Customer Insight and Prediction for B2B Marketing 22nd November 2013 - PowerPoint PPT Presentation

Customer Insight and Prediction for B2B Marketing 22nd November 2013 www.sv-europe.com A SELECT INTERNATIONAL COMPANY

Agenda • Arrival, registration and coffee • Introduction: what is predictive analytics and is it realistic for you? • Typical predictive analytics applications: where is it being used, for what and with what results? • Break • Analytics in action: Roger Watson – Chubb Fire and Security • Technology overview: demonstration of tools and techniques • Getting started: what to consider and how to begin • Close and Lunch A SELECT INTERNATIONAL COMPANY

Aims and Objectives • Introduce Smart Vision, IBM and predictive analytics • Share practical approaches to using advanced analytics for improved business to business marketing and customer management • Encourage discussion and debate with us and within the group • De-bunk some myths and set expectations • Suggest practical approaches for getting started A SELECT INTERNATIONAL COMPANY

About Smart Vision… • Premier IBM Partner • Accredited Support Providing Partner for SPSS • Specialist in SPSS analytical products and BI – Currently resourcing the IBM SPSS public training schedule • Staffed by former SPSS employees – Former UK General Manager – Former SPSS Brand Leader, EMEA – Former UK Head of Professional Services – Senior Professional Services Specialists • Experience in advanced analytics – B2B, retail, telecommunications, leisure and hospitality, financial services, publishing, utilities … A SELECT INTERNATIONAL COMPANY

http://www-01.ibm.com/software/data/2012-conference/awards.html A SELECT INTERNATIONAL COMPANY

Projects in the last 12 months…. A SELECT INTERNATIONAL COMPANY

What is predictive analytics? Predictive analytics helps connect data to effective action by drawing reliable conclusions about current conditions and future events. — Gareth Herschel, Research Director, Gartner Group A SELECT INTERNATIONAL COMPANY

Core capabilities driven by advanced predictive analytics Sentiment Interaction attract Feedback/Surveys When? Social Media How frequent? No. contacts? Feedback? grow risk Descriptive Behavioural Offers? SIC, Credit Rating, Payment history? Employees, T/O, retain How often? EBIT... How long? What value? A SELECT INTERNATIONAL COMPANY

Types of predictive modelling Identify groups within a Predict a population particular type displaying of outcome homogeneity Propensity/ (based on a wide Clustering Classification array of data) Association Time Series Identify Forecast a / Sequence repeatable future value patterns of over a defined behaviour or time period sequence A SELECT INTERNATIONAL COMPANY

Types of predictive modelling • Classification / Propensity – What customer account is most likely to respond / convert / cancel based on historical response data and the array of behavioural data we have about them? • Clustering – How can I divide my account base into meaningful and usable groups as a framework for marketing communications? By value, by service or product portfolio • Association and Sequence – What is the optimal sequence and frequency of events and interventions that lead to a one off purchase from a company becoming a high value account? • Time Series – What will product demand be next month / quarter / year? • Optimise product sourcing decisions • Identify pricing errors during product lifecycle • Predict end of life products in time to divest stock held A SELECT INTERNATIONAL COMPANY

Is it practical for your business? • Do you need to be statistically trained? – No… – Appropriate skills can be transferred and learnt – Business understanding is just as important as technical skill – Analytical skills can be taught • Data readiness? – You need some data, certainly… – Does not need to be organised into a tidy single supporter view – Data is often [always] fragmented and disparate (occupational hazard) A SELECT INTERNATIONAL COMPANY

Is it practical for your business? • How do we get started? – You can start small and develop in phases – Demonstrate initial ROI before releasing further investment – Plan your first projects using a recognised analytical methodology • Cost to get started? – Approximate, minimum investment £20 – 30k • Key analytical tools implemented – Data access, management and manipulation – exploratory analysis, profiling and modelling capabilities • Skills transfer and knowledge to continue independently • First project (s) completed • Actionable results, deployed in the business A SELECT INTERNATIONAL COMPANY

