Predictive Analytics for Intelligent Campaign Execution
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1 White Paper Predictive Aaytics for Iteiget Campaig Executio Orgaizatios i today s word aways try to brig i efficiecy ad rigor i every aspect of their fuctioig. Levers used coud be adoptio of best practices, impemetig recommedatios of extera cosutats, haressig i-house ideas, Iformatio Techoogy to aid i faster decisio makig etc. There is a perceptio, (which might be true to a extet) that impemetig oe or a of these evers wi provide a competitive advatage i the idustry. I this digita word, where the barriers to the fow of iformatio are imited, Orgaizatios have reaized that aythig that is a differetiator today wi become a idustry practice withi a short spa of time. This is especiay true for the compaies i the High Tech space As a resut of this; Orgaizatios are i the costat search of ewer evers which wi provide them with a competitive advatage (abeit for a short spa). Predictive Aaytics is a cocept based o usig aaytica techiques to study the curret/historic data ad appyig the earig to make decisios about the future. It fids appicatios i a areas of a orgaizatio ad is oy imited by the kowedge/eeds of the various stakehoders. The objective of this white paper is to provide isights o how Predictive Aaytics ca be utiized as aother ever by marketig departmets to buid i Iteigece ito the executio of campaigs, specificay for compaies i the High Tech idustry. Our experiece shows that Iteiget Campaig Executio has resuted i icreased campaig respose rates (2X 3X) ad improved opportuity idetificatio for our customers.
2 About the Author Arvid Mahishi R PGDM (IIM Luckow), BE (Natioa Istitute of Egieerig, Mysore) Arvid Mahishi is currety workig i the area of marketig aaytics for a eadig eterprise software maker. He hods a MBA i Marketig ad Fiace ad has cose to 8 years of experiece i Marketig Aaytics, Busiess Deveopmet ad Project Maagemet. He has worked o severa statistica toos ad techiques that are used to support marketig campaigs ad improve database marketig effectiveess. 2
3 Tabe of Cotets 1. Itroductio 4 2. Predictive Aaytics across the Orgaizatio 5 3. Iteiget Campaig Executio 6 Propesity Modes 7 Market Basket Aaysis TCS Soutio 11 Case Study The Road Ahead Appedix 14 A. Toos 14 B. Pre-Requisites 14 3
4 Itroductio Aaytics is the buzz word today. Busiess Aaytics ad Eterprise Aaytics are some of the key words that are see i the media. Aaytics focuses o gatherig the data avaiabe i the orgaizatio, refiig, structurig ad presetig it i a maer that wi eabe better decisio makig. The focus of aaytics is ow shiftig beyod the ream of providig iteiget views of the data i a orgaizatio. It is beig see as a mechaism that wi utiize this data ad provide recommedatios for sovig busiess probems. This trasitio from a Decisio Support to a Decisio Recommedatio mechaism has bee brought by the advacemets i toos ad icreased awareess amog idividuas. The widespread adoptio of Iformatio Techoogy across a fuctios of the orgaizatio have provided a sigificat boost to this trasitio by providig data i a more orgaized way, rather tha i sios as earier. The combiatio of too advacemet ad awareess has resuted i orgaizatios ivestig i stregtheig capabiities i this area with a view to utiize data avaiabe to icrease their fuctioa efficiecy. The white paper provides a overview of Predictive Aaytics ad its appicatio i differet areas of the orgaizatio. The appicatio of Predictive Aaytics to eabe Iteiget Marketig Campaig executio, with isights o how this was everaged by a eadig busiess software maker is aso provided. The paper eds with a discussio o how iformatio beyod traditioa data sources wi be everaged by Predictive Aaytics to make Marketig Campaig executio Iteiget ad socia. 4
