data visualization and customer segmentation slides 2009

Dr. Richard Hackathorn

Bolder Technology, Inc.

May 14, 2009

Unlock Your Customer Data

with Data Visualization and

Customer Segmentation

Sponsor

Speakers

Richard HackathornPresident and Founder,

Bolder Technology, Inc.

Andrew CardnoChief Technology Officer,

BIS2

R.D. HackathornR.D. Hackathorn


With Data Visualization and


Richard [email protected]

R.D. Hackathorn

A Tough Business Problem

• Knowing your customer Understanding the behavior of your customer

Aligning your products/services to this behavior

• Each customer is different ...whether a person (B2C) or a company (B2B)

...changing with the seasons and phases of the moon

...depending on many unobvious factors

• Customers are not rational but ...

they are predictable

R.D. Hackathorn

Predictably Irrational by Dan Ariely

• Do people make rational decisions? Deep question! What is rationality?

• Our brain tricks us constantly Recent events weight more than past events

A random event that is positive will lead to bad habits

• Customer behavior is a summation of these

irrational decisions

R.D. Hackathorn


• How can you ‘assist’ your customer to... Recognize your product/service, brand, logo?

Match your product/service with their needs/wants?

Decide whether your product/service is worth it?

Make a purchase of your product/service?

• Would it be of value if you knew about: Growth opportunities in customer base

Effectiveness of marketing campaigns

Frequency of visits to revenue and profits

Customers who were ‗overdue‘ for a visit

...and so on

R.D. Hackathorn

An Example – Telecommunications

• Facing cost reductions, evolving technology

alternatives and shifting market niches

• Customer retention

• Service up-selling

R.D. Hackathorn


• If you knew your customer, you could: Develop customized marketing programs

Highlight specific product features

Establish various service options

Design an optimal distribution strategy

Determine appropriate product pricing

Prioritize new product development efforts

Design of new product strategies (packaging, pricing)

• Impacts many functions and levels

across the entire enterprise

R.D. Hackathorn


• Segmenting Compile demographics, etc about customers

Cluster customers based on similarity of attributes

Treat customers within a cluster as the same

• Targeting Choosing segment to target with specific marketing

• Positioning Designing marketing for a specific segment

• Problems with this approach Incomplete and inconsistent data

Clustering algorithms with complex interpretations

Large number of segments

R.D. Hackathorn

It feels like...

You are looking through a keyhole

R.D. Hackathorn

It feels like...

...into a room with

lots of activity

your

customers

R.D. Hackathorn

It feels like...

...but

you really

want to

see like

this!

R.D. Hackathorn

Need for a New Paradigm

• How do you distill meaning out of data? Lots of data, powerful query/report tooling

• Computational-centric analytics Analysis comes from processing algorithms

Such as data mining tools, predictive analysis...

• Visual-centric analytics Analysis comes from visual perception

...But a new generation of visual tools

R.D. Hackathorn

Toward Visual-Centric Analytics

data warehouse

visualization

computational-centric

computation

R.D. Hackathorn

data warehouse


data warehouse

computation

visualization

computation

computational-centric visual-centric

R.D. Hackathorn


• Achieving the balance

R.D. Hackathorn

Cross-Levels and Cross-Functions

data warehouse

strategic

tactical

operational

cross-levels

computation

R.D. Hackathorn

Cross-Levels and Cross-Functions

data warehouse

computation

strategic

tactical

operational

data warehouse

computation

cross-levels cross-functions

marketing

sales

manufacturing

R.D. Hackathorn

Visualizing Cross-Enterprise

data warehouse

computation

typical

R.D. Hackathorn


data warehouse

computation

data warehouse

computation

typical depth across levels

R.D. Hackathorn


data warehouse

computation

data warehouse

computation

data warehouse

computation

typical depth across levels breadth across functions

R.D. Hackathorn

The Power of Seeing

• Seeing the business value Closely coupled to the business value chain

Naked data that shows business dimensions

• Seeing the whole picture Data in context with overview and detail

High-density content in shape, texture, color...

