Data Analytics – Customer Analytics

For most businesses, the primary means of growth involves the acquisition of new customers which involves finding customers who previously were not aware of your product, were not candidates for purchasing your product, or customers who in the past have bought from your competitors. Some of these customers might have been your customers previously, which could be an advantage (more data might be available about them) or a disadvantage (they might have switched as a result of poor service). In any case, data mining can often help segment these prospective customers and increase the response rates that an acquisition marketing campaign can achieve.

Customer acquisition solutions like response modeling, campaign analytics and segmentation rank order prospects and identify population clusters that are most likely to respond product campaigns. Through the use of predictive models, test and learn frameworks, and tracking mechanisms businesses can support a multitude of tailored offers that not only enhance market share but also successfully reduce acquisition costs.

Research shows that acquiring a new customer can be 7 to 8 times more expensive that retaining an existing customer. Also since customer acquisition costs are very high, customer retention and customer value management are very important in domains like credit cards industry, insurance industry and retail.

Predictive analytics provides the power to assign the likelihood of attrition to existing customers. Industries can then identify the profitable customers amongst those that have a high likelihood of attrition and implement programs to proactively retain these valuable customers. Proactive identification of likely attriters combined with proactive retention programs can add millions by way of incremental customer revenue.

Fractal Analytics, an analytics outsourcing firm based in India has deployed several CRM analytics solutions particularly for customer acquisition, attrition management, customer retention, customer value management and customer segmentation for clients in verticals like banks, insurance firms, retail and CPG.

Related Links:

• Customer Analytics – CRM Analytics
• Use of data analytics in consumer finance companies
• Consumer Finance: Predictive Analytics for competitive advantage
• CRM Analytics in Retail
• Customer Retention Strategies in Insurance Industry

CRM Analytics - Customer Analytics

Executives in the areas of consumer marketing, customer relationship management, customer retention, revenue management have to take care of issues such as customer attrition, response rate, marketing ROI as these factors have a direct impact on business revenues and profits. Data Analytics have proven to be a good tool for them to take good decisions upon such matters. Customer analytics have enabled them to manage better customer lifecycle, know their customers and predict their behavior.

CRM analytics comprises all programming that analyzes data about an enterprise’s customers and presents it so that better and quicker business decisions can be made. CRM analytics can be considered a form of online analytical processing and may employ data mining. As Web sites have added a new and often faster way to interact with customers, the opportunity and the need to turn data collected about customers into useful information has become generally apparent. As a result, a number of software companies have developed products that do customer data analysis.

CRM analytics can provide customer segmentation groupings, response modeling, attrition modeling, loyalty analytics, cross-sell modeling and RFM analysis. Data collection and analysis are viewed as a continuing and iterative process and ideally over time business decisions are refined based on feedback from earlier analysis and consequent decisions.

Companies like Fractal Analytics have lead their clients to have a better productive customer relations in terms of sales and service and improve in supply chain management (lower inventory and speedier delivery) and thus lower costs and more competitive pricing.

For more information:

• CRM Analytics
• Customer Acquisition Analytics for Insurance Vertical
• Customer Analytics in Retail
• Retailing- The age of customer intelligence
• Customer Value Management with Cross-Sell Models

Analytics in India

Analytics is basically about digging deep into data to discover relationships, find causation, and describe phenomena. It is an attempt to understand historical patterns to predict future performance or, in the a few cases, provide information to support decisions in real-time. Today, the latest trend in outsourcing has been the outsourcing of high-end knowledge work to India. Indian analytics service providers have been providing global organizations with technology-driven analytics services. Analytics outsourcing decisions are driven by factors like Focus on Core business, specialists taking care of high-end analytics work and Leverage Cost arbitrage advantage.

From finance sector to retail and telecom, analytical solutions have proven to be highly beneficial for business performance. Where you have a data, you can have a solution to analyze that data and provide you information which can be used to optimize your business processes. For example: In retail, by knowing your customer, analyzing their behavior you can optimize your marketing expenses and spend per customer. Similarly, in CPG sector companies use analytics to optimize their pricing and manage their brand and portfolio and hence improve profitability and increase their market share and containing costs.

