2005 Harbinger TechAxes PVT. LTD.
Analytical CRM solution
Analytical CRM solution
for Banking industry
for Banking industry
Insights about customers
What are my customers product holding
patterns? What are the
reasons and freq.
for a customer contact?
What is the revenue earned from a customer? What is the risk
profile of my customers?
3 2005
Customer is key
• According to industry estimates, in a typical bank
20 percent of the customers represent 80
percent of the profits.
• Additionally, a 5 percent increase in customer
retention can produce an increase in profits
between 25 percent and 130 percent
What is Analytical CRM?
• Helps organizations to process information effectively to
provide customer intelligence and to use this intelligence
to drive differentiated treatments.
• Profitability analysis
• Customer segmentation
• Campaign Management System/ Cross selling
• Loyalty marketing
• Channel Analysis
5 2005
CRM technological upgrade curve
Technology
Upgr
ade
Raw Data Raw Data Basic Canned Basic Canned Reports Reports Multidimensional Multidimensional Analysis Analysis Descriptive Descriptive Modeling Modeling Predictive Predictive Modeling Modeling Extract Transform Load Online Analytical Processing Advanced Mining Tools Customer Data Customer Data Integration Integration Report Writer ANALYTICAL INTELLIGENCEWhy it has happened
BUSINESS INTELLIGENCE
What will happen
BASIC INTELLIGENCE
What has happened
Evolving of CRM Analytics
Product Product Information Information Product Product Profitability Profitability Customer Customer Integration Integration Customer Customer Profitability Profitability Customer Customer Segmentation Segmentation Campaign Campaign Management Management System System Customer Customer Loyalty Loyalty Customer Customer Life Time Value Life Time ValueValue Up
grade
Focus shifting from
Product to Customer
7 2005
Characterization of CRM maturity
Stage 1
• Customer Profitability
• Customer Retention
• Customer Segmentation
• Campaign Mgmt
• Proactive
Stage 2
• Customer Life Time Value
• Customer Loyalty
• Channel Viability
• Real time & Predictive
Segment the customers to gain insight
9 2005
Customer Cost versus Value
Lifetime cost of customer
Lifetime
value of
customer
HIGH VALUE
LOW COST
“earners”
LOW VALUE
LOW COST
“sleepers”
LOW VALUE
HIGH COST
“drainers”
HIGH VALUE
HIGH COST
“screamers”
Reduce cost through automation
Need to segment the customers
• Customer segmentation
– Process of figuring out which differences and similarities are
most significant across all customers
– And then to divide the customer base into groups based on
relevant distinctions
• Analytical CRM enables organizations in
– Capturing & analyzing large bodies of timely data
11 2005
Ways to segment the customers
Life Life Stage Stage Lifestyle Lifestyle Psycho Psycho- -graphic
graphic NeedsNeeds state state Loyalty Loyalty Buyer Buyer Behavior Behavior Channel Channel Behavior Behavior Technology Technology users users Customer Customer Profitability Profitability Product Product holding holding
Customer
Customer
Segmentation
Segmentation
Benefits of gaining insights on customers
• Relationship view of a customer vs. Account view
– Maximize profits for a relationship than a transaction
• Tailor different strategies for different segment of
customers
• Track each & every event with the customers
– Maximize value of customer to the enterprise
13 2005
Cross Sell List Generation
Cross sell Lists
• Product A to Term Product B and C customers • Product B to Product A & C customers • Product C to Product A and Product B customers SOURCE SYSTEM – Product A SOURCE SYSTEM – Product B SOURCE SYSTEM –
Product C IntegrationIntegrationCustomer Customer
Sales Tele Callers Service Executives Tele-marketing Initiate a need analysis/ win back
program via Relationship Mgr System identifies a significant reduction in holdings
System checks for spend less than 50000 within
first 3 months The Inquiry is captured Systems monitors data warehouse for purchase. If no purchase within 14 days
Call Customer to check for satisfaction/
problem/ engage Follow up with Direct Mailer/
Tele-marketing Execution
Customer Action CRM System
A potential High Value Customer makes a Product Inquiry A Potential High Value Customer Opens a Cr Card Account A High Value Customer Decreases holdings by 80% Acquisition Campaign Acquisition Campaign Stimulation Campaign Stimulation Campaign Win
Win--back Campaignback Campaign
15 2005
One on One Cross sell
• Right customer
– Select the perfect customer
• Relevant communication
– Personalization of communication
• Right product
– Right product being cross sold
– Right price
• Through the relevant channel
– Channel through which customer is most likely to accept the
offer
Recognition
Silver Card
Impact on
loy
a
lty
Engagement
Gold Card
• CRM-driven marcomms
• Customized soft benefits
• Improved offerings
BI Infrastructure for Loyalty marketing
17 2005
The Multi-channel interaction
ATM
Net Banking
Bank by phone
Branch
Value to customers
The Channel Analysis
Banks need to analyze their customers database and figure
out the following:
•
Value proposition of a channel to a customer
•
Cost of using each channel for various transaction
– Staffing costs
– Premises costs
– Infrastructure costs
– Technology costs
– Advertising costs
– Miscellaneous cost
•
Strategic value of a customer (Revenue / Profit)
•
Based on the above banks need to come up with different tariffs /
price plans for various segments of customers
– Migrate low value customers
19 2005
TechAxes Analytic Model
Call Center Phone Client Branch Client TechAxes
Data Analytics
Data Warehouse Data Marts
Data mining Data mining
Business Operations
Self-service Client
Marketing Sales Customer Service
ATM
Life
Life--time valuetime value ProfitabilityProfitability ReportingReporting
Customer Core Banking System
Sales Force Automation Campaign Management Order Manage-ment System Customer Support System Enterprise
Re-source Planning Contact Mgmt System
Customer Centric Model
Extraction / Transformation / Loading
21 2005
