Reading Customers Needs and Expectations with Analytics. Vasilis Aggelis Senior Manager, Head of Customer Analysis Sector

Transcription

1 Reading Customers Needs and Expectations with Analytics Vasilis Aggelis Senior Manager, Head of Customer Analysis Sector

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4 Piraeus Group timeline 4

5 Piraeus Group Overview 5

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7 Customer Segmentation & Cross Sell Scope Plan a strategic model that focus on developing: 1. current and new individual customers 2. banks product portfolio Scope and Target is accomplished, through Retail Banking Business Development Know how into: 1. Customer Analysis (more than 50 different analysis of customer targets and product groups using Analytics) 2. Strategic Analysis (Next Best Product, Cross Sell Ratio and many more, using Analytics) Target 1. Customer-centric strategy 2. Growth of Retail Banking Customers 3. Customer Utilization (Implementation of all commercial and communication criteria, propensity scoring) 4. Administration of B.T.L. channels (CSA, ATM, SMS, , e-banking) 5. Results measurement, evaluation of findings and direct implementation of improvements Page 7

8 Segmentation Main Individuals (Greece) More than 2 million distinct main individual customers Financial Institutions Non Profit Institutions Public Organizations Ex staff Piraeus Bank Group staff Bank s staff Private Enterprises Indirect & Historic Individuals Main Individuals SEGMENTATION Page 8 New Individual Customers

9 Customer Segment Criteria Setting criteria of customer segments: Market & Commercial Potential Clear Definition & Measurement Capability of Planning a Customer-Centric Approach and Communication Product Portfolio Increase Piraeus Bank structure, for example Agricultural Sector (Farmers), Payroll Sector (Payroll Customers)

10 Example of Segment: x_name Customers Customers Identity Share in total size of Main Individuals x.xx% Gender Μ: xx% - F: yy% Deposit & Credit Balance Share x.xx% in Deposits and Investments x.xx% in Credit Products Active Product Avg. : x.xx Active Arrangements Avg.: x.xx Cross Sell Ratio: x.xx Up Sell Ratio: x.xx R.F.M. 2 nd Semester 09 : Big Relationship Age x.xx Launch Sales: x.xx Customers Indicators Channels Individuals Customers Share Products Channels 2 nd semester of 2009 Branch: xx% ΑΤΜ: yy% INTERNET: zz% APS: ww% POS / epos: vv%

11 Example of Segment: Active Payroll Customers Customers Identity Inactive Customers* xx% Individuals Active Product Avg. : x.xx Active Arrangements Avg.: x.xx Cross Sell Ratio: x.xx Up Sell Ratio: x.xx Launch Sales: x.xx Products % of product holders: Depostis: xx% Time Deposits: xx% Other investments: xx% Credit Cards: xx% Consumer Loans: xx% Home Loans: xx% Open Loans: xx% E-Banking: xx% Direct Debits: xx% Insurance Products: xx% Debit Cards: xx% * Customers with no R.F.M. Score in the 2 nd semester of 2009

12 Example of Segment: Active Payroll Customers 33% 23% 4% >=10% >=2% >=1% <1%

13 Cross Sell Ratio Calculation Starts AFTER Launch Sales n i 1 ( i Ei) CSR = n Πi : Total number of Distinct Basic Products ever sold to individual customer i Ei : Total number of Distinct Basic Products that sold the same date with customer s registration n : Total number of Distinct Customers with main relation, independently status

14 Up Sell Ratio Calculation AFTER launch sales n i 1 ( i i Ei) USR = n Πi : Total number of Distinct Basic Products ever sold to individual customer i Ai : Total number of Distinct arrangements ever sold to individual customer i Ei : Total number of Distinct Basic Products that sold the same date with customer s i registration n : Total number of Distinct Customers with main relation, independently status

15 SWOT Analysis Strengths Customer - Centric & Targeted communication Bank s Product portfolio utilization. Aiming commercial value offers, according to customer profile and needs (we support and contribute to product development) Opportunities Customer centric approach & Customer centric communication turn Customer and product targeted utilization Weaknesses Absence of Customer centric approach Product structure according to customer segments needs Threats Product Oriented Culture and Mentality Financial Crisis

16 That might be a problem OUR CUSTOMER WE OUR COMPETITORS OUR PROBLEM

17 Bridge for our customers Let s make our customers, fans of Piraeus Bank, proving the right of their choice. Acquisition (Launch Sale) Customer selects our bank and his buying history starts. Retention (Cross Sell) We focus on customer retention, selling products (cross sell) from our product portfolio based on their needs. Loyalty (Up Sell) Our customers feel safe and comfortable and we can easily increase their product portfolio (up sell). Sharks (competitors) skulking. Choice Competitors Safety

18 New Culture as was Total customer base Clean customer base Customers with product Target slightly changeable number of customers, same customers were contacted continuously Total customer base Clean customer base Communicated Customers Target 1. Bigger number of customers 2. Segmented 3. Not communicated 4. Clean customers

19 Retail Banking Development Strategic Model Implemented in all customer-centric platforms and applications 8 Segments more than 2 million unique customers (Run every 6 months) With prioritization Basic Measurements for each segment Sales Launch Sales Ratio Cross Sell Ratio Up Sell Ratio Commercial Value Offer for each individual customer + targeted campaigns Activity Active Products Active Arrangements