5 Predictive Aaytics across the Orgaizatio The appicatio of Predictive Aaytics i differet departmets of the orgaizatio is gaiig tractio, with orgaizatios feeig the eed to utiize a the avaiabe data effectivey ad success stories of Predictive Aaytics becomig more widespread. Appicatio of Predictive Aaytics across differet orgaizatioa fuctios is preseted beow: Saes & Marketig Territory Maagemet, Warraty Aaysis, Idetificatio of Up-Se ad Cross Se Opportuities, Idetificatio of New Customers, Market Mix Modeig Operatios Ivetory Optimizatio, Suppy Chai Aaytics, Productio Paig Fiace Risk Maagemet, Credit Moitorig, Fiacia Modeig Huma Resources Attritio Modeig, Performace Modeig Whie the scope of adoptig Predictive Aaytics i a orgaizatio is preset across a departmets, the degree of adoptio of Predictive Aaytics to a extet is determied by the ature of the busiess the orgaizatio is i. For e.g. Logistics compaies Leverage aaytics aroud suppy chai to a sigificat extet compared to baks where the focus is more o Risk Maagemet Aaytics. Sice compaies i the same ie of busiess wi be more or ess matched i terms of adoptio of Predictive Aaytics for core areas, there is a cocerted effort to fid ewer veues for adoptio, to gai a competitive advatage. Whie departmets of compaies i the High Tech space face differet chaeges which require the appicatio of predictive aaytics, this paper focuses o the marketig departmets' uique chaeges ad their soutios through predictive aaytics. High Tech Marketig Campaig Executio ad Chaeges Marketig Campaigs i the High Tech idustry show certai uique characteristics Shorter Life Cyce correspodig to shorter product shef ife Frequet executio Predomiaty oie These pose sigificat chaeges for campaig maagers o two frots executig campaigs ad esurig maximum retur o marketig ivestmet. The atter trasates to the foowig busiess eeds: How do we improve our campaig respose rates? How do we improve our ead geeratio capabiities? How do we icrease marketig geerated opportuities? The ext sectio provides a overview of appicatio of Predictive Aaytics i various phases of a Marketig Campaig Life Cyce specificay i the High Tech Cotext ad how the busiess eeds highighted above are addressed. 5
6 Iteiget Campaig Executio Compaies i the High Tech space (Computer Software/Hardware, Software Appicatios), execute marketig campaigs with objectives varyig from demad geeratio to improvig awareess to pipeie acceeratio. The tactics empoyed for executig these campaigs icude emai, oie, Search Egie Optimizatio (SEO), webcasts, dispay ads, search ads etc. A these tactics are itegrated ito the campaig ife cyce ad are depoyed separatey or together based o the requiremet. The differet phases of the campaig ife cyce aog with key activities are show beow. ŸIdustry/Segmet Idetificatio ŸKPI Formuatio ŸPost Campaig Aaysis-Lead Geeratio Metrics, Campaig Effectiveess Reportig ŸRespose Aaysis Reportig Paig Budgetig & Caedar Targetig ŸCompay Idetificatio Ÿ Cotact Strategy Defiitio ŸChae Readiess Assessmet ŸLead Nurture Effectiveess Reportig ŸLead Agig/ Maagemet Reportig Lead Mgmt Campaig Setup ŸCotet Creatio Ÿ System preparatio Ÿ Vedor Briefig ŸRespose Capture Respose Capture Campaig Executio ŸList Pu Ÿ Data Upoads Ÿ Data Audits Ÿ Reportig Ÿ Data Ceasig Ÿ Cotact Quaity Ÿ Assessmet A campaig s success is drive by two factors Figure 1: Campaig Life Cyce Esurig that the right idividua is targeted Esurig that the product/service vaue propositio is commuicated effectivey As is evidet from the figure above, the first four phases Paig, Targetig, Setup ad Executio, form the foudatio which determies the success/faiure of the campaig whie the subsequet phases focus more o reportig ad maagig the resposes. Orgaizatios strive towards executig the first four phases as efficiety as possibe i order to address the above two factors. Orgaizatios deped o extera vedors ike Du & Bradstreet, MarketFirst, etc. to provide them iformatio o compaies ad cotacts to be icuded i the campaig. The compaies/cotacts are provided based o specific criteria ad are ot differetiated amog themseves. Thus there is a eed to brig i some iteigece, which wi eabe these compaies/cotacts to be differetiated. 6
7 Predictive Aaytics ca be utiized to brig i this differetiatio, by usig it to seect the right compaies to focus o ad the right cotacts to target. Differet mechaisms are avaiabe withi Predictive Aaytics which fid appicatio based o the busiess requiremet that the campaig is supportig. Compaies usuay ru campaigs which focus o attractig ew customers or seig more (cross se/up se) to existig customers. The mechaisms are popuary referred to as Modes. The most popuar modes are Propesity modes ad Market Basket Aaysis modes. The foowig sectio provides a isight ito how Propesity Modes ad Market Basket Aaysis modes are everaged to ru Iteiget Campaigs. Propesity