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.
Thursday, June 05, 2008
Monday, October 22, 2007
Beware of Customer Expectations
Today morning, as part of my job, I visited the technology office of a bank in my work city. This visit reminded me of my relationship with them over 7 years back. Then I was a software project manager in my previous company. As a typical software professional from India, I was required to travel to different geography based on the location of my client.
During this period I was posted to a branch in southern most part of Mumbai. There was only one ATM nearby. This belonged to the bank I had visited in the morning. I called up the call center and expressed my interest in opening a savings account with the bank. The call center agent took down my contact details and stated that a representative from the bank will be contacting me before the end of the day.
True to her work, I got a call from the bank representative in the noon and he landed up at my office around late in the afternoon. I handed over my identification papers and the initial cheque to open the account. When it came to filling up the customer acquisition form, the representative just asked me to sign the form and mentioned that he will fill it from the information available in the identification papers. I was impressed.
He mentioned that the welcome kit will be delivered within 7 working days. Again, true to his word, on day 4 I received my welcome kit containing my cheque book as well as the ATM card. Again, I was impressed.
I had a lovely relationship with the bank while it lasted. I still do not know which branch owned my account. All requests were handled over the phone. Again, I was very impressed. I recommended this bank to everyone I knew.
Then, I was drafted to an onsite project. This meant I was not transacting anymore. But I did maintain my minimum balance as required. After sometime, the bank deactivated my account. I called them and requested that they re-activate my account. They asked me to come to their branch and apply for reactivation of my account. I explained that I was on an onsite project and cannot visit the branch. The agent was cold in her response that I have to come to the branch and they cannot help me otherwise. After a few such followups, I was frustrated and stated that I would like to terminate my relationship. The response I got "for that also you have to visit the branch".
After a couple of months, the bank started deducting a "inactive charge" from my account every month. This led to my balance falling below the required minium. This led to the bank making additional deduction as "non maintenance of minimum balance". In the next 6 months, my entire balance was wiped off.
It was real sad that the bank started at such a high note on customer service and satisfaction. But failed in their process when it was really needed. I blame the acquisition process of the bank which set up such excellent acquisition process that I had very high recommendation of the bank. But now, I tell everyone to beware of the bank.
During this period I was posted to a branch in southern most part of Mumbai. There was only one ATM nearby. This belonged to the bank I had visited in the morning. I called up the call center and expressed my interest in opening a savings account with the bank. The call center agent took down my contact details and stated that a representative from the bank will be contacting me before the end of the day.
True to her work, I got a call from the bank representative in the noon and he landed up at my office around late in the afternoon. I handed over my identification papers and the initial cheque to open the account. When it came to filling up the customer acquisition form, the representative just asked me to sign the form and mentioned that he will fill it from the information available in the identification papers. I was impressed.
He mentioned that the welcome kit will be delivered within 7 working days. Again, true to his word, on day 4 I received my welcome kit containing my cheque book as well as the ATM card. Again, I was impressed.
I had a lovely relationship with the bank while it lasted. I still do not know which branch owned my account. All requests were handled over the phone. Again, I was very impressed. I recommended this bank to everyone I knew.
Then, I was drafted to an onsite project. This meant I was not transacting anymore. But I did maintain my minimum balance as required. After sometime, the bank deactivated my account. I called them and requested that they re-activate my account. They asked me to come to their branch and apply for reactivation of my account. I explained that I was on an onsite project and cannot visit the branch. The agent was cold in her response that I have to come to the branch and they cannot help me otherwise. After a few such followups, I was frustrated and stated that I would like to terminate my relationship. The response I got "for that also you have to visit the branch".
After a couple of months, the bank started deducting a "inactive charge" from my account every month. This led to my balance falling below the required minium. This led to the bank making additional deduction as "non maintenance of minimum balance". In the next 6 months, my entire balance was wiped off.
It was real sad that the bank started at such a high note on customer service and satisfaction. But failed in their process when it was really needed. I blame the acquisition process of the bank which set up such excellent acquisition process that I had very high recommendation of the bank. But now, I tell everyone to beware of the bank.