R.D. Hackathorn

The Power of Seeing

• Seeing in a glance Intuitive perception...once trained

Stimulating the ‗a ha‘ moments

• Seeing as a group Decisions made across functions and across levels

Resulting in coordination across the enterprise

R.D. Hackathorn

A Tough Business Problem – Wrap-up

• Knowing your customer Understanding the behavior of your customer

Aligning your products/services to this behavior

• Seeing your customer behavior Perform a value-based customer segmentation

...Using visual-centric analytics

...Gaining insights into behavior of specific customers

• Telecommunications... Finding the good customers who will probably flip

Offering the right service to the right customers

26

TM


With Data Visualization and


Andrew CardnoCTO, BIS2

27Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc.

All Rights Reserved.

May 2009

Introduction to Super Graphics

SPATIAL TEMPORAL PIVOTAL

QUARTAL INSPATIAL



May 2009

EDW

CRM, 3rd Party BI Tools & Other

Applications

XML

Access the vizbybis2 GUI or use

vizbybis2 as a mashup

Directly access the data e.g.

• Regular queries

• Spatial queries & functions

Example Super GraphicsTM

Easily identify patterns and meaningful

relationships in the data

Present Visualizations

Query DataMillions of customers:across Thousands of branches / locationsdoing Millions of transactionswith Billions of interactionsbuying Thousands of products / servicessupplied by Thousands of vendorsdue to Thousands of Promotionsserviced by Thousands of employees

Present the results visually

using Super Graphics.

vizbybis2 is a highly

configurable tool.

Allows you to directly

query the database.

EDW friendly because it

works on the data in place.

Introduction to Super Graphics



May 2009

Enhancing Your Customer Data

Demographic & other data

+zip codes, roads,

polygons etc.

BIS2 SpatialXchange

Mashup on context maps (such as GoogleTM Maps which

accelerate deployment and are continuously updated).

Spatially visualize your database!



May 2009

Using Industry Solutions to

Unlock Value

retailVizTM

…see and understand: customer bahaviors, instore management, channels, campaigns, SCM…

insuranceVizTM

…see and understand: customer profitability, claims, risk factors, cross-sell / upsell, agent performance, lapses…

telVizTM

…see and understand: customer revenue, lifetime value, churn, network performance, campaign effectiveness…

entertainmentVizTM

…see and understand: customer preferences, distribution management, promotions…

manufacturingVizTM

…see and understand: demand, costs, operational efficiency, resource management, production/supply risks…

moneyVizTM

…see and understand: customer profitability, financial risk, customer retention, competition, costs, customer interactions…

gameVizTM

…see and understand: how to optimize revenue, factors that influence what customers play, rate of play, when, how long, where…



May 2009

Good Customer Segmentation

is the Key to Unlocking Value

Dimension Reduction

Identify Noise Clusters Cluster Remainder

DA

TA Clustering



May 2009



Dimension Reduction


DA

TA Clustering

Visualize from WHOLE to PART

Use Clusters to Build

Super Graphics

Understand All

• Marketing Results

• Responders

• Related to Physical Location

VIS

UA

LIZ

AT

ION

Clusters of results

Dimensional Analysis

Cyclical patterns of clusters

Deep customer insights of clusters

Inside customer interactions based on clusters



May 2009

Key Business

Performance

Drivers (BPDs)

Percent (%) of whole or other

variable – where are the

variations from the whole

For example, A map showing

percent (%) of responders

against whole

Understanding through Super Graphics to develop insightsINS

IGH

T



Dimension Reduction


DA

TA Clustering

Visualize from WHOLE to PART

Use Clusters to Build

Super Graphics

Understand All

• Marketing Results

• Responders

• Related to Physical Location

VIS

UA

LIZ

AT

ION

Clusters of results

Dimensional Analysis

Cyclical patterns of clusters

Deep customer insights of clusters

Inside customer interactions based on clusters



May 2009

Spatial – Spatial Xchange (Story 1)

BIS2‘s Spatial

Xchange provides

key geospatial

data for BIS2 and

Partner

customers.