Modes Propesity impies iciatio to somethig or someoe. A propesity mode wi eabe idetificatio of etities (compaies/cotacts) which are more icied tha the others, to a object of iterest (product/service). The output from a propesity mode wi be a recommedatio o whether the etity wi respod favoraby or ot. This recommedatio i tur is drive by a score (usuay betwee 0 ad 1) ad etities with higher scores show more propesity tha etities with ower scores. The objective of the propesity mode is to use existig/historic purchase/respose data aog with the demographic/marketig egagemet/cotact spread data, to come up with a mechaism which wi resut i the propesity beig expressed as a fuctio of demographic/marketig egagemet data. Marketig egagemet data icudes iformatio ike umber of marketig touches, chaes (oie, emai, phoe, direct mai, evet etc) through which the touches have occurred. Cotact spread data icudes iformatio ike umber of cotacts at differet eves, umber of cotacts by departmet etc. The mechaism is usuay Regressio1 ad wi resut i a equatio with the Left Had Side beig the propesity ad the Right Had Side beig the fuctio of oe or more demographic/marketigegagemet/cotact spread idicators. Sice the score/propesity is imited to a vaue betwee 0 ad 1, Logistic Regressio2 is appied i this sceario. âi = Weight associated with each idicator Xi = Idicator (Saes, Empoyees, Idustry etc) Propesity = â0 + â1x1 + â2x å [1] 1A statistica measure that attempts to determie the stregth of the reatioship betwee oe depedet variabe (usuay deoted by Y) ad a series of other chagig variabes (kow as idepedet variabes). 2 Logistic regressio (sometimes caed the ogistic mode or ogit mode) is used for predictio of the probabiity of occurrece of a evet by fittig data to a ogit fuctio ogistic curve. It is a geeraized iear mode used for biomia regressio. Like may forms of regressio aaysis, it makes use of severa predictor variabes that may be either umerica or categorica
8 The diagram beow shows the appicatio of propesity modes eabig the segregatio of etities (compaies/cotacts) ito groups with high/medium/ow propesities. Before Scorig Target Accouts After Scorig Issuer Trasactio Data 200+ Propesitary Behavioura Profie Variabes per Accout Derived Variabes Per Accout Propesity Mode LOW MED HIGH Figure 2: Propesity Mode Appicatio The first part of the diagram shows the distributio of a the etities without ay guideie to differetiate betwee them. The secod part of the diagram ivoves appicatio of the propesity mode to create the differetiatio ad the third part of the diagram shows the etities differetiated ito groups with varyig propesities. 8
9 The Propesity mode is buit o a sma sampe of the popuatio ad is vaidated before beig appied to the arger popuatio. The iheret assumptio beig that the sampe is represetative of the popuatio. The effectiveess of a mode is measured i terms of 'ift'. The ift basicay is a measure of how effective the mode is i terms of idetifyig the respodets/purchasers, compared to ot appyig the mode. The mode s effectiveess is summarized i the form of a ift chart as depicted beow % Positive Resposes Cumuative Gais Chart % Sampe Seected Lift Curve Baseie Figure 3: Gais Chart The baseie tred shows the respose that wi be obtaied as a resut of ot usig the mode. It is iear ad shows that targetig X% of the popuatio wi resut i idetifyig X% of respoders/purchasers. The Lift Curve shows the improvemet i idetifyig respoders/purchasers as a resut of appyig the propesity mode. I the chart, the mode eabes idetifyig 85% of the respoders/purchasers by targetig oy 50% of the popuatio compared to idetifyig oy 50% of the respoders/purchasers without usig the mode. This impies that appyig the propesity mode wi eabe reaizig substatia savigs i terms of beig abe to target esser umber of etities whie obtaiig same, if ot better respose rates compared to ot appyig the mode. I essece, Propesity mode eabes ijectio of iteigece i the Campaig Life Cyce. The Propesity mode deveoped for idetifyig ew customers/respodets is termed as Net New mode ad modes deveoped for seig more to existig customers (cross se/up se) are caed Cross Se/Up Se modes. From a campaig ife cyce perspective, the propesity mode ca be appied durig the Targetig phase (idetifyig compaies) ad the Campaig Executio phase (idetifyig cotacts), which wi resut i esurig that the right etities are targeted. 9