As rises to become a major hub for analytic services, MNC’s such as HSBC and American Express have already set up their captive centers here. Few global analytic firms such as Fair Isaac have started their Indian operations to take advantage of raising trend of analytics outsourcing. There are few niche analytics providers such as Fractal Analytics who have established a benchmark by providing analytic solutions to various sectors ranging from financial services, retail to telecom and Insurance. Solutions like customer acquisition, marketing mix modeling, consumer insights and risk analytics have proven to be very beneficial for these sectors to enhance their sales and overall business performance. To sum it up, analytics market has grown up in a very significant manner
and soon India is going to become a primary hub for the analytic services. Estimates suggest that India accounts for one third of the total $17 billion global market. Analysts believe that the true potential of

analytics hasn’t been realized yet and this is just the beginning. For latest information on analytics, please refer to following links:

• Analytics Outsourcing - Why Fractal?
• Data Analytics: A Huge Opportunity
• The Rise of Analytic Service Providers
• Interview With Srikanth Velamakanni: CEO Fractal Analytics
• Business Analytics in India
• Leveraging analytic solutions to improve insight, performance and customer experiences
• Analytics outsourcing - emerging models in India
• Insurers Seek Competitive Edge Through Underwriting Analytics
• Financial Analytics: Delivering metrics that matter
• Retail risk management software launched
• What senior executives think about analytic priorities
• Blog Analytics Outsourcing - the new buzzword

Analytics Outsourcing

Data analytics helps solve complex business problems by analyzing data and generating useful business insights. Analytics outsourcing has helped several global firms leverage the power of data to generate useful insights and make strategic business decisions. Cost savings, operational efficiencies, access to a highly talented workforce and improved quality are all underlying expectations in outsourcing analytics processes to India.

Analytics outsourcing, like other forms of knowledge process outsourcing helps companies get their analytics needs met without having to take on the responsibility of another new process. The success of knowledge process outsourcing in India was the main driver of outsourcing analytics processes as well. Analytics outsourcing to India can help a company generate savings of at least 30% and get high quality results as well. Further, analytics outsourcing eliminates the need for companies to invest in data analytics technologies and infrastructure. Knowledge process outsourcing to India has helped several companies cut costs and improve bottom lines. Analytics outsourcing in India is seeing a similar trend and is bound to grow at a rapid pace in near future.

Fractal Analytics has helped several large Fortune 500 clients meet their data analytics needs in areas of Marketing, Risk and CRM analytics using sophisticated tools and technologies. Fractal is a pioneer in analytics outsourcing and has been engaged by clients across industries financial services, insurance, telecom, retail, and CPG. The company is one of the leading analytics outsourcing providers in India and more than 70% of its business is repeat business that speaks of the clients’ trust in the company’s abilities.

Knowledge Process Outsourcing

In today’s age of globalization, converging technologies of telecommunication and information technology have redefined the way we do business. This has lead to opening of many opportunities where best-in-class talent across the world can be leveraged to provide specialized services. Companies have realized the value of outsourcing specialized tasks to low-cost destinations such as India. The success in outsourcing business process operations to India has encouraged many firms to start outsourcing their high-end knowledge work as well, popularly referred to as KPO ( Knowledge Process Outsourcing ). According to a report by NASSCOM, KPO business is expected to reach USD 17 billion by 2010, of which USD 12 billion (71%) would be outsourced to India.

The last few years have witnessed explosive growth in the KPO sector in India. Already, the top 12 investment banks of the world such as GE Capital, American Express and Citibank, have already outsourced a part of their analytics work to their captive centers in India, employing 1,200 people that is expected to go up to about 6000 in the next two years.

There are few niche analytics providers such as Fractal Analytics who have established a benchmark by providing analytic solutions to various sectors ranging from financial services , retail to telecom and Insurance . They target those companies which are looking at outsourcing even some of their core businesses functions like analytics and business intelligence.

The global analytics or data mining market, which was $ 8.4 billion in 2000, is expected to grow at 35 to 40 per cent annually for the next 10 years. It has been estimated that the amount of information in the world doubles every 20 months and the size and number of databases increase even faster. Past years have seen an exponential growth in the volume of information or data being stored in electronic format. Since data analysis is essential for businesses, it requires going beyond the data explicitly stored to derive knowledge about the business which is where data mining fits in.

Data mining techniques are used most effectively in the banking and financial services industry. Some of these analytics activities include identifying customers before acquisition, and then retain them with the help of attrition models. Companies like Fractal Analytics provide a very wide range of analytic solutions from behavior analysis, credit scoring models to cross sell models, to help financial firms and banks reduce risk and acquire profitable customers.

Insurance and retail are other areas where data mining applications are used extensively. The techniques are used for claims analysis such as developing predictive recovery models, scoring, and data visualization mechanisms to check fraudulent claims. With the help of spend analytics, customer loyalty analytics retailers have been able to increase their marketing ROI by optimizing their pricing strategy. Henceforth, companies like EvalueServe, Fair Isaac and Fractal Analytics are all set to tap the analytics outsourcing opportunities which is estimated to touch $24 billion mark in 2008.

For more information on Analytics Outsourcing , visit following links:

Outsourcing becoming knowledge outsourcing

Knowledge Process Outsourcing to India

India: Most preferred destination for KPO

Analytics Outsourcing in India

Leading insurance company increases cross-sell conversion by 40% and annual profit by $600,000

ICICI bank increases approvals without increasing default rates

Credit card issuer increases spend per customer through advanced spend analytics

Auto part distributor reduces defaults through behavioral risk models