The geospatial

data is ‗load-ready‘

with Super

Graphics from

BIS2.



May 2009

Spatial – With Customer

Segments (Story 2)

Analysis of revenue and profit by customer segment, product and ZIP Code - Using

the vizbybis2 Spatial Super Graphic, show any predominance for revenue and profit by

ZIP Code. CLUSTER #1

CLUSTER #2

Example questions include:

• Are there any regional variations in consumption? And consumption over time against any national trends? This could be against the norm and/or revenue value per head of population.

• Is there any region which is a leading region? We could use the take-up or churn from any leading segment, what will it look like in five years?

CLUSTER #3



May 2009

Temporal – Call Patterns (Story 3)

Understanding call volume patterns against network utilization - Using the Temporal

Super Graphic, show call volume patterns against network utilization to better optimize

network utilization and reduce costs.


• Network utilization by all products and by product line.

• Network utilization by all customers and by customer segment.

• Network utilization by all geographic areas or particular geographic areas.

• Network utilization - % from mean – areas of the network.

• Network utilization – product line or customer segment increase/decrease year-on-year.

Network Utilization –

2001 - 2008



May 2009

Pivotal – Call Routing (Story 4)

Understanding call routing patterns - Using the vizbybis2 Pivotal Super Graphic, show

call routing patterns to better understand and optimize interconnect pricing and costs.

Inte

rco

nn

ec

t

Ag

ree

me

nt


• Call routing by all interconnect agreements and specific interconnect agreements.

• Call routing by cost by product line.

• Call routing by cost by customer segments.

• Call routing costs - % from mean.

• Call routing costs – product line or customer segment increase/decrease

year-on-year.

Time or customer segments or product lines (over the network)



May 2009

―Old

er‖

Custo

me

rs

―Ne

we

r‖

Custo

me

rs

Rank Average Revenue Per User (ARPU)

Per Year

Split by Revenue

Low ARPU High ARPU

1

32

0

0. Top left:

(Older customers and low ARPU)

Customers who have been with us a long

time and have a low revenue per user.

1. Top right:

(Older customers and high ARPU)

Customers who have been with us a long

time and have a high revenue per user.

2. Bottom left:

(Newer customers and low ARPU)

Customers who have been with us a short

time and have a low revenue per user.

3. Bottom right:

Newer customers and high ARPU)

Customers who have been with us a short

time and have a high revenue per user.

# History means the length of time someone has been a

customer. An ―older‖ customer means that they have been a

customer for a relatively longer period, than a new customer.

Each quadrant is split by an equal amount of revenue.

@ Alternatively, could be split by ARPU.

Ran

k H

isto

ry#

Sp

lit

by R

even

ue

@Quartal – Customer Revenue (Story 5)

Identifying customer segment opportunities:



May 2009

Quartal – Customer Segmentation

(Story 6)

Cluster 1 Cluster 2

Cluster 4Cluster 3

Rank Revenue Per User (ARPU) Per YearSplit by Revenue

Ran

k H

isto

ry#

Sp

lit b

y R

even

ue@

Differences in customer

behavior—by customer

segment—can easily be

seen when the customer

segments are displayed

in the Quartal Super

Graphic.

The ability to change what is

displayed on the x and y axis

of the Quartal picture makes

the Quartal Super Graphic a

powerful and intuitive

customer segmentation,

selection, and analytical tool.



May 2009

Wrap-up

• Unlocking business value—fast and

economically.

• Volume, velocity and variety of data requires

new approaches.

• Good customer segmentation is the key to

unlocking value.

• Super Graphics enables you to unlock your

customer data.

Questions?

Speaker Contact Information

• If you have further questions or comments:

Richard [email protected]

Andrew Cardno, BIS2

[email protected]

data visualization and customer segmentation slides 2009

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