10 Market Basket Aaysis Market basket aaysis idetifies customers purchasig habits. It provides isight ito the combiatio of products withi a customer s basket ad is predomiaty appied i the retai idustry. Utimatey, the purchasig isights provide the potetia to create cross se propositios: Which product combiatios are bought Whe they are purchased; ad i What sequece Beer Wie Caedmeat Caedveg Fruitveg Softdrik Fruitveg Caedveg Cofectioery Wie Freshmeat Beer Softdrik Caedmeat Fish Dairy Frozemeat Dairy Cofectioery Frozemeat Freshmeat Fish Figure 4: Market Basket Aaysis The above diagram idicates a typica basket ad the associatios amog differet products withi a basket. The thickess of the ie ikig the products depicts the degree of associatio, i.e., thicker is the ie stroger is the associatio. The market basket aaysis techique ca be appied to execute cross se marketig campaigs. It is eve more effective whe more tha oe campaig targetig differet products is beig executed simutaeousy. The appicatio of this techique wi resut i a customer wise product recommedatio (propesity to purchase) ist. This iformatio ca be used to prioritize customers, so that customers showig strog propesity towards a specific product wi be the focus whe campaigs addressig that specific product are executed. 10
11 TCS Soutio TCS parters with marketig teams of orgaizatios to support their predictive aaytics eeds by everagig its techoogy expertise (toos SAS, SPSS etc, frameworks, Ceters of Exceece, parterships with product vedors), process rigor (Six Sigma, Lea Sigma, ISO27001) ad Outsourcig experiece. TCS foows a piot based approach to streamie ad stabiize the partership. The diagram beow summarizes the steps foowed: Idetify/Kick off a PoC or Piot Post Piot review ad Aaysis Joit Vaue Discovery Create ad Phased Approach Icremeta Project Kick-off Figure 5: Soutio Roadmap Key Operatig metrics are deveoped i the Joit Vaue Discovery phase. Metrics ca be defied at differet eves. Iustrative exampe of metrics for aaytics at differet eves is summarized beow: Leve Strategic Tactica Operatioa Metrics Mode ROI, Mode Performace Improvig Respose Rate Saes Accepted Leads Tur Aroud Time, Quaity Differet operatig modes are depoyed based o the orgaizatio of the customers' team ad its geographica spread. Some of the operatig modes foowed are: Peer to Peer Mode TCS Offshore Operatios Maager Ciet Aayst Aayst Aayst Aayst Figure 6: Peer to Peer Mode 11
12 Highights: TCS aayst mappig doe with Ciet Aaysts TCS Leve of owership is imited to a sectio of the work product Suitabe for services where Work products ca be broke dow ito ogica compoets Extera Iteractio is required for eabig competio of work product (Iteractio requirig physica presece at ciet ocatio) Virtua Extesio Mode TCS Ciet Operatios Maager Lead Aayst Seior Aayst Seior Aayst Aayst Aayst Juior Aayst Juior Aayst Figure 7: Virtua Extesio Mode Highights: TCS aaysts work as virtua members of the Ciet Aayst team TCS Leve of owership covers the etire work product Suitabe for services where Extera Iteractio is miima ad ca be haded from offshore whe required Data avaiabe over the iteret or ca be provided by the customer Abiity to buid a pyramid with key aaysts exposed to the customer 12
13 Case Study Ciet Profie: The ciet is a eadig provider of eterprise maagemet or busiess appicatio software ad has presece across the gobe. The marketig team of the ciet rus campaigs across regios EMEA, North America ad APJ focused o oe/more products/soutios/idustries. Busiess Need: The marketig team is ookig at improvig their campaig executio effectiveess by makig it more iteiget ad thus improvig RoMI (Retur o Marketig Ivestmet) Probem Statemet: How ca we obtai more resposes/eads with the same budget? Soutio: TCS partered with the ciet marketig team ad has bee ivoved i providig Predictive Aaytics services both durig the Campaig Targetig ad Campaig Executio phases. A peer to peer mode was estabished with TCS aaysts workig with regioa ciet cotacts As part of the soutio various Propesity ad Market Basket modes where buit based o the campaig objectives (Propesity modes for Acquisitio/Cross Se campaigs ad Market basket modes for Cross Se campaigs) Iformatio reated to product purchases, marketig egagemets (how may