category
Positioning:
- Offer: Home Refinance
- Promotion: Special rate
- Channel: Direct Mail
- Time: Money Expo
Season
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95%
84%
50%
12.5%
Success rate = 5%(on total lead)
Contact
Control1
Success rate = 5%(on total lead)
Success rate = 1%(on total lead)
Success rate = 3%(on total lead)
Control2
4%
2%
%Uplift Same profile not contact
Different Profile not contact
HOW TO MEASURE THE EFFECTIVENESS OF DIRECT MARKETING CAMPAIGN
REACH: LEAD UTILIZATION, LEAD QUALITY
RIGHT: #,% SUCCESS (PURCHASE) ON TOTAL LEAD, %UPLIFT
VOLUME: REVENUE PER CASE
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Collect:
Transactional data of 50 million consumers
(about 70 petabytes)
Analyze:
Raise the bar from sampling-analysis to the
full customer set by using Big Data technology
To understand the customer across all
channels and interactions
Propensity to buy model
Utilize:
To appeal offers to well-defined customer
segments
Apply to ‘BankAmeriDeals’ program which
provides cash-back offers based on where the
customers have made payments in the past
The largest bank in US
BIG DATA ANALYTICS CASE STUDY – BANKING & FINANCIAL SERVICE
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Collect:
9 millions transactions per day (40% of card
transactions in Australia)
12 million account profiles
Analyze:
Real-time analytics scheme (In-memory
computing)
Utilize:
Create better products and services; which
help:
oProviding more personalized service to
customers both in person and online
oRight pricing for an individual customer
Reduce Cheque Fraud by 50% and Internet
Fraud by 80%
BIG DATA ANALYTICS CASE STUDY – BANKING & FINANCIAL SERVICE
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Collect:
Customer Basic Profiles
Their services used
Their business
Market Trend
Analyze:
The appropriate financial advice for
each customers
Utilize:
Less frequent that customers have to
meet-up with the financial advisor
To ensure that we offer the right
product to wealth customers
Faster and more personalized
recommendations
BIG DATA ANALYTICS CASE STUDY – BANKING & FINANCIAL SERVICE
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Collect:
Australian Bureau of Statistics Census data
Ubank customers’ transaction records
NAB customers transaction records
Additional input by users to perform a “financial
health check” (such as gender, age, income, living
situation, post code, rent or own their home)
Analyze:
Average spending habits of people in that
demographic (such as monthly shopping, housing,
communication costs)
Utilize:
[PeopleLikeU] application (which is not survey-
based, but it’s real transactional data) to compare
and benchmark the spending habits of different
types of people
BIG DATA ANALYTICS CASE STUDY – BANKING & FINANCIAL SERVICE
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RETAIL IN 2020
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• www.strategyand.pwc.com
• http://www.businessdictionary.com
• http://blog.qmee.com
• From [Fayyad, et.al.] Advances in Knowledge Discovery and Data Mining, 1996
60
REFERENCE