You are on page 1of 42

Unlock Your Customer Data

with Data Visualization and


Customer Segmentation
Dr. Richard Hackathorn
Bolder Technology, Inc.
May 14, 2009
Sponsor
Speakers

Richard Hackathorn Andrew Cardno


President and Founder, Chief Technology Officer,
Bolder Technology, Inc. BIS2
Unlock Your Customer Data
With Data Visualization and
Customer Segmentation
Richard Hackathorn
richardh@bolder.com

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 Slide 5


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 Slide 6


A Tough Business Problem

• 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 Slide 7


An Example – Telecommunications

• Facing cost reductions, evolving technology


alternatives and shifting market niches

• Customer retention

• Service up-selling

R.D. Hackathorn Slide 8


A Tough Business Problem

• 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 Slide 9


Customer Segmentation

• 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 Slide 10


It feels like...

You are looking through a keyhole

R.D. Hackathorn Slide 11


It feels like...
your
customers

...into a room with


lots of activity

R.D. Hackathorn Slide 12


It feels like...

...but
you really
want to
see like
this!

R.D. Hackathorn Slide 13


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 Slide 14


Toward Visual-Centric Analytics

visualization

computation

data warehouse

computational-centric
R.D. Hackathorn Slide 15
Toward Visual-Centric Analytics

visualization

computation
computation

data warehouse data warehouse

computational-centric visual-centric
R.D. Hackathorn Slide 16
Toward Visual-Centric Analytics

• Achieving the balance

R.D. Hackathorn Slide 17


Cross-Levels and Cross-Functions

strategic

tactical

operational

computation

data warehouse

cross-levels
R.D. Hackathorn Slide 18
Cross-Levels and Cross-Functions

strategic
marketing
tactical manufacturing

operational sales

computation computation

data warehouse data warehouse

cross-levels cross-functions
R.D. Hackathorn Slide 19
Visualizing Cross-Enterprise

computation

data warehouse

typical
R.D. Hackathorn Slide 20
Visualizing Cross-Enterprise

computation computation

data warehouse data warehouse

typical depth across levels

R.D. Hackathorn Slide 21


Visualizing Cross-Enterprise

computation computation computation

data warehouse data warehouse data warehouse

typical depth across levels breadth across functions

R.D. Hackathorn Slide 22


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 Slide 23


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 Slide 24


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

R.D. Hackathorn Slide 25


TM

Unlock Your Customer Data


With Data Visualization and
Customer Segmentation

Andrew Cardno
CTO, BIS2

26
Introduction to Super Graphics

SPATIAL TEMPORAL PIVOTAL

QUARTAL INSPATIAL

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


All Rights Reserved.
May 2009
Introduction to Super Graphics

 Present the results visually Example Super Graphics TM

using Super Graphics. Easily identify patterns and meaningful


relationships in the data
 vizbybis2 is a highly
configurable tool.
 Allows you to directly Access the vizbybis2 GUI or use
vizbybis2 as a mashup
query the database.
 EDW friendly because it
CRM, 3rd
works on the data in place. XML Party BI
Present Visualizations Tools &
Other
Applications
Millions of customers:
Query Data
across Thousands of branches / locations
doing Millions of transactions
with Billions of interactions Directly access the data e.g.
• Regular queries
buying Thousands of products / services • Spatial queries & functions
supplied by Thousands of vendors
due to Thousands of Promotions
serviced by Thousands of employees
EDW
Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc. 28
All Rights Reserved.
May 2009
Enhancing Your Customer Data
 Mashup on context maps (such as GoogleTM Maps which
accelerate deployment and are continuously updated).
 Spatially visualize your database!

Demographic
& other data
+
zip codes, roads,
polygons etc.
BIS2 SpatialXchange

Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc. 29


All Rights Reserved.
May 2009
Using Industry Solutions to
Unlock Value
retailViz TM telViz TM

…see and understand: customer bahaviors, …see and understand: customer revenue,
instore management, channels, campaigns, lifetime value, churn, network performance,
SCM… campaign effectiveness…

insuranceViz TM gameViz TM

…see and understand: customer profitability, …see and understand: how to optimize
claims, risk factors, cross-sell / upsell, agent revenue, factors that influence what customers
performance, lapses… play, rate of play, when, how long, where…

entertainmentViz TM manufacturingViz TM

…see and understand: demand, costs,


…see and understand: customer preferences,
operational efficiency, resource management,
distribution management, promotions…
production/supply risks…

moneyViz TM

…see and understand: customer profitability,


financial risk, customer retention, competition,
costs, customer interactions…

Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc. 30


All Rights Reserved.
May 2009
Good Customer Segmentation
is the Key to Unlocking Value
Dimension Reduction
DATA