Monday, October 01, 2007
Data Driven Company
"We are a data driven company"
I bet you have heard the above sentences infinite number of times. The speakers often mean that they have processes instituted for decisions to be taken based on facts and hard data rather than pure intuition.
My job entails selling customer analytics solutions. Analytics is dependent on the richness of data available to be mined. The availability of data is often the toughest challenge. Since most transactions systems were designed for just easing the transactions, they only collect information necessary for completing the transactions. During the time of selecting transaction systems, analytics was nowhere in sight for the evaluation criteria. So it is no surprise that data needed for analytics are not available within a company.
But what often surprises me, or let me say amuses me, is the attempt by the clients to run the "best" analytics on the available data. I was shocked to hear from one senior executive the statement "but all we have is 3 fields on customer data". This executive wanted a solution which will work on the 3 fields and not demand additional data. He claimed that his customer did not give more data.
Now why should a customer part with any more information than is needed? Let me illustrate this by my personal experience with buying automobile insurance in USA and India. India has a standard rate card. So I am not enticed nor am interested in giving any more information than is mandated for the insurance cover. Whereas, in the USA, I know that certain information, like marriage and family will help me get a lower premium. So I am happy to part with that information. I asked the same question to this execution "What has the customer to gain by giving you additional information? Why should he give you additional information?".
The company could have provided additional or special privileges to the customer based on certain information. This would have enabled them to get more information from the customer. The cost of this information could have been justified by the richer analytics that could be run on the customer data.
Just stated that we have limited data is not an excuse. It reflect poor foresight of the company. You cannot let the limited data drive your future activities. You need to enrich your data collection to meet future business needs.
I bet you have heard the above sentences infinite number of times. The speakers often mean that they have processes instituted for decisions to be taken based on facts and hard data rather than pure intuition.
My job entails selling customer analytics solutions. Analytics is dependent on the richness of data available to be mined. The availability of data is often the toughest challenge. Since most transactions systems were designed for just easing the transactions, they only collect information necessary for completing the transactions. During the time of selecting transaction systems, analytics was nowhere in sight for the evaluation criteria. So it is no surprise that data needed for analytics are not available within a company.
But what often surprises me, or let me say amuses me, is the attempt by the clients to run the "best" analytics on the available data. I was shocked to hear from one senior executive the statement "but all we have is 3 fields on customer data". This executive wanted a solution which will work on the 3 fields and not demand additional data. He claimed that his customer did not give more data.
Now why should a customer part with any more information than is needed? Let me illustrate this by my personal experience with buying automobile insurance in USA and India. India has a standard rate card. So I am not enticed nor am interested in giving any more information than is mandated for the insurance cover. Whereas, in the USA, I know that certain information, like marriage and family will help me get a lower premium. So I am happy to part with that information. I asked the same question to this execution "What has the customer to gain by giving you additional information? Why should he give you additional information?".
The company could have provided additional or special privileges to the customer based on certain information. This would have enabled them to get more information from the customer. The cost of this information could have been justified by the richer analytics that could be run on the customer data.
Just stated that we have limited data is not an excuse. It reflect poor foresight of the company. You cannot let the limited data drive your future activities. You need to enrich your data collection to meet future business needs.
Tuesday, July 03, 2007
Who owns the company?
Hi, I know i promised to post regularly. I know I have not done so for a loooong time. I got a new job and have been very very busy fitting in. Lets hope things settle down soon. Now back to the post.
I was in the reception area of one of the banks. This bank has a very impressive building as its head office. I was watching as a middle aged lady walked in. She was followed by two other ladies and a kid in tow. She was coaxing them to follow her.
It was at that moment that the security head happen to notice this small group. They were admiring the massive interiors .. which also boasts a 3 floor water wall along its walls (now that should give away the identity of the bank). The security asked them what they were doing. The lady replied that they were visiting the bank's branch and starting walking towards the area where the entrance to the branch was located.
Now the building has a branch outlet on the ground floor. It has an entrance from the outside. As well as an entry from the reception area. The lady obviously knew about this internal area too. She wanted to show the lovely structure to her accomplices. And she was very proudly showing it off too. Just as a housewife likes to show off a new furniture in her house.
The security head refused to allow the group to continue and asked them to leave the building and enter the branch from the external entrance. Everyone seemed a bit upset over this.
