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Powershop Life Time Value and Segmentation Presentation
- 1. LOVING YOUR CUSTOMERS, BY UNDERSTANDING THEM BETTER SAS NZ Conference 18 February 2014
- 2. CHRIS PROUT SHANE GIBSON POWERSHOP OPTIMALBI CUSTOMER INSIGHT MANAGER MAKES CUSTOMERS HAPPY
- 3. QUESTION 1 : ARE WE MAKING OR LOSING MONEY ON A CUSTOMER QUESTION 2: IF WE ARE LOSING MONEY WHAT BEHAVIOR DO WE NEED TO CHANGE TO MAKE MONEY
- 4. A STORY OF LIFE TIME VALUE CUSTOMER SEGMENTATION AND HOW IT WAS DELIVERED
- 5. MAKE DATA ACCESSIBLE MAKE THE DATA TELL A STORY MAKE THE STORY VISIBLE
- 6. ABOUT POWERSHOP AND THEIR DATA
- 7. SEGMENTATION LIFETIME VALUE BUILDING BLOCKS
- 8. DESCRIBING A CUSTOMER VISUAL SEGMENTATION VISUAL DISCOVERY
- 14. USING SAS TO CREATE THE STORY
- 15. ENTERPRISE GUIDE HARNESS THE WEALTH OF UNIQUE CUSTOMER BEHAVIOR DATA
- 16. ENTERPRISE MINER / RPM LIFE TIME VALUE AND SEGMENTATION MODELS IDENTIFYING CUSTOMER BEHAVIOR
- 17. VISUAL ANALYTICS / INFOGRAPHIC SHOW RESULTS OF THE MODELS VISUALLY
- 20. LIFETIME VALUE HISTORICAL VALUE FUTURE VALUE 250 200 150 VALUE 100 50 0 2010 2011 2012 -50 -100 -150 LIFETIME VALUE 2013 2014
- 21. SAME CALCULATIONS = DIFFERENT ANSWERS COST TO SERVE CALCULATION
- 22. The annual average monthly Cost To Serve: • Customer $950/month • Consumer $970/month
- 23. SAME CALCULATIONS DIFFERENT ANSWERS BEHAVIOR Segmentation was done at a customer level. This allowed us to use behavioural demographics to characterise the segments. CALCULATED VARIABLES All other variables have been calculated for both consumer and customer. THE POWER OF SAS SAS allowed us to calculate at both levels and pick one as our business default
- 26. SEGMENTATION
- 29. CHURN DRIVERS
- 31. WE ONLY FOCUSED ON THE TOP CHURN DRIVERS
- 34. RESIDENTIAL customer Relatively HIGH cost to serve LOW user generating HIGH revenue LOYAL Powershop brand HIGHLY engaged Purchaser HIGH number of specials Pays the HIGHEST unit price
- 37. POWERSHOP HAS A UNIQUE CULTURE
- 40. POWERSHOP MOVE FAST & NEED TO PROVE VALUE FAST
- 41. SAS VISUAL ANALYTICS FAST Deployed in the Amazon cloud, up and running in days rather than weeks or months VALUE Small monthly costs rather than massive upfront costs PROVE IT If SAS Visual Analytics doesn’t deliver value, it can be turned off easily
- 42. POWERSHOP DON’T LIKE LOCK-IN
- 43. NO BLACK BOXES TRANSPARENT MODELS SAS EM, RPM and EG were used to provide visible and self documenting code. No black box base SAS code was harmed in the delivery of this project. TRANSPARENT DELIVERY Powershop got all the EM/RPM projects, EG projects, SAS code and documentation so they could run it themselves. They only call us when we can add more value. MENTORING Personalised onsite mentoring after the project was delivered. Ensured Powershop got up-to speed gradually and as needed.
- 45. START SMALL, DELIVER QUICK, SHOW THE VALUE