Bigger Data for Marketing and Customer Intelligence eBook

7/29/2019 Bigger Data for Marketing and Customer Intelligence eBook

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Customer

Segmentation

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1Learn how marketers analyze customer data to improve campaignperformance, attract new customers and improve loyalty.

Bigger Data for Marketing andCustomer IntelligenceCustomer Analytics Roadmap
http://www.angoss.com/


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Customer Segmentation Customer Acquisition Upsell/Cross Sell Next Product Customer Retention Voice of the Customer Product Segmentation Customer Lifetime Value

1

Bigger Data or Marketing and Customer Intelligence ...........1

Customer Analytics Answers Questions ................................... 3

Customer Segmentation ........................................................... 5

Customer Acquisition ................................................................ 6

Upsell/Cross Sell ........................................................................ 7

Next Product/Recommendation .............................................. 8

Customer Retention ................... ..................... ..................... .... . 9

Voice o the Customer ................................ ..................... ..... .. .1 0

Product Segmentation ..............................................................11

Customer Lietime Value .........................................................12

About Angoss Sotware ............................................................13

Resources ..................................................................................14

Customer Analytics Roadmap

Table of ContentsCustomer

Segmentation

CustomerAcquisition

Voice o the

Customer

Upsell/Cross SellNext Product/

Recommendation

CustomerLietimeValue

ProductSegmentation

CustomerRetention/

Loyalty Churn

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Customer Acquisition Upsell/Cross Sell Next Product Customer Retention Voice of the Customer Product Segmentation Customer Lifetime ValueCustomer Segmentation

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1

The era o Big Data is awakening companies to the opportunities to use customer data or competitive

advantage. Marketers are eeling the pressure to shit rom gut-based to data-driven decision making as the

linkage o analytics to perormance is hard to ignore.

Yet, most are in the early stages o leveraging the value o their customer data. Marketers still primarily rely on

inormation rom their previous experience or intuition about customers.

Marketers are aced with the new challenge to understand customer eedback, behaviour and needs well

enough to make data-driven decisions about what customers are likely to respond to and what customer are

likely to purchase.

The Customer Analytics Roadmap allows or a complete customer liecycle analysis o your marketing, CRM

and customer intelligence.

Bigger Data for Marketing and

Customer IntelligenceCustomer Analytics Roadmap


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2

Best-in-class companies are more likely

to customize oers to market segments, and more likely

to customize oers to individuals.

24%85%

Companies will increase their budget or marketing analytics tools by

over the next years.360%

O companies are not yet using marketing analytics--even i they have access to the data.63%

Only o projects leverage big data.11%* Big Data or Marketing: Targeting Success, Aberdeen Group, Jan 2013

* Using Marketing Analytics: I Do, Thereore, I think, Forbes, May 2012

* Marketers Flunk the Big Data Test, Harvard Business Review, Aug 2012


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3

Howshould products bebundled?

Which customers are most

likely to leave?are customerstalking

about?

Who are themostvaluable customers?

What

Customer Analytics Answers Questions


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4

Which

How to improve marketingcampaign response?

customer segments are the most

proftable?

Which customers are mostlikely to upgrade?

Whichproducts will customerswant next?

Customer Analytics Answers Questions


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Customer Segmentation Upsell/Cross Sell Next Product Customer Retention Voice of the Customer Product Segmentation Customer Lifetime Value

Customer

Segmentation

5

Customer segmentation allows you to understand thelandscape o the market in terms o customer characteristicsand whether they naturally can be grouped into segmentsthat have something in common.

For example, each point on the scatter plot represents acustomer in terms o his/her age and income. We can nd 5segments in this data. Some data points have extremevalues which may be outliers. And some records dontbelong to any o the segments.

Watch Video

Customer Segmentation

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Customer Segmentation Customer Acquisition

Yuppies

Students

Executives

Retirees

Outlier

Outliers

Outlier

Soccer Moms
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Customer Segmentation Next Product Customer Retention Voice of the Customer Product Segmentation Customer Lifetime ValueUpsell/Cross Sell

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Customer acquisition is used to acquire new customers andincrease market share, and oten involves oering productsto a large number o prospects. This diagram shows aschematic o the population with each record representedas a dotprospects are those marked in red.

