Competitiveness in Analytics

A lot of discussion, publishing, blogging have happened on the fact that performing customer analytics provides competitive advantages to the organization. However, there has been no specific definition on how this happens. As a result often discussion on analytics revolves around subjective impression of the so called competitiveness. This gives it a elusive nature.

Let me attempt via this post to address how competitiveness can be achieved. Lets say we are doing a cross sell analysis on the customer base. The first analytical step will be to segment the customer (assuming segments are not defined). This will end in identification and definition of the segment. Thus, for a segment called "IT professionals" the definition would be:
Age group: 18-25, 25-35
Income scale: 5 - 7
Product holding: 3 - 5

The next step will be to perform product association or event sequence analysis to understand the typical basket of products or services that this segment consumes. Once this is done, the final step is to score each customer with an "incomplete" basket on the probability of selling additional product to complete the basket. The output will also expose the variables that define the score. Thus we have:

Product last bought: Housing Loan
Location: Metros
and so on.....

Now if I am competitor to this organization, all I need is the information on what variables define high probability of purchase. Thus, in this case, I will go to market to target persons who are typically of profile "IT Consultant" and stays in "Metro" and has recently bought a "housing loan". This list is not impossible to attain. A lot of market research agencies can be deputed to get this list for me. Now, I have a target list which is same as the one that the analytical organization has, after a lot of mining pains, derived for its marketing exercise.

Thus, the information I gleaned from the organization (as defined above) is the competitiveness which I neutralized. This is the competitiveness from analytics.