Analytics in theforefront
Another SAS executive, Nelle Schantz, discusses how analyticsis helping the New Zealand Automobile Association lead a more directedmarketing campaign for its insurance group.
She says the group used to send out 400,000 solicitations ayear "with minimum intelligence". It now sends 240,000 solicitation letters, areduction of 40 percent, but the response rate has doubled and increasedcustomer satisfaction.
Analytics has also allowed Bank of America examine data todetermine loan defaults on mortgage. They take calculations around loan defaultthat used to take four days to four hours. This gives the bank ability to reactto risk more quickly, says Schantz. She says proactive analytics is criticalfor the finance sector, which could be analyzing up to a billion rows of data."You can do complex assessments more quickly," she says.
Analytics has also provided Gilt Groupe a different insightinto their customers' experiences. Gilt Groupe runs "flash sales" for designerclothing and premium home accessories.
Gilt Groupe is active in the social media space so it isinterested in mining customer comments and predicting customer churn, saysTamara Gruzbarg, senior director of analytics and research.
Customer experience is key, she says, of their core businessmodel of providing a variety of "flash sales" in different categories. Eachsale is live for a limited amount of time and for a limited inventory. She saysthe industry space for this type of sales is getting "very crowded" as morecompanies including department stores are offering similar services. "How doyou provide the best customer experience and differentiate us from everybodyelse?"
Right now, they hold 50 new sales everyday. "We need to showyou something that is relevant to you and prompt you to buy," she says.
The group also found that the customers who return the mostpurchases are also the most loyal. "It doesn't make sense,"says Gruzbarg thefirst time she reported this to her business colleagues. But she says theirindustry is so specific so when customers "start feeling comfortable [dealingwith them], they can take a gamble on a purchase and if they don't like it,they can always return it and come back and purchase some more".
She says it is important to encourage everybody to innovateand ask questions. Questions from engineers "are as important as those comingfrom the senior vice president".
Kimberly Holmes, senior vice president of strategicanalytics at XL Group, says it is important to look at data broadly. "There isa lot of data that is not in numbers, we need to think about it in new says andtake advantage of new technology," says Holmes.
She says while unstructured data will not"overwhelm" business data at XL Group, "it is just as powerful asstructured data".
She says one of the "curses of the job" is that analyticscan help with every business problem. These can range from decisions on how tohire, who to promote, how to advertise and manage distribution. "I can't thinkof a question that can't be answered using analytics.
"We have enough work lined up for us in the next two years."
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