We see that prospects are ound within distinct segmentso the population. The objective o a customer acquisitionmodel is to nd those segments that have a highconcentration o potential customers.

Watch Video

Customer Acquisition

Customer

Acquisition

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Customer Segmentation Customer Acquisition

Potential Customers


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Customer Segmentation Customer Acquisition Next Product Customer Retention Voice of the Customer Product Segmentation Customer Lifetime Value

7

Upsell/Cross Sell

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Upsell and cross sell aim to provide existing customers withadditional or more valued products. Upsell is the practice oselling more expensive products, upgrades or add-ons to anexisting customer. Cross sell is the practice o sellingadditional products to existing customers.

The target group is dened by customers who already haveother products or more o the same products. For example,here are 2 groups o customers: the blue segmentrepresents customers who have product A, and the greenrepresents customers who have product B. The intersectiono these two groups (shown in yellow) represents customerswho have both products A and B.

Now, suppose that you would like to cross sell product B to

customer who have product A. First, you would build amodel to score all customers with product A who do nothave product Bcustomers assigned high scores will belikely to buy B as well as A.

Watch Video

Upsell/Cross Sell

Upsell/

Cross Sell

Prospects orProduct A

Prospects orProduct B

Customers withProduct A & B

Customers withProduct B

Customers withProduct A


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Customer Segmentation Customer Acquisition Upsell/Cross Sell Customer Retention Voice of the Customer Product Segmentation Customer Lifetime Value

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Next Product

Next product recommendation aims to promote additionalproducts to existing customers when the time is right. Whena company has many products to oer they have todetermine which o those should be oered to a customerbased on the existing products the customer owns.

For example, the rst row in this table shows a customer thathas all products; thereore, he/she should not receive oersto buy more products.

The second row shows that this customer has all productsexcept B; evidently, the next oer should be or product Bsince it is the only product they dont have. However, or theremaining customers, its not clear which product tooer. Thats where the next product recommendation model

comes in.

It works by building an acquisition model or each product.The scores can be normalized using ranks. And thoserankings are applied to each customer. The product thatranks highest with that customer would be the next productto recommend to them.

Watch Video

Next Product/Recommendation

Next

Product

X

X X

X

X X X

X

XX


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Customer Segmentation Customer Acquisition Upsell/Cross Sell Next Product Voice of the Customer Product Segmentation Customer Lifetime Value

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Customer Retention/Loyalty/Churn

Customer retention and churn models aim at maintainingand rewarding customer loyaltyreducing customerdeection. Reducing churn and building loyalty withretention strategies can signicantly help grow yourbusiness. In the case o churn, we are looking or customers

who will cancel a product within a certain time rame.

There are 4 types o churn:

Customer churn: customers are leaving the organization bycancelling/stopping to buy the companys products.

Product churn: customers with multiple products arecancelling some o their products.

Declining revenue / downgrading: customers are reducingtheir level o product usage.

Product replacement: customers are replacing one productwith another, usually cheaper, product rom the samecompany.

Watch Video

Customer Retention

Customer

Retention

X

XX

Home Phone Cell PhoneCable TV Netfix


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Customer Segmentation Customer Acquisition Upsell/Cross Sell Next Product Customer Retention Product Segmentation Customer Lifetime Value

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Voice o the Customer

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In the models discussed so ar, structured data was used thatwas collected rom product ownership, sales transactions,payments and customer related data. These data are usuallystored in structured databases that allow or extraction andanalyses.

There is another, growing source o data that is now beingused to understand customer eedback and predictcustomer behaviorthat is Voice o the Customer in theorm o unstructured ree text captured rom sources like callcenter records, blogs, social media, customer surveys andemails. Text-based sources produce massive amounts ounstructured data that contain customer eedback. Fromthese sources, you can learn how they eel about yourcompany, its products and the competition.