Typical predictive analytics John McConnell - Services www.sv-europe.com A SELECT INTERNATIONAL COMPANY

Interest in predictive analytics ‘Predictive Analytics’ ‘Business Intelligence’ A SELECT INTERNATIONAL COMPANY

So who uses predictive analytics? • Commercial Sector A SELECT INTERNATIONAL COMPANY

So who uses predictive analytics? • Not-for-profit sector A SELECT INTERNATIONAL COMPANY

Predictive customer analytics: dr iving actionable insight Acquire customers: • Understand who your best customers are • Connect with them in the right ways • Take the best action maximize what you sell to them Grow customers: • Understand the best mix of things needed by your customers and channels • Maximize the revenue received from your customers and channels • Take the best action every time to interact Retain customers: • Understand what makes your customers leave and what makes them stay • Keep your best customers happy • Take action to prevent them from leaving A SELECT INTERNATIONAL COMPANY

Predictive operational analytics: d riving operational efficiency Manage operations: • Maximize the usage of your assets • Identify the impact of investment • Ensure inventory and resources are in the right place at the right time Maintain infrastructure: • Understand what causes failure in your assets • Maximize uptime of assets • Reduce costs of upkeep Maximize capital efficiency: • Improve the efficiency and effectiveness of your assets • Reduce operational costs • Drive operational excellence in all phases: procurement, availability and distribution A SELECT INTERNATIONAL COMPANY

Predictive threat and fraud analytics: d riving mitigation and prevention Monitor environments: • Identify leaks • Increase compliance • Leverage insights in critical business functions Detect suspicious activity: • Identify fraudulent patterns • Reduce false positives • Identity collusive and fraudulent merchants and employees • Identify unanticipated transaction patterns Control outcomes: • Take action in real-time to prevent abuse • Reduce Claims Handling Time • Alert clients of transaction fraud A SELECT INTERNATIONAL COMPANY

Typical Application Aims Minimise Defaults Lower Cost of Acquisition Prevent Fraud Cross Sell Profit Prevent Waste Up Sell Maintain Availability Maximise Lifetime Value Maximise Loyalty Acquire More Customers Market Address Poor Satisfaction Build a Reputable Brand Share Anticipate Demand Lower Churn Rates Maximise Satisfaction Reactivate Customers Grow Defend A SELECT INTERNATIONAL COMPANY

Typical predictive analytics applications • Segmentation • Predictive modelling • Other applications – Marketing Response – Cluster Analysis – Basket Analysis – Customer Acquisition – Life Time Value – Forecasting – Cross-Sell/Up-Sell – Loyalty – Sentiment Analysis – Customer Retention – Store Clusters – Anomaly – Asset Failure Detection – Fraud Detection – Satisfaction Modelling A SELECT INTERNATIONAL COMPANY

What sorts of people use predictive analytics? • • Marketing Managers/Analysts Assortment Managers • • Fraud Officers Credit Risk Officers • • Insight Directors CRM Analysts • • Segmentation Strategists Information Service Managers • • Asset Risk Managers Heads of MI • • Data Scientists Data Mining Consultants • • Market Researchers Head of Supporter Relationships The most effective instigators of predictive analytics are very often data-literate, business-focused people A SELECT INTERNATIONAL COMPANY

Brammer • Leading distributor reduces cost of carrying surplus stock and improves customer service • Applications and Benefits – IBM/SPSS predictive analytics helped Brammer to manage its inventory more efficiently, significantly reducing the need to carry surplus stock, resulting in a total inventory reduction of £31.1 million in one year – Inventory turnover improved from 3.2 times at the end of 2008, to 3.7 times at the end of the first half of 2009 – Greater understanding of patterns and trends in customer purchasing data helps Brammer forecast marginal stock products more accurately and improve customer satisfaction by making a wider product range available for immediate dispatch – Detailed insight into inventory requirements has helped Brammer d evelop closer relationships with strategic suppliers leading to further cost benefits A SELECT INTERNATIONAL COMPANY