Clustering

Identify Noise Clusters Cluster Remainder

Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc. 31


All Rights Reserved.
May 2009
Good Customer Segmentation
is the Key to Unlocking Value
Dimension Reduction
DATA

Clustering

Identify Noise Clusters Cluster Remainder

Use Clusters to Build


VISUALIZATION

Super Graphics

Clusters of
Visualize from WHOLE to PART results Deep customer
insights of
Dimensional clusters
• Marketing Results Analysis
Inside customer
Understand All • Responders Cyclical interactions
patterns of based on clusters
• Related to Physical Location clusters

Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc. 32


All Rights Reserved.
May 2009
Good Customer Segmentation
is the Key to Unlocking Value
Dimension Reduction
DATA

Clustering

Identify Noise Clusters Cluster Remainder

Use Clusters to Build


VISUALIZATION

Super Graphics

Clusters of
Visualize from WHOLE to PART results Deep customer
insights of
Dimensional clusters
• Marketing Results Analysis
Inside customer
Understand All • Responders Cyclical interactions
patterns of based on clusters
• Related to Physical Location clusters
INSIGHT

Key Business Percent (%) of whole or other For example, A map showing
Performance variable – where are the percent (%) of responders
Drivers (BPDs) variations from the whole against whole
Understanding through Super Graphics to develop insights

Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc. 33


All Rights Reserved.
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.

Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc. 34


All Rights Reserved.
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
Example questions include:
• Are there any regional
variations in consumption?
CLUSTER #2 And consumption over
time against any national
trends? This could be
against the norm and/or
revenue value per head of
CLUSTER #3 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?
Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc. 35
All Rights Reserved.
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.
Example questions include:
• Network utilization by all products
and by product line.
• Network utilization by all
customers and by customer
segment.
• Network utilization by all
Network Utilization – geographic areas or particular
2001 - 2008
geographic areas.
• Network utilization - % from mean
– areas of the network.
• Network utilization – product line
or customer segment
increase/decrease year-on-year.

Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc. 36


All Rights Reserved.
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.
Interconnect
Agreement

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

Example questions include:


• 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.
Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc. 37
All Rights Reserved.
May 2009
Quartal – Customer Revenue (Story 5)
Identifying customer segment opportunities: 0. Top left:
(Older customers and low ARPU)
―Older‖
Customers

Customers who have been with us a long


time and have a low revenue per user.

1. Top right:
Split by Revenue@

(Older customers and high ARPU)


Rank History#

Customers who have been with us a long


time and have a high revenue per user.
0 1
2. Bottom left:
2 3
(Newer customers and low ARPU)
Customers who have been with us a short
time and have a low revenue per user.
Customers

3. Bottom right:
―Newer‖

Newer customers and high ARPU)


Customers who have been with us a short
Low ARPU High ARPU time and have a high revenue per user.

Rank Average Revenue Per User (ARPU) # History means the length of time someone has been a
Per Year customer. An ―older‖ customer means that they have been a
customer for a relatively longer period, than a new customer.
Split by Revenue Each quadrant is split by an equal amount of revenue.
Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc. 38 @ Alternatively, could be split by ARPU.
All Rights Reserved.
May 2009
Quartal – Customer Segmentation
(Story 6)
Cluster 1 Cluster 2
Differences in customer
behavior—by customer
segment—can easily be
seen when the customer
segments are displayed
in the Quartal Super
Graphic.

Cluster 3 Cluster 4
The ability to change what is
displayed on the x and y axis
of the Quartal picture makes
Split by Revenue@
Rank History#

the Quartal Super Graphic a


powerful and intuitive
customer segmentation,
selection, and analytical tool.

Rank Revenue Per User (ARPU) Per Year


Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc. 39 Split by Revenue
All Rights Reserved.
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.
Copyright © 2008 - 2009 – Business Intelligence Systems Solutions, Inc. 40
All Rights Reserved.
May 2009
Questions?
Speaker Contact Information
• If you have further questions or comments:
Richard Hackathorn
richardh@bolder.com
Andrew Cardno, BIS2
andrew.cardno@bis2.net

You might also like