Text analytics allows or the analysis o these text-baseddata sources and turns unstructured data into structuredelds containing the entities (basically the nouns), themesand topics that customers are talking aboutas well as thesentiment (positive or negative).

Watch Video

Voice of the Customer

Voice of the

Customer

RSS Feeds

Websites

Social Media

Surveys

File Folders

Emails

Customer Feedback
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Customer Segmentation Customer Acquisition Upsell/Cross Sell Next Product Customer Retention Voice of the Customer Customer Lifetime Value

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Product Segmentation

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Product segmentation allows you to optimize productbundles using product anity, in most cases using MarketBasket Analysis.

Market Basket Analysis is used to nd product bundles. For

example, you may nd that products A,B and K are soldtogether in a high relative requency. This suggests thatbundling these products would be welcomed by customers.

Another use o Market Basket Analysis is to analyze thecontents o sales baskets, or groups o products that werebought together. The algorithm extracts rules that are thenused to score the customers and their previous purchases tond the products they are likely to buy.

Watch Video

Product Segmentation

Product

Segmentation

Variation 1

Products &Services

Variation 2

Variation 3

Variation 4
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Customer Segmentation Customer Acquisition Upsell/Cross Sell Next Product Customer Retention Voice of the Customer Product Segmentation

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Customer Lietime Value

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Customer lietime value models are used to designprograms to appreciate and reward valuablecustomers.

Customer lietime value represents the expected

revenue that is to be earned rom the customer overher/his lietime considering all o the possibleproducts that this customer could purchase.Customer lietime value can also represent an indexthat represents such expected revenue.

These models are based on several calculations andother models. They use the value o the customer asidentied by segmentation models, the potentialrevenue possible through acquisition, cross- and

up-selling, the potential loss through churn, andnally the prediction o the lietime o the customer.

Watch Video

Customer Lifetime Value

Customer

Lifetime Value

$500

$700

$1900

+

-

2017

2016

2015

2014

2013

+


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Predict. Act. Perform.

PREDICTthe best or most attractive,proftable opportunities by discovering

valuable insight and intelligence romyour data

Clear and detailed recommendationswhether or sales and marketing, orrisk are provided or businesses toACTupon

PERFORM and deliver measureableROI to improve business perormance
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Resources

Video Series: Customer Analytics RoadmapExplore each o the 8 stages o the customer analytics roadmap by viewing these on-demand videos. Learnmore about how marketers and customer intelligence proessionals can analyze customer data or insights thatimprove marketing campaign perormance, attract new customers and improve customer loyalty.Watch

eBook: Text Analytics Beginners GuideYou may also enjoy the Text Analytics Beginners Guide eBook about how to leverage customer eedback to

support customer experience management. Ater reading it, youll be better equipped or a new age ointegrated customer intelligence.Download

Resource CenterVisit our News and Resources Center to access many more resources to help unlock the power o yourcustomer data using predictive analytics.

Visit

Weekly Demos

Plan to join us during our regularly scheduled weekly demonstrations on a variety o sales, marketing andcredit risk topics. Learn best practices, watch product demonstrations and ask questions.Register
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Copyright 2013 Angoss Sotware Corporation

About Angoss Software

Angoss is a global leader in delivering predictive analytics to businesses looking to improveperormance across sales, marketing and risk.

With a suite o desktop, client-server and big data analytics sotware products and cloudsolutions, Angoss delivers powerul approaches to turn inormation into actionable businessdecisions and competitive advantage.

Angoss sotware products and cloud solutions are user-riendly and agile, making predictiveanalytics accessible and easy to use.

Headquartered in Toronto, Canada, Angoss has oces in the United States and UnitedKingdom. For more inormation, visit www.angoss.com.

Follow and connect with us:
http://www.angoss.com/http://www.youtube.com/user/AngossSoftwarehttps://twitter.com/angoss/http://www.linkedin.com/company/angoss-softwarehttp://www.angoss.com/http://www.angoss.com/

Bigger Data for Marketing and Customer Intelligence eBook

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