Soulful Analytics: Embracing gut instincts as part of the modeling, Points
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Transcript of Soulful Analytics: Embracing gut instincts as part of the modeling, Points
Soulful Analytics : Embracing gut instinct as a part of the modeling
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Objectives
Understand how big data is changing the
way we make decisions.
Understand what’s Soulful analytics.
Points case study.
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Leverage our LOYALTY COMMERCE PLATFORM to
facilitate growth and innovation with loyalty programs
PARTNER with leading loyalty Programs around the
world
Deliver multiple business applications through both
PRIVATE LABEL and POINTS’ BRANDED channels
Generate revenue by TRANSACTING POINTS for
retail margin, service fee or commission
LOYALTY COMMERCE PLATFORM
• Program Integration
• Member Validation
• Debit, Credit, Payment
• Marketing / Merchandising tools
• Promotions: cross / pre / post transaction
• Proactive vs. Reactive
• Management of marketing assets
• Pricing analysis
• Fraud management
• Distribution Partner Integration
• Data correlation (internal + external)
• Content Management
Points Current Core Business
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Points is the only company with transaction level access to
the world’s largest loyalty programs with +500 million
members
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200+ product deployments on 5 continents – transaction level access is a key strategic asset and barrier to entry
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Externalizing the Loyalty Commerce Platform for the future
3RD PARTY
ACCESS
LOYALTY COMMERCE PLATFORM
• Program Integration
• Member Validation
• Debit, Credit, Payment
• Marketing / Merchandising tools
• Promotions: cross / pre / post
transaction
• Proactive vs. Reactive
• Marketing asset management
• Pricing analysis
• Fraud management
• Distribution Partner Integration
• Data correlation (internal + external)
• Content Management
PAYMENTS/WALLETS
TRAVEL
RETAIL/ECOMMERCE
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GAMING SOCIAL
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Big Data has changed the decision making landscape
Real time decision making
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80% decisions made based on gut instinct!
58%
of respondents identify “Outcome from data” as a key analytics challenge
US executive says2.
“Sometimes in business there’s that gut instinct..how to take that
information and apply it to make business strategies work is one of the biggest challenges.”
1. Creating Business Value with Analytics. MIT Sloan Management Review.
2. Based on Analytics in action : breakthroughs and barriers on the journey of ROI.
Adoption rate of analytics2
Mean Decisions
How are Senior managers making decisions2
Analytics Maturity Components1 • Tools and expertise • Information management
practices • Analytics culture
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Points story - Right Offer, Right Time, Right Person, Right Channel
Increase transaction volume for Buy, Gift product during a month when promotion is in the market. With minimum number of emails.
Data Available - 700MM Data Points •Member demographic information. •Member transaction logs. •Communication logs. •Web logs.
Few known facts : • Average transaction size for each transaction. •Average response rate for current promotions and total number of emails sent.
•Conversion funnel for the product. •Current penetration in the market.
3 MM + Members
200K Transactions/Year
4 Average emails/month
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Business Objective
Analytics Goal
Predictive Model Development
Deployment Business Owner
Business Analyst
Data Science Build transaction volumes.
Find customers who have a high likelihood to buy
Data Findings : geographically all over the globe. Previous balance between 0K – 200K, Previous activity – Skewed on left.
Modelling decision – Throw it in a classification model and lets look at sorting.
Model result : Deploy to 1.5MM customers
The Waterfall Approach
?
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Lifts do not come with revenue guarantee!
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
1 2 3 4 5 6 7 8 9 10 all
Transaction rate Deciles charts
All Targeted
Offer No Offer
• Why 3 deciles? • What does lift represent? • What about other 60% left
out in deciles 4-10? • Is there a long term
impact? • REVENUE??? • Does it represent all the
customers?
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Model is good but ….
Lack of Comprehensibility
Lack of Confidence in model
Long delivery time
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Soulful Analytics : Embracing the gut instinct!
Business Objective
Business Goals
Success Metrics
Analytics Objective
Modelling Process
Business Tactic & ROI
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Defining Business Goals : First Step towards soulful analytics
Disintegrate business objective into specific goals
Business Analytics
Ask Questions to understand and disintegrate the problem
Provide analysis to understand the problem
Business Goal
Experience + Emotion
Data and Logic
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Defining Business Goals : First Step in the Partnership
Right Person
Customer Segments
First Time
2 txn’s Multiple
programs
>2 txn’s
Increase penetration,
moderate transaction
size
Increase
engagement in
multiple programs,
Very high transaction
size
Business
Expertise
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Right Offer
1.83%
1.37%
1.22%
1.05%
Average transaction rate by offer
Increase penetration in
customer with likelihood to
buy with “50% more” offer
Business Expertise
Increase overall campaign profitability
Increase Number of New Customers
Increase engagement of repeat purchasers
Analytics team is a partner in framing the goals.
Actionable business goal supported by data
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Models are based on tactics, not strategy.
Send PDC promotions to repeat customers
Send better and best offers to existing customers to
increase revenue.
Increase engagement for repeat customers
Target new purchasers using retargeting
Predict expected membership in other programs.
Model for offer response on these programs.
Rank customers based on their likelihood to buy next month.
Rank for all offers and find better and best offer response rates
Identify potential customers for retargeting using weblog data.
Rank on likelihood to buy
Increase Number of New Customers
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Modelling is incomplete without business validation!
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Are we aligned?
Value of
redemption
High mileage
balance
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Business Validation - Key ingredient for business buy in!
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1
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3
4
5
1 2 3 4 5 6 7 8 9 10
Mo
de
l li
fts
Deciles
Repeat Buyers Model
Baseline
Key variables Chart – D1
Last
Transaction
size
Number of
members # of redemptions
in last 2 years Card holder
7890 8490 2 5604
49924 6870 1 1393
72972 500 0 313
34815 4970 1 3619
185500 20 0 17
98384 200 0 15
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Business Goals
Success Metrics
Analytics Objective
Modelling Process
Business Tactic & ROI
Collaborate for cultivating the data culture!
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