touches, tactics used, chaes), firmorgraphic (idustry, saes, empoyees), cotact spread (cotacts by eve, departmet), Lead/Opportuity history were used as predictors to determie respose/purchase propesities Busiess beefits reaized as a resut of iteiget campaig executio are detaied beow Lead/Opportuity geeratio beefits Propesity mode buit for the North America regio resuted i 57% icrease i average opportuities per week / rep, 2x icrease i pipeie vaue, 1.6x icrease i tak-time Propesity mode buit for a busiess iteigece product campaig executed for the North America regio resuted i $300K worth of opportuities beig geerated o the first day of campaig itsef 3X coversio rates o demad ge campaigs i the EMEA regio Market Basket Mode buit for EMEA regio resuted i 2.9X icrease i ead geeratio from a Teecampaig Registratio/Respose rate beefits North America regios saw a 50% icrease i evets registratios ad 2X icrease i cick rate o ivitatios 13
14 The Road Ahead The focus of predictive aaytics has bee the usage of static data. With the rea time data beig made avaiabe as a resut of advacemets i techoogy, mechaisms to esure that the modes buit are abe to everage this data wi make them eve more effective. With the advet of socia media ike Facebook, Twitter etc, the avaiabiity of rea time iformatio o the iteret is growig maifod. A ot of these socia media are aso used to express opiios about products ad services. The focus of aaysts ivoved i predictive aaytics is to utiize this source of iformatio to take Iteiget Campaig Executio to the ext eve 'Iteiget ad Socia'. Appedix A. Toos There are a host of toos avaiabe i the market which is used to carry out Predictive Aaytics. Some of the popuar oes are isted beow: SPSS SAS R MINITAB KXEN B. Pre-Requisites As is evidet from the discussio i the paper, the power of predictive aaytics ca be haressed oy i the presece of a soud data maagemet strategy. The modes buit as part of the Predictive Aaytics are as good as the uderyig data. Hece the adoptio of appropriate goverace practices aroud how data wi be maaged is a pre-requisite before ay pa of haressig the power of predictive aaytics ca be put i pace. 14
15 About TCS HiTech Idustry Soutio Uit TCS' HiTech idustry Soutios Uit provides optima, customized, ad comprehesive soutios across varied High Tech idustry segmets: Computer Patform ad Services Compaies, Software Firms, Eectroics ad Semicoductor Compaies, ad Professioa Services Firms (Lega, HR, Tax & Accoutig ad Cosutig & Advisory/Aayst firms). Buidig o its vast experiece i egieerig, busiess process trasformatio, iovatio ad IT soutios, TCS offers a comprehesive portfoio of services that maximize growth, maage risk, ad reduce costs. The TCS HiTech Idustry Soutio Uit parters with High Tech eterprises to provide ed-to-ed soutios which hep reaize operatioa exceece, iovatio ad greater profitabiity. For more iformatio, visit us at Cotact For feedback o this artice ad more iformatio, pease cotact us at: HiTech.Marketig@tcs.com Subscribe to TCS White Papers TCS.com RSS: Feedburer: About Tata Cosutacy Services (TCS) Tata Cosutacy Services is a IT services, cosutig ad busiess soutios orgaizatio that deivers rea resuts to goba busiess, esurig a eve of certaity o other firm ca match. TCS offers a cosutig-ed, itegrated portfoio of IT ad IT-eabed ifrastructure, egieerig TM ad assurace services. This is deivered through its uique Goba Network Deivery Mode, recogized as the bechmark of exceece i software deveopmet. A part of the Tata Group, Idia s argest idustria cogomerate, TCS has a goba footprit ad is isted o the Natioa Stock Exchage ad Bombay Stock Exchage i Idia. For more iformatio, visit us at IT Services Busiess Soutios Outsourcig A cotet / iformatio preset here is the excusive property of Tata Cosutacy Services Limited (TCS). The cotet / iformatio cotaied here is correct at the time of pubishig. No materia from here may be copied, modified, reproduced, repubished, upoaded, trasmitted, posted or distributed i ay form without prior writte permissio from TCS. Uauthorized use of the cotet / iformatio appearig here may vioate copyright, trademark ad other appicabe aws, ad coud resut i crimia or civi peaties. Copyright 2011 Tata Cosutacy Services Limited TCS Desig Services I M I 07 I 11
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