I found it very annoying that me and others who were visitors (some business and some personal) were allowed to loiter in the reception area, but an obvious customer was not allowed to do the same.
Should not the customer feel she owns the company? Will this sense of ownership not increase the loyalty of the customer? Just imagine the proud feeling the lady would have accomplished, if she could have been allowed to complete her journey and show off "her bank" to her friends. Here is one bank which lost one lovely opportunity to give the customer a chance to feel proud of "her bank". Goes back to the old adage that customer relationship is not in process but in the heart and soul of each employee.
I was in the reception area of one of the banks. This bank has a very impressive building as its head office. I was watching as a middle aged lady walked in. She was followed by two other ladies and a kid in tow. She was coaxing them to follow her.
It was at that moment that the security head happen to notice this small group. They were admiring the massive interiors .. which also boasts a 3 floor water wall along its walls (now that should give away the identity of the bank). The security asked them what they were doing. The lady replied that they were visiting the bank's branch and starting walking towards the area where the entrance to the branch was located.
Now the building has a branch outlet on the ground floor. It has an entrance from the outside. As well as an entry from the reception area. The lady obviously knew about this internal area too. She wanted to show the lovely structure to her accomplices. And she was very proudly showing it off too. Just as a housewife likes to show off a new furniture in her house.
The security head refused to allow the group to continue and asked them to leave the building and enter the branch from the external entrance. Everyone seemed a bit upset over this.
I found it very annoying that me and others who were visitors (some business and some personal) were allowed to loiter in the reception area, but an obvious customer was not allowed to do the same.
Should not the customer feel she owns the company? Will this sense of ownership not increase the loyalty of the customer? Just imagine the proud feeling the lady would have accomplished, if she could have been allowed to complete her journey and show off "her bank" to her friends. Here is one bank which lost one lovely opportunity to give the customer a chance to feel proud of "her bank". Goes back to the old adage that customer relationship is not in process but in the heart and soul of each employee.
Wednesday, October 11, 2006
Credit the Customer
One of the challenges when serving a large number of retail customers is communicating policy changes. And if the change involves withdrawing a convenience feature, there is all the more criticality involved. There is a good amount of chance that even if a mailer is sent to all customers, a significant percentage of customers will just ignore it.
A couple of years back, I was in discussion with a outlet manager for a telecom service provider. For some reason, the management had decided to stop accepting bill payments in cash. An insert announcing the same was put into the bills sent out in the previous month. The outlet was instructed not to accept any cash payment and accordingly on the given date the feature in the system was disabled.
The day this was implemented was a day of total chaos in the outlet. Every other customer was in queue to pay his bill by cash. On learning that this feature was withdrawn, they were very frustrated.
At this moment, the outlet manager came out with a solution. He instructed all the counter persons to swipe their own credit cards in lieu of payment of the bill. Whenever a card went over limit, he loaned his own card to the counter person. Thus, not a single customer was turned back.
The following day, he sent a person around to pay all the credit card outstanding by the cash collected the previous day. It took about 3 weeks for the scenario to stabilize and have almost all the customers pay in a non-cash mode.
But, atleast at this particular outlet, during the 3 weeks no customer had to return without payment of bill.
A couple of years back, I was in discussion with a outlet manager for a telecom service provider. For some reason, the management had decided to stop accepting bill payments in cash. An insert announcing the same was put into the bills sent out in the previous month. The outlet was instructed not to accept any cash payment and accordingly on the given date the feature in the system was disabled.
The day this was implemented was a day of total chaos in the outlet. Every other customer was in queue to pay his bill by cash. On learning that this feature was withdrawn, they were very frustrated.
At this moment, the outlet manager came out with a solution. He instructed all the counter persons to swipe their own credit cards in lieu of payment of the bill. Whenever a card went over limit, he loaned his own card to the counter person. Thus, not a single customer was turned back.
The following day, he sent a person around to pay all the credit card outstanding by the cash collected the previous day. It took about 3 weeks for the scenario to stabilize and have almost all the customers pay in a non-cash mode.
But, atleast at this particular outlet, during the 3 weeks no customer had to return without payment of bill.
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