20 Customer Segmentation and Commercial offer on ICE 360 view on ICE (Live from 13/7/2010) Imprinting of customer segment and commercial offer in the front customer screen on ICE (360 view)

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22 Starting Point K.R.I.O.S. Model ROLES STEPS KNOWLEDGE BUSINESS CUSTOMER, COMPANY COMPANY 8. Take (competitive) advantages 7. Make actions BENEFITS, PROFIT TOP MANAGERS DM, BI ANALYST 6. Take decisions 5. Find Hidden Knowledge INTELLIGENCE (SALES) DIRECTORS 4. Get information INFORMATION IT / ANALYST 3. Design Repository and ETL process ANALYST 2. Understand and Organize DATA CUSTOMER 1. Collect and Explore

23 The Lamp Example

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25 Our Business Process Business Case Modeling Execution Clustering Prediction Association Rules etc. Education Model Suitability Constant modeling repetition in predefined Redesign (if needed) periods (yearly, every 6 months, monthly) Segmentation Conclusions Suggestions Results Evaluation Distribution Profit Benefit Actions Decision

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27 Case 1 Customer Segmentation Understanding Piraeus Bank Consumers we used Analytics to identify our customers preferences based on the means of payment they prefer most transaction channels they use more

28 Case 1 Customer Segmentation Understanding Piraeus Bank Consumers Scope: Segment all our customer base in order to: find the best communication channel or combination of channels suggest better ways to control and perform their transactions locate shopping areas, they visit often and examine whether or not it worth opening a Self Service Branch

29 Case 2 Customer Segmentation Allocate the Next Best Product for each customer We segmented our customers using Analytics, based on : their life stage gender location of residence duration of being active customers

30 Case 2 Customer Segmentation Allocate the Next Best Product for each customer We found 48 different customer segments! For each segment we defined the sequence of product purchase. Now, we have available more than different rules to define which is the next best product for each customer

31 Case 3 Product Development Building New Product Based on Customer Behavior The Regular Saver

32 Case 3 Product Development The Regular Saver Scope: Utilize customer data using Analytics to develop new deposit product with the goal of increasing banks market share and assets and, of course, achieving new customer acquisition

33 Case 3 Product Development New Saving Account MPORO launched on March 2011

34 Case 4 Product Development Building New Product Based on Customer Behavior Frequent Traveler

35 Case 4 Product Development Frequent Traveler Scope: Utilize customer data using Analytics to develop new insurance product aiming to attract our traveler customers. In addition, offer it as an extra service to our high value Bank customers, free of charge.

36 Case 5 Customer Behavior Focusing on Customer Deposit Behavior

37 Case 5 Customer Behavior Customer Deposit Bahvior Scope: Utilize data using Analytics to understand trends and patterns in any customer s overall deposit balance change and categorize them in distinct groups. Additionally to our commercial offer we have the ability to strengthen our costumer commercial approach.

38 Case 5 Customer Behavior 360 view on ICE (Live from 11/7/2011) Imprinting of customer deposit behavior in the front customer screen on ICE (360 view) with words, graphs and assets

39 Case 5 Customer Behavior Orange line: Deposit closing balances for the last 7 months Blue line: Average deposits balances for the last 7 months 743 : total semester deposits change +54,04%: percentage semester deposits change

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41 Value for the bank Right Offers A B C Right Customers Right Channels Right Time Time Reduce Advertising Cost + Reduce valuable human hours + «Better» Sales + Better Results

42 Benefits Value for the Bank 1. Increased cross-sell ratios 2. Improved response rates on marketing campaigns 3. Cost and time savings 4. Improved customer satisfaction and retention Page 42

43 Basic Measurements Results after the implementation of Customer Segmentation and Commercial Approach July 2010 Segmentation & Commercial Offer, live On ICE + 3% Active Products December ,6 % Active Arrangements

44 Our 2010 Campaign Response Ratio Target Distinct customers Responders Percentage of responders Πελάτες σσνολικά έτοσν λάβει επικοινωνία και έτοσν ανταποκριθεί θετικά στην πρότασή μας ,45% respond rate till Aug ,5% 3,1% ,7% 1,7% 1,7% 1,4% 4,1%

45 Our 2010 Campaign Results We contact Customers Customers * 2009 *: : : % less customers than % less than our target They respond 2010 : % more customers than % more than our target R.R. * 2009 : 1,4% 2010 : 8,9% +536% better R.R. than % better than our target *till Aug 2009

46 2010 Campaign and communication cost cost reduction: -78%

47 Value for bank s customers Satisfied Customers Get Information and Offers that are interested in, Buy products, Fulfill their needs, Mutual trust

48 Success Factors 1 Customer Centric Model Adoption 2 3 Understanding of Segmentation Advantages Full utilization of Bank s customer centric platforms and applications 4 5 Customer centric campaign management planning Targeted customer selection using propensity models 6 Selection of most appropriate channel mix for each campaign 7 8 Introduction of new communication model through a new designed personal tool for every branch employee Direct implementation (after filtering) of information and experience, that we receive from branches Page 48

49 Six Principles for Success Have vision Face the truth Forget numbers Feel your customer Take action Co-operate with your colleagues

50 Thank you for your attention! Any Questions?