How can Analytics Drive Customer Values?

How can Analytics Drive
Customer Values?
Franklin So
Regional Analytic Practice, SAS AP
June 28, 2011

Copyright © 2010 SAS Institute Inc. All rights reserved.

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Copyright © 2010, SAS Institute Inc. All rights reserved.

My new iPhone 4… FREE!!!

Guess from whom????

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1 week later

She moved to another telco
operator in early June...

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SORRY THIS ATM IS
TEMPORARY
OUT FO CASH

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Unfortunately there was long
queue in the bank

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Leave my comments in Facebook
for these promotion offer…

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 =

All these involved Analytics …

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Analytics to manage
CHURN customers

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Churn Scores for prediction…

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Social network for viral marketing

Linking individuals and measuring the
strength of their relationships.

•Identify communities based on behavioral
relationships between customers

•Measure and segment customers based on
social influence (e.g. “leaders”, “followers”,
“marginals” and “outliers”)

•Target customers based on community
status and behavioral changes within
communities (e.g. when a community
“leader” changes, target his/her “followers”)

Leader

Follower
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SORRY THIS ATM IS
TEMPORARY
OUT FO CASH

Analytics to forecast demand
e.g. cash demand in ATM machines

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ATM Replenishment Forecasting and Optimization
SAS Forecast Server

SAS/OR

Bank ATM system transaction log
Demand Forecasting for each ATM

SAS BI

Optimization of
the Replenish
schedule by
denominations

Executive report on ATM
Replenishment Status and
Manual Overrides 15


Business Forecasting and scenario (“What-if analysis”)…

Red line represents the
forecast of transactions
of the ATM.

White dots represent
the history of ATM
transaction.

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Optimized replenishment schedule tells you which ATM to replenish at what time

• Reduced ATM down-time due to cash out
• Optimized no. of ATM replenishment trips
• Improved operational efficiency of maintaining
ATM Network
• Increase customer satisfaction for reducing
the cash out events

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Simulate the operational process and time required
for queuing the teller…
How many queues are required?
One queue for one teller or one single queue for all
tellers

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1 Copyright © 2010, SAS Institute Inc. All rights reserved.

Analytics to identify customer strategy
who to sell what, on when, and how…

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Who should be targeted on what, when, and what’s
NEXT…

Deposits Bank
Knows savings
balance and some
demographic details

Credit Card
Knows income
, purchasing & payment
behavior

Insurance
Life stage and some
Customer asset and liability
details

Investments
Knows investments

Channels 20


Segmenting customer based on behavioral attributes results in segments which are:
 Identifiable – customer behavioral data are much richer.
 Actionable – behavioral attributes tell us more about the needs of a customer.

relationship product holdings
customer tenure, number of what products does the customer
accounts/products, recency of have with the bank?
account, branch, etc.

financials
transaction pattern Customer
average, trend, variance,
what type of transactions, how often, etc. for balances,
amount per transactions, etc. interest, fees, etc.

channel
preference & usage

what channels does the
customer own, access and
how often, etc.

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Customer Value

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Loyalty Score


Acquisition
Retention & Retention
Customer Value

Cross
selling

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Loyalty Score


Analytics to identify
the NEXT BEST and Optimize Offers

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Personalize Offer Optimization

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Towards Offer Optimization

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And finally Offer Optimization

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Analytics to analyze Social Media
and Unstructured Data

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WHAT’s Important to
Overall Brand Your Business
What’s the
►Service, Price, Network
Sentiment?
Topics Relevant to Your Organization Performance, Marketing Program

Media Types WHERE You’re Being Talked
About
Positive Negative
• Internal: Portal, Call Centre
Neutral
Media Sources
External:

What’s the
Bloggers
Bloggers WHO’s Talking about You and What Value?
They’re Saying
i.e. Harvey West ► the top Twitter influencer
Commentary
with 300,000 followers

….What’s the Trend…. Time….

Historical Forecasted Future
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HP Confidential. Commercially sensitive. Distribution prohibited.

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Statistical Process Control
Analysis of Variance Categorical Data Analysis
Social Network Analysis
Spectral Analysis

Statistical Analysis
R Integration
Process Capability Analysis
Forecasting Scheduling
Reliability Analysis

Nonlinear Programming
Design of Experiments
Cluster Analysis Sentiment Analysis Linear Programming

Data Visualization
Network Flow Models
Predictive Modeling

Econometrics
Vector Autoregressive Models

Discrete Event Simulation
Exploratory Data Analysis Mixed-Integer Programming Sample Size Computations

Nonparametric Analysis
Interactive Matrix Programming ARIMA Models
Matrix Programming
X11 & X12 Models

Neural Networks
Scoring Acceleration
Ensemble Models
Bayesian
Data Mining Survival Analysis D-Optimal

High Performance Forecasting
Text Analytics
Decision Trees

SAS leads advanced analytics market by wide margin (IDC, June 2011) Psychometric Analysis Information Theory

Statistics
Descriptive Modeling Mixed Models Multivariate Analysis

Quality Improvement
Text Mining
Multinomical Discrete Choice Study Planning
Gradient Boosting Machines

Predictive Analytics Analysis of Means
Interior-Point Models
Random Forrests
Survey Data Analysis Content Categorization
Genetic Algorithms

Operations Research
Discrete Event Simulation Content Categorization
Automated Scoring Simulation
Ontology Management
Time Series Analysis
Model Management
Association & Sequence Analysis

Constraint Programming Fractional Factorial
Ontology Management
Large-Scale Forecasting Regression 32


How can Analytics Drive Customer Values?

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