The 5 secrets to making money with predictive analytics

Transcription

1 Martijn Wiertz Predictive Analytics Evangelist IBM Analytics The 5 secrets to making money with predictive analytics

2 It s the regimented discipline of using what we do know in the form of data to place increasingly accurate odds on what s coming next. A hazy view of what s to come outperforms complete darkness by a landslide. Eric Siegel - Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die, Wiley

3 See this video: Cut serious crimes by up to 30% 3

4 Using predictive analytics, the police can rank the different parts of their jurisdiction Least likely to Most likely to 4

5 Economic impact of individual decision Not all decisions are created equal High value High value, low volume decisions Examples: M&A, capital investment, strategic marketing positioning Medium value, medium volume decisions Examples: product development & pricing, customer segmentation & targeting Low value, high volume decisions Low value Examples: claim triage, customer retention offer, new policy pricing, prospect marketing offer assignment Low volume Decision Volume High volume 5 Adapted from Taylor/Raden - Smart (Enough) Systems, Prentice Hall 2007

6 See this video: Increase profitability by up to 20% 6

7 Decisions, decisions, decisions Business Area Sales Marketing HR Supply chain Maintenance Fraud detection Decision I know I don t win every sales opportunity. Which one should I focus on first? This customer has just logged into our mobile app. What is the best offer to make to them, right now? Should I let this candidate go through to the next round in the interview process? How much should I order for every product for every store? Which machine should we service first? Should I refer this transaction for a closer look? 7

8 Secret #1 LOOK FOR HIGH-VOLUME DECISIONS TO BE OPTIMIZED 8

9 Information about the Apple + IBM partnership: 9

10 Secret #2 RECOMMENDATIONS, NOT JUST MORE DATA 10

11 I used to think my job was all about arrests. Chasing bad guys. Now, we figure out where to send patrols to stop crime before it happens. 11

12 Use analytics to manage the trade-offs that are inherent in these decisions Chase the bad guys, or predict-and-prevent? Avoid out-of-stocks, or protect profit margin? Gain market share quickly, and have a retention problem later on? Investigate everything, or focus on fast processing? Sell more credit cards now, and have a debt collection problem later on? Retain everyone, or be more selective? 12

13 Secret #3 REDEFINE SUCCESS, AT THE CASE LEVEL 13

14 What it s not Enemy of the State Touchstone Pictures,

15 IBM SlamTracker at the next Grand Slam tournament: 15

16 Sign up for the free version at 16

17 Secret #4 IT S NOT BLACK MAGIC, NOR BIG BROTHER 17

18 An approach to getting started Subscriptions Geolocation Data Government Statistics Weather Data Competitor Information Facebook Data Demographic Profiling Medical Trends Twitter Hospital Performance Data External Financial Profiling SME Information Lifestyle Health Data Google Alerts Linked In Catastrophic Data Workflow Data Complaints Service Activities Other Web Activity Internal Contact History Claims History Call Recordings s Customer Data Policy Data Payment History Policy Documents Proposal Forms Web Traffic Structured Unstructured 18

19 Secret #5 THERE IS DATA AVAILABLE RIGHT NOW 19

20 Summary 1. Look for high-volume decisions to be optimized 2. Recommendations, not just more data 3. Redefine success, at the case level 4. It s not black magic, nor big brother 5. There is data available right now Bonus Tip: Learn from others, but create your own journey 20

21 Martijn Wiertz Insurance Solutions Leader IBM Analytics Mobile: martijnwiertz@nl.ibm.com IBM Nederland BV Johan Huizingalaan VH Amsterdam The Netherlands 21