SegmentaceKlientuARealizaceKampani en[1]

8/8/2019 SegmentaceKlientuARealizaceKampani en[1]

1/6

BUSINESS PROCESS SOLUTIONS

CUSTOMER SEGMENTATION AND TARGETEDMARKETING CAMPAIGNS

KEY STEPS IN THE

PROCESS

Consolidating figures from

different data sources

Client analysis and

segmentation

Selecting cl ients for a

campaign

Setting up a campaign and

assigning cl ients to the

address l ist

Implementing t he campaign

over a selected

communication channel

Identi fying campaign

response

Evaluating the success rate

of a campaign

Customer segmentation

KEY BENEFITS:

The acquisi tion of a

comprehensive client

overview, including history

and a calculation of various

cl ient c haracteristics

The opportunity of client

segmentation - finding

groups of cl ients with

similar characteristics and

projects suitable for a

specific group

Targeted campaigns and

success rate evaluation

Oracle makes customer segmentation and targeted marketing campaigns a real thing!

We offer complete solution for the process of analyzing data about clients, using the

result of analysis for addressing clients with targeted campaigns, and evaluating their

response. Oracle solution enables to control client acquisition, increase share of a

client, prevent clients defection, avoid delinquent behavior among clients, and ensure

efficient cost management.

Solution Architecture

The proposed solution covers the whole process of client analysis and implementation of targeted

marketing campaigns. The diagram below sets out the main solution elements and the individual steps

of the process, applied to each campaign.

Coverage of the client analysis process and implementation of targeted marketing campaign

Consolidation of information from different sources of data

If a client analysis is to be successful, all the related information must be stored in one place. The data

must be:

Integrated Data from different information sources (transactional systems and where appropriate

external sources) are pooled in a single database, allowing for a comprehensive view of the

subjects of interest (e.g. client, product, channel).

Transformed Data in transactional systems are arranged with a view to process transactions like

entering new customer, assigning new product to existing customer etc. They are not intended for

making analysis. Data transformation ensures that questions can be asked, moreover can be asked

Analytical Database(Data Warehouse)

Communication Channels

Transactional Database

(CampaignManagement)

ClientAnalysis

InInformationPortal

C

ampaign

Management

Application

1 2

3

Process of Client Analysis and TargetedMarketing Campaigns Realization

1. Integration of information from transactionalsystems

2. Client analysis (searching for cross sell/upsell, churn prevention, customer acquisition

based on customer and product knowledge)

3. List of customer selection in order to beaddressed by campaign. Transfer to

transactional database of campaignmanagement application

4. Campaign definition and creation of finaltarget list (combination with external sources

possible)

5. Realization of campaign via selectedcommunication channels (mail, e-mail,

contact center etc.)

6. Capturing response to campaign

7. Transfer of all data necessary for campaign

evaluation

4

5

6

7

Transational

System1

TransationalSystem2

TransationalSystem3

Other &External Data

Sources


2/6


upon large volumes of data, which would otherwise be impossible or very difficult to consider.

Historical Besides absolute figures, comparisons with developments in previous periods are

another important aspect of data evaluation. Historical data availability is a prerequisite when

analyzing trends.

Detailed Summary figures are inadequate when identifying 'behavioral characteristics'. A

behavioral characteristic might be, for example, whether a bank client withdraws small regular

amounts or large one-off sums. This sort of information cannot be obtained from summary monthly

balances of the client's account. The storage of detailed data also ensures that new requirements

when developing and expanding the system can be met.

So-calleddata warehouse will supply integrated, transformed, historical, and detailed data, which will

be updated accordingly. Updates are automatic; the correctness and completeness of data are monitored.

Client Analysis

If consolidated and up-to-date data are available, they can then be analyzed. Set ofbusiness goals is the

basis for an analysis. The first step of a client analysis entails a search for questions, which, if answered,

can lead to fulfillment of set sales targets. If a sales target is an increase in the cross-sell ratio, the

related question might read 'Which customer group can tend to buy a specific product?' or 'What is the

typical sequence of usages of products for particular customer group?' or 'What is the typical sequence

of usage of particular products for particular group?'

These general questions need to be further transformed so that they become more specific, e.g. 'How

many clients who use product X also use product Y?' or 'How does the ratio of clients with and without

product Y differ from clients with characteristic A and clients with characteristic B?'

The second step of an analysis, finding answers to specific questions, is a key task of the information

portalused to access data in the data warehouse. The information portal's analytical instruments allow

users to ask questions and receive answers in the form of tables, cross tables and graphs. Graphs are

particularly suitable for identifying coherent events. For example, a pie chart displaying the 'Number of

clients who use individual products and product X at the same time' can quickly give an idea of how

popular individual products are as supplements to product X. A major feature of the instruments used is

that questions can be formulated easily, without the help of IT experts, and that replies are given swiftly

and questions are simple to modify. For example, figures can be viewed from a different perspective, in

greater or lesser detail; data selection can be restricted based on a particular condition, etc. The

flexibility of an instrument is a prerequisite when conducting an interactive analysis, as there are usually

dozens of specific questions being asked and one replied question generates many others.


3/6


Steps of analysis during the preparation of each targeted marketing campaign, including output

examples

Selecting clients for a campaign

Concrete piece of knowledge must be formulated based on the results of the previously described

answers, e.g. 'Clients with characteristic A who are from region B very often have both product X and

product Y'. This knowledge than serves for a decision on appropriate action, e.g. 'Approach clients

with characteristic A from region B who have product X but not product Y with an offer of product Y'.

For this action to be taken, a list of clients with required attributes must be available. Also this list can

be generated via analytical tools of the information portal. The list can contain client identification

information and other information about the clients.

Setting up a campaign and assigning clients to list

The next step is to establish the definition of the campaign. Its done in thecampaign management

application. The campaign definition requires the generation of a list of clients to be addressed. The

sources for this target list are list of clients prepared in the previous steps, lists generated directly from

corporate transactional systems or lists from external sources can also be used, e.g. lists of companies or

individuals from various marketing surveys.

There may be any number of source lists, and they can be combined in different ways (merger,

intersection, elimination). Instead of complex queries, several simpler questions can be formulated and

their combination results in a required list.

One example here would be the prevention of addressing customers by campaigns too often. The list is

generated by eliminating those who have been recently addressed from the list of customers the

campaign is targeted at. Elimination is ensured by the 'Exclude' operator used when connecting lists.

Other list connection opportunities via the 'Include', 'Exclude', and 'Intersect' operators are shown in the

following diagram.

Steps of analysis:

Formulation of businessgoal

Searching for generalquestions, which couldlead to goal fulfillment

Transformation generalquestions into specificquestions, answers forthem could be find bysoftware analyticaltools

Formulation of piece ofknowledge

Suggestion of actions,which should lead togoal fulfillment basedon obtained piece ofknowledge

Examples of outputs from individualsteps:

Increase cross-sell ratio

For which group of customer is specific aparticular group of products?

How does the ratio of clients who have anddo not have product Y differ for clients withcharacteristic A and clients withcharacteristic B?

Clients with characteristic A have very oftenboth product X and product Y.

Offer to clients with characteristic A havingproduct X and having no product Y theproduct Y.

Offer to new prospects with characteristic Athe joined package of products X and Y.


4/6


Examples of client list integration during the structuring of campaigns. X represents customers who will

be addressed. X within circle 1, 2, or 3 identifies customers from background list 1, 2, or 3.

The campaign definition includes a classification of the products and product packages the campaign

focuses on. This information is used later when evaluating response to the marketing campaign.

Implementing a campaign through selected communication channels.

The first step in implementing a campaign is to plan the individual campaign activities. For example, it

is possible to plan to address a test sample of clients first and then rest of the clients in the list. It opens

the possibility to adapt selection criteria for the campaign after evaluating the response of the test

sample. It minimizes costs and improves efficiency of the campaign. It is also possible to plan an initial

approach via printed letter, followed up after a set interval by, say, e-mail or telephone contact for all or

selected (most important) customers. Preparation includes the production of a template for personified

text to be sent to each customer in the list, or a script scenario for contact center agents.

The second step is the actual communication. Active addressing includes sending a letter or e-mail,

active (outbound) telephone call or delegating the task to contact client directly to sales staff. Passive

addressing means utilizing the information that customer is addressed by campaign while he contact the

company himself i.e. visits the branch or contacts company via telephone. Alternative communication

channels like SMS or WWW can be used after integration of the relevant applications.

Identifying response to a campaign

An integral part of a campaign is a campaign evaluation. The response to the campaign needs to be

identified before the evaluation can be made. There are several strategies designed to identify the

campaign response, some of which may be combined.

Indirect response identification is the simplest solution is from the organizational point of view. If any

of those addressed clients starts to behave in the manner the campaign intended (typically they buy an

X

XXX

XXX

2. Intersect1. Include

1. Include

3. Include

2. Include

3. Intersect

Target List A

All items in List1

Only items, which are in both List1

and List2 All items, which are in List3 or in

the result of the previous step

Target List B

All items in List1

All items, which are in List1 orList2

Only items, which are in both List3and result of previous step

X XX

1. Include 2. Include

3. Exclude

XTarget List C

All items from List1

All items, which are in List1 orList2

Items from the previous stepexcluding items from List3


5/6


offered product, start to use products in the particular way, etc.) in selected time frame, they can be

assumed to be reacting to the marketing campaign. Identifying these customers is just part of customer

analysis upon data warehouse (e.g. group of customers, which bought product is matched to group of

customers addressed by campaign). The advantage of this system is that it is simple. There is no need to

draw up a communication or organization project to identify the response in communication channels

respective transactional systems (contact center application etc).

Another option would be to identify the response directly, i.e. to record whether a client is responding

to the campaign at the time a product or service is ordered, or other anticipated client reaction.

Information of a client's response to a campaign is stored in transactional systems. From here,

information is transferred to the data warehouse as background material for evaluations.

Evaluating the campaign success rate

Information about addressing a client via a specific marketing campaign and information about the

response are available in the data warehouse. As a result, it is possible to use the same analyticalinstruments for an evaluation of response and the overall success rate of the marketing campaign as

those used for client analysis.

Customer segmentation

Client segment is a group of clients with specific characteristics. Smaller number of static segments is

usually defined, like major-key-SME accounts etc. The rules for belonging to static segments do not

change during the year usually. Static segments are used for measuring general business performance

and general campaign targeting. They could be also used for dividing responsibility between teams or

departments.

Dynamic segments are defined ad-hoc for the specific purposes and could be easily changed or

dismissed during the time. Dynamic segment is for example a group of customers, who:

will be targeted by several following campaigns. It simplifies the selection of customers for

addressing by campaign only customers belonging to specific segments are selected.

behave accordingly to the campaign intent (e.g. bought particular product). It simplifies the

evaluation of customer response customers entering the segment in appropriate time frame are

taken as respondents to campaign.

have the same characteristics summarized from large amount of detailed data. They solve the

situation, when the data are too detailed to be used for client analysis directly. For example

detailed account transactions are used for computing client profitability (by more or less precise

way) and clients are divided into several groups segments based on it, e.g. most valuable,

valuable, average, losing. These segments could be then easily used for multi-criteria analysis like

How many most valuable customers are in each region, industry, sales channel? or How many

customers churned in each value segment, region, month?

has the propensity to particular behavior (e.g. churn, fraud, buy particular group of products)

identified by advanced analytical techniques like data mining.

Evaluation ofsegment history could be also very useful. Monitoring movements of customers between

segments in time brings the better understanding about how the business and customer portfolio are

changing in more quality than quantity point of view.

Moreover segments and their history can be used as the part ofcustomer life cycle modeling solution.


6/6


Segments model stages of the lifecycle model and monitoring inter-segment movements means

monitoring movements between lifecycle stages.

Other Functionality Mass campaigns, Non-marketing campaigns, Automation of business rules

Components of herein discussed solution offers much more functionality. Some examples follows.

Mass Campaigns Campaign management application could be used not only for direct

marketing campaigns but also for mass marketing campaigns planning and execution. Budget

control, multi-staged campaigns, task management for campaign team members etc. could be used

for mass campaigns with no additional effort.

Non-marketing Campaigns Totally same infrastructure of solution could be used for addressing

clients for non-marketing purposes. The typical example is collections campaigns. Clients with

payment delay are selected during the preparation phase. The monitored behavior in order to

evaluate response is focused on payments history evaluation. The prerequisite for this is to have

the relevant data transferred from transactional systems into the data warehouse.

Automation of business rules - Campaign management application enables to trigger campaign

automatically in selected time periods. Moreover the campaign could be triggered only if particular

condition is fulfilled. It opens a wide space for business rules automation. Typical business rule

sounds like If the customer enter the segment High Propensity to Churn, and simultaneously he

already is in the segment Most Valuable Customers, prepare the script with detailed information

about customer near history and generate task for contact center agent to call the client and

evaluate whats happening.

SegmentaceKlientuARealizaceKampani en[1]

Documents

Transcript of SegmentaceKlientuARealizaceKampani en[1]