ibm next best action - finance · ibm next best action tony hocevar business analytics growth...
TRANSCRIPT
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IBM Next Best Action
Tony HocevarBusiness Analytics Growth Markets
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Agenda
• Introduction to Next Best Action• Demonstration• Questions
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“Data is the new oil”Ann Winblad
Hummer-Winblad
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The CMO’s Dilemma: Analyze Effectively or Drown
Global Chief Marketing Officer StudyIBM Institute for Business Value
2011
73% of CEOs identify customer insights as the most critical investment area
Global Chief Executive Officer StudyIBM Institute for Business Value
2012
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As the voice of the customer in the C-suite and an officer of the company, the CMO has the responsibility and, increasingly, the credibility to lead a customer-obsessed transformation of the business strategy.
Global Evolved CMO Online Survey
Q3 2011 Forrester/Heidrick & StrugglesForrester Research Inc.
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Seeing Customers as Individuals Video
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Understanding Each Customer as an Individual
Collect
Interconnect
Analyze
Predict
Act
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“Unless a decision has degenerated into work it is
not a decision; it is at best a good intention.
The Effective Executive, 1967by Peter Drucker
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I have an offer…Who wants to buy?
let me find a customer to sell to
Direct Mail
F2F
Online, Email
Kiosk
Mobile, SMS
Product AProduct AOfferOfferOfferOffer
OfferOffer
OfferOfferOfferOffer
OfferOffer
Product BProduct BOfferOfferOfferOffer
OfferOffer
OfferOfferOfferOffer
OfferOffer
Product CProduct COfferOfferOfferOffer
OfferOffer
OfferOfferOfferOffer
OfferOffer
Product DProduct DOfferOfferOfferOffer
OfferOffer
OfferOfferOfferOffer
OfferOffer
Agent, IVR
The Old Marketing Approach
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let me find a customer to sell to
Online, Email
Mobile, SMS
Product AProduct A
Product BProduct B
Product CProduct C
Product DProduct D
Agent, IVR
I have a customer…What do they need most?
The Next Best Action Approach
Brilliant!Customer
Analytics
Customer
Analytics
Governance,
Prioritization &
Optimization
Governance,
Prioritization &
Optimization
servi
ce
offer
inform
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• Customer
Accounts
• Channels
• Customer
Support
• Marketin
g
Buying
Patterns
Recent
Issues
Financial
Profile
Interactio
n Profile
Next Best Action aligns all channels
Next Best ActionNext Best Action
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Call Center Agent
Business
Analyst
Next Best Action
Marketing
Support
Offers ListData
Miner
Customer Data Insights
IBM Next Best Action
NEXT BEST
ACTION
Build relationships, one interaction, one decision at a time
Cross-channel delivery of best
actionReal-time
Comprehensive view of a customer
•Improve customer satisfaction
•Optimize revenue•Increase lifetime value
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Call Center Agent
Data
Miner
Business
Analyst
Marketing
Support
IBM Next Best Action Demonstration
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Dashboard visually shows customer situation
At Risk Valuable Influential
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Real-time sentiment analysis feeds dashboard
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Action tab recommends action
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Dashboard reflects higher customer sat
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Behind the Scenes
Data Miner
(insights & predictions)
Marketing
(multiple
offers)
Business Analyst
(optimized
next best action)
Support
(multiple
offers)
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Call Center Agent
Data
Miner
Business
Analyst
Marketing
Support
IBM Next Best Action Demonstration
Offers List
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Offers are aligned with segments
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Campaign includes automated nurturing actions
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Case Study
Business Challenge
• Suspects it is wasting money on direct marketing campaigns
• Focusing on products rather than customer knowledge and behavior
• Abundance of data but not using it
Solution• Combine customer segment data with
real P&L data to optimize its marketing spend to focus on programs that deliver the highest return on investment (ROI)
• IBM SPSS and Unica
Outcome
• Increased marketing response rates by 3.1% by more accurately targeting offers to high-value customer segments
• Achieved a 20% reduction in mailing costs and a 17% reduction in printing costs due to the ability to target the most attractive segment for specific offers
• Tennessee’s oldest and largest bank• 5,500 employees• 180 bank locations
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Call Center Agent
Data
Miner
Business
Analyst
Marketing
Support
IBM Next Best Action Demonstration
• Offer Response Propensity• Customer Churn Risk• Customer Lifetime Value
Offers List
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• Johnny's mother had 3 children. • The first child was named April; • The second child was named May. • What was the third child's name?
Source: Forbes, 10 brainteasers to test your mental sharpness, Holly Green
Quick Quiz
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Find Patterns… Using Powerful Tools
Segmentation
Age +Income +
GeographyPreferred Product
CategoriesPreferred Channel
Participation in Loyalty Program
Use of In-House Credit
Card
Use of Service
Programs
Return / Exchange Behavior
Breadth of Categories Shopped
Length of Time as
Customer
Recency + Frequency +
Value
Response to Media
Time until Repurchase in Key Categories
Annual Spend Level
Annual Transactions
Econometric: Real-estate &
Unemployment
Most segmentation approaches only focus on attributes such as
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Find Patterns… Using Powerful Tools
Association
Identify what events occur
together
Social Network Analysis
Anomaly DetectionSegmentation
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Real-time sentiment analysis feeds dashboard
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What is Text Analytics?
•Puts text into categories to impose structure:
positive, neutral, negative
What are the benefits?•Makes unstructured text “quantifiable”•Can now be mined
STRUCTUREDUNSTRUCTURED
Structure the unstructured: Text Analytics
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Modeler interface showing churn propensity calculation
Churn Propensity
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Business Challenge
• Protect existing revenue by reducing customer churn
• Improve client service without substantially increasing headcount
Solution
• Use data mining to identify at-risk customers• Provide insights to client services agents to
focus their proactive outbound “health check”calls
• IBM SPSS
Outcome• Reduced customer churn from 1.9% to
1.4% in the first year• Decreased the number of client services
agents needed for same level of contact• Build analytics competence within an in-
house team to quickly extend predictive analytics to new business areas
Case Study
• Communications provider in USA
• Employs >4,000• Revenues >$1.5B
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Call Center Agent
Data
Miner
Business
Analyst
Marketing
Support
IBM Next Best Action Demonstration
Next Best Action
• Offer Response Propensity• Customer Churn Risk• Customer Lifetime Value
Offers List
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Quick Quiz: What do we know about a shopper if they buy the items below?
• Cotton balls• Hand sanitizers• Washcloths• Unscented lotion• Big purse• Zinc supplements• Calcium, magnesium supplements
87% chance of pregnancy
Kashmir Hill, Forbes, 2/16/2012
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Drive Real-time Decisions at the Point of Interactio n
Optimized decisions
+ +Business
rulesOptimization Predictive
analytics
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Decision models add rules and span depts
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Optimization equation finds the “best” offer
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Case Study
Business Challenge
• Agents had to investigate all claims, both high-and low-risk
• All claims took a minimum of three days to settle
• Santam began to feel its good reputation for customer service suffer in the age where customers demand fast results
Solution
• A solution that more effectively assessed risk • Separated potentially fraudulent claims from
lower risk ones in real-time• SPSS Decision Management
Outcome
• Reduced processing time by 90% for lowest-risk claims
• Saved more than US $2.5 million through early fraud detection and prevention in the first six months • The largest short-term
insurance company in South Africa
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Call Center Agent
Business
Analyst
Next Best Action
Marketing
Support
Offers ListData
Miner
Customer Data Insights
IBM Next Best Action
NEXT BEST
ACTION
Build relationships, one interaction, one decision at a time
Cross-channel delivery of best
actionReal-time
Comprehensive view of a customer
•Improve customer satisfaction
•Optimize revenue•Increase lifetime value
![Page 38: IBM Next Best Action - Finance · IBM Next Best Action Tony Hocevar Business Analytics Growth Markets. ... Source: Forbes, 10 brainteasers to test your mental sharpness, Holly Green](https://reader031.vdocuments.us/reader031/viewer/2022022008/5adce7867f8b9a9d4d8c686b/html5/thumbnails/38.jpg)
Next Best Action Logical Architecture
Master Information and System of Record
Updates, Actions + Outcomes
UpdateSandbox
Real-time Decisions
Action +Outcome Deploy
DecisionModel
AdditionalInformation
Capturing Customer's Activity Analytics Management
Deploy Decision Models
Usage
Trigger
ExecuteAction
Internet
Sensorsproducingreadings
Social MediaServices
CustomerConversations
SharedStaging Area
Files
CUSTOMER
ACTIVITY
CUSTOMER
MASTER
PRODUCT
MASTER
INFORMATION
WAREHOUSESANDBOX
Reporting
DataMiner
DecisionManagement
Workbench
DecisionModel
BusinessAnalyst
1000101010001000101010001
?
AutomatedChannel
Customer Channels
HumanOperatedChannel
Outcomes
Action
Context DECISIONENGINE
MARKETINGPLATFORM
Trigger
ENTERPRISE SERVICE BUS (ESB)
Process
Process
Process
Process
APPLICATIONSCEP
DECISIONENGINE
For thorough review read the IBM Red Guide:Smarter Analytics: Driving Customer Interactions with the IBM Next Best Action Solution
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Let’s Make a Trade Video
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