Smarter Analytics Leadership Summit Customer Analytics Track. Optimize Every Customer Interaction with Next Best Action

Transcription

1 Smarter Analytics Leadership Summit Customer Analytics Track Optimize Every Customer Interaction with Next Best Action

2 Agenda Farhana Alarakhiya Introductions and Scenario Cris Payne, XO Communications Customer Analytics Journey David Pugh Next Best Action Overview Jon Hounslow, David Pugh, Steve Buckley, and Cris Payne Next Best Action Workshop: The How to of Next Best Action Farhana Alarakhiya Wrap-up / Q&A 2

3 Welcome and Scenario Mobile Phone Farhana Alarakhiya 3

4 New Imperatives of Marketing Obama s team used analytics to gain DEEP KNOWLEDGE of individuals And TURNED that knowledge into a SYSTEM of ENGAGEMENT 4

5 Action Impact on Churn Impact on Customer Lifetime Value Likelihood to respond positively to action Bill has had a number of dropped calls recently $20 off this month s bill Deliver an apology Issue with cell tower being fixed this weekend 6 months free unlimited data plan Bill called a competitor s contact center Upgrade phone 5

6 Customer Analytics journey Cris Payne XO Communications 6

7 Cris Payne, XO Communications Cris Payne is the Senior Manager of Customer Intelligence & Predictive Analytics at XO Communications, Inc. He is responsible for the direction and implementation of predictive analytic sciences and targeted marketing programs at XO. Mr. Payne has over 14 years experience in the telecommunications industry building technology solutions. While at XO, Cris has launched several innovative programs and technologies including SPSS Modeler. Cris holds a BA in business administration from the University of Utah and an MBA from Weber State University John B. Goddard School of Business and Economics. He lives in the Salt Lake City area with his wife, Danielle, and daughters, Chloe, Aysha, and Berkley. 7

8 XO Communications Organization: B2B telecommunications service provider, headquartered in Herndon, VA (4k employees) Assets: Nationwide 100Gbps IP network, extensive local metropolitan networks and broadband wireless facilities Customers: Retail services (VOIP, Data, Networks) provided to businesses. Wholesale services (long haul circuits) provided to other telecommunications carriers. Monthly subscription business model 8

9 Investment Drivers Why we invested in business analytics Improved Targeting Cost Control: Focus resources on high-value, high-potential customers to control and/or reduce overall marketing costs. Enhanced Revenue: Better targeting yields campaign uplift, translating directly into enhanced revenue. To Achieve a Competitive Advantage: A well-executed Predictive Analytics strategy provides a key advantage over competitors in the marketplace. Customer Experience 9

10 Churn Rate Churn Success at Churn Rate X Size 3.00% 1.50% Large Customers Med-Small Customers 0.00% 10

11 ROI Results (Churn Project) How successful was our investment? Overall Churn Rate nearly halved since project began. 1 st Year: ROI: 376% Payback: 5 months Annual Churn Savings: ~$11,200,000 11

12 Next Best Action Overview David Pugh 12

13 The New Customer Experience Mandate Expectation Communicate with consistent messages across channels based on my needs Sales & Marketing Programs Expectation Deliver a relevant and personalized experience that s consistent across all channels The Customer Experience Expectation Delight me with proactive steps to improve my situation based on your guidance Insights & Analytics 13

14 IBM Smarter Analytics Signature Solution: Next Best Action Build long-term customer relationships that drive enterprise business results one interaction, one decision at a time. Solution overview Deliver the most appropriate action at the right time across channels. Personalized interactions are enabled by:. Comprehensive view of a customer Real-time analytics to anticipate customer behavior Cross-channel delivery of best action to address customer need and enhance long term business revenue Business outcomes Improve service delivery and customer satisfaction Optimize revenue generating actions such as up-sell, cross-sell, retention, and marketing mix Increase strategic lifetime value and loyalty Telco Banking/FM Insurance 14

15 NBA drives successful, relevant interactions across all channels and all lines of business in batch and real time based on the latest 360 customer data Current Customer Request Next Best Action 15

16 Next Best Action: In summary, what makes NBA unique? Advanced Analytics: Market-leading tools for predictive and advanced analytics Integrated optimization techniques that combine analytic output for the best answer Decision Management: Mature technology combining analytics and business rules creation, integration, and execution Real-time recommendations beyond just marketing offers Cross Channel Real Time Action: Actions include customer service, issue resolution, account management response and billing all touch points managed in real time through the appropriate channel. IBM Big Data Platform: Integrate and manage the full variety, velocity, and volume of data. Establish a phased approach for enhanced 360 customer view. Apply advanced analytics to information in its native form. Multiple Entry Points: Analytics, Decision, and Information Management provide quantitative starting points for Next Best Action project. 16

17 NBA Subsystems Capturing Customer Activity: This subsystem gathers information about the customer s activity, including the outcomes of the Next Best Actions offered by this solution. Capturing Customer s Activity Usage The three major parts, or subsystems of the NBA solution are: 3 Trigger Context Action Additional Information Decision Models Reporting Master Information & System of Record Feedback Real-time Decisions Trigger Execute Action Human Operated Channel 2 Analytics Management Decision Models Analytics Management: Responsible for developing the decision models for the solution. 1 Real-time Decisions: This subsystem contains the execution of the Next Best Action decision loop. Customer Outcomes Automated Channel Channels 17

18 Getting Started with Next Best Action Cris Payne Jon Hounslow David Pugh Steve Buckley 18

19 NBA Discussion Topics The How to of NBA How to Start on an NBA Journey Use of Use Cases / Business scenarios Catalyst for Change Role of Analytics How much Data do you need Building a Vision and a Roadmap 19

20 IBM Smarter Analytics is a holistic approach that turns information into insight and insight into business outcomes. Transform through analytics for breakaway results Align Anticipate Act your organization around information see, predict and shape business outcomes with confidence at the point of impact to optimize outcomes Learn from solutions that get smarter with every outcome 20

21 Business value is realized as soon as we link data to analysis to the point of customer contact IVR Web Data Sources Information Analytics Operations Mobile Apps SMS Social Media Channel Voice Chat Information Analytics Operations Align Anticipate Act 21

22 NBA Discussion Topics The NBA Journey Entry Points Use Cases / Business Scenarios Catalyst for Change Role of Analytics Data Considerations Building a Vision and a Roadmap 22

23 NBA Subsystems Four Example Entry Points Decision Models Build Analytics Capability Analytics is a focus area, maybe as a shared service and maybe driven by CXO level as a business imperative Create single, trusted Data Source A CXO strategic initiative or led by IT as the source of a trusted 360 view of the customer; likely done in parallel with other NBA activities Capturing Customer s Activity Usage Customer Trigger Context Action Outcomes Additional Information Reporting Master Information & System of Record Feedback Real-time Decisions Trigger Human Operated Channel Automated Channel Channels Execute Action Analytics Management Decision Models Marketing Led Marketing driven initiative focused on improving offer acceptance, may extend to both inbound and outbound channels Initiative from within a single Channel Individual analytics effort performed within a channel e.g. contact center to drive more successful interactions 23

24 Next Best Action: Renewals use case High ARPU Long tenure 6 mths left on contract Service call: reset Advice: eligible for HUG Renews High ARPU Long tenure 10 mths left on contract Call spend declining 2 service queries in six weeks Satisfaction = 5 Service call: reset Offer: free early upgrade Renews If ARPU >=$90 AND customer tenure >5 years AND contract term=36 months AND months remaining on contract <=9 months => customer is eligible for a Hardware upgrade If ARPU >=$90 AND customer tenure >5 years AND contract term=36 months AND months remaining on contract >9 months and <=12 months => customer is eligible for a Hardware upgrade with an Early upgrade fee ($15 * months remaining on contract) If ARPU >=$90 AND customer tenure >5 years AND contract term=36 months AND months remaining on contract >9 months and <=12 months AND Predicted Churn Risk > 0.7 => offer Hardware upgrade waive early upgrade fee 24

25 Use cases are selected according to business value and ease of implementation 4,0 High Value 3, Business Value 2, ,0 Renewal Billing Service Troubleshooting Hardware Repair Multi Channel LOB Churn Size of the Bubble represents the Progress along the Roadmap Low Value 0,0 0,0 Hard 1,0 2,0 3,0 4,0 Ease Of Implementation Easy 25

26 Catalysts for Change Beyond data and technology, XO Communications needs to organize for success; Introduce BI Best Practices and governance, support End User enablement and align our BI Strategies and priorities to our strategic goals How do I access information in diverse data sources? How can everyone use and trust the same view of data across my organization? How do I scale to support mission critical deployments? How do I deploy today and respond to changing requirements? Catalysts for Change Many user roles and demands Multiple Tools and Processes Many applications, platforms Information silos, multiple sources Unorganized Behaviors 26

27 NBA Discussion Topics The NBA Journey Entry Points Use Cases / Business Scenarios Catalyst for Change Role of Analytics Data Considerations Building a Vision and a Roadmap 27

28 Areas of Analytics Focus Churn risk mitigation and management Predicting/identifying fraud Pursuing new revenue opportunities Unstructured data analysis Operationalizing models, segmentation Developing the essential and elusive single version of the truth Determine promotion effectiveness and use to build better predictive models 28

29 Results of Utilizing Analytics Reporting What happened? (Rear-view mirror, inactive) Analytical Why did it happen? (Root cause analysis, reactive) Predictive What will happen? (Forward forecasting, prediction, proactive) Operational What is happening? (Dashboarding, real-time, process monitoring, autonomous) Adaptive What do I want to happen? (Strategic, process modification/management, proactive management) 29

30 Differentiating Analytics Capabilities. Customer Lifetime Value $ Right Offer at Right Time 1:1 inbound communications with the ability to determine likelihood to respond. Building the Relationship Moving from Offer to Action; consider recent service history, transactions and interactions Using behavior patterns Predicting behavior and using triggers to make recommendations that reduce churn and drive cross sell / up sell Focus on Lifetime Value Apply more sophisticated modeling to move customers along the path of highest value. Analytical Sophistication Acquire Personalize Retain Grow Growing the Customer Relationship 30 30

31 NBA Optimizer adds state-based action optimization.. in pursuit of maximum customer lifetime value Customer is in some state (micro-segment) at any point in time Enterprise s action will move customer into another state Enterprise s goal is to take sequence of actions to guide customer's path to maximize customer s lifetime value Customer A s path under Action E Valuable Customer Current policy Optimized NBA policy Potentially Valuable Action A Repeater Action C Loyal Customer Repeater Loyal Customer Repeater Bargain Hunter Action B One Timer Action D Defector Defector 31

32 Macro-Segments vs. Micro-Segments (States) Macro- Segments: Fairly static attribute definition S1 S2 S3 S4 S5 Micro- Segments: Defined by current state on a defined path M1 M2 M3 M4 M5 M6 M7 M2 M3 M4 M5 M2 M3 M4 M5 M1 M2 M3 M4 M1 M2 M3 M4 M1 M1 Actions & Offers: micro-segments enable better targeting O1 O5 O6 O7 O1 O4 O5 O1 O4 O5 O1 O1 O2 O2 O2 O2 O2 O3 O4 O3 O3 O3 O4 O3 O4 32

33 Next Best Action enables clients to tap into the wealth of insights and predictions hidden in their customer data How? Why? Interaction data / chat transcripts Call center notes Web Click-streams Attitudinal data Opinions Preferences Needs & Desires Who? Descriptive data Attributes Characteristics Self-declared info (Geo)demographics Behavioral data Orders Transactions Payment history Usage history What? 33

34 Four stages to the Evolution of the Consumer Experience: FROM products TO value added experience Relevant Some relevant offers, but very confusing because some are not B Offers feel more tailored to me, but one hand doesn t feel like it knows what the other is doing Tailored A Evolution of the Consumer Experience C Insurance Co #1 is amazing it tells me what I need to know when I need to know it. I tell all my friends how easy Insurance Co #1 makes it to do business on line, on my ipad, over the phone any way I choose Timely D Recommendations feel relevant and I see consistent messages when I interact with Insurance Co #1 Consistent 34

35 Initial Scope and Focus Data Governance Alignment Business Strategy Alignment IT Governance Alignment Best Practices & Standards Management Education XO BICC Advise & Consult Support Community Services Immediate benefits to XO Communications in deploying the BICC: Scalability End User Enablement BI Enabling Best Practices BI Business Strategy Alignment One Single Version of the Truth Promotion Communication & Evangelism Enterprise Technical Architecture Primary Secondary BEST PRACTICES & STANDARDS MANAGEMENT Methodologies, Knowledge base, Standards Proven practice assets, Sharing Best Practices BUSINESS STRATEGY ALIGNMENT Strategy & Value Assessments, Roadmap to BI maturity, Value Validation, BI Priorities DATA GOVERNANCE ALIGNMENT Stewardship, Ownership Definitions, Quality EDUCATION User Adoption Services, Education (Classes, selfpaced, CBT), Skills Assessments, Training Paths / Roadmaps COMMUNICATION & EVANGELISM Success Stories, Newsletters, User Groups, Technology Showcase, Wikis, blogs, social media ENTERPRISE TECHNICAL ARCHITECTURE Planning & Design, Installation, Provisioning, Tuning Initial Focal Areas The XO BICC will provide economies of scale for BI efficiencies and be a solid foundation to radiate an ever expanding BI footprint BI Enablement End User Enablement through Education, Communications & Project Assurance Services BI Strategy Alignment BI Business Transformation through strategic priority project support BI Community of Practice & Infrastructure Data Integrity & Efficiencies through BI Best Practices, Data Governance, Guiding Team 35

36 Roadmap Text Analytics: Near-real-time text analysis will allow immediate identification of operational issues. Visual Analytics: Better visualization of geographic, perceptual, or behavioral trends. More intelligent dashboards. Decision management modeling and optimization analytics: Embedding predictive analytics in operational systems optimizes and accelerates business processes by suggesting effective actions, correct messages for reps to present to at-risk customers. Note: Next best action (IBM term) Propensity to Purchase 36

37 Defining an NBA project and where to start should consider 4 key inputs BI roadmap CLIENT Data Roadmap 360 View of the customer MDM initiatives Key representative Use cases and capabilities Assessed and prioritized Client NBA Roadmap CLIENT Technology Roadmap In Flight & planned (Non-Data) Projects for example, IVR Evolution Desktop / Telephony NBA Reference Architecture Business layer Application Technology Client Business Strategy 37

38 Conclusion Farhana Alarakhiya 38

39 Next Best Action Redguide Download the Next Best Action Redguide as your guide to the solution Share with your C-level executives Understand the solution architecture Learn from case studies across different industries 39

40 Demo: Next Best Action for Telecommunications Operations Speaking with the customer Analytics Building predictive models Defining the Next Best Action Creating marketing offers Information Establishes the Information Supply Chain 40

41 NBA Optimizer Demo 41 41

42 Demo: Next Best Action for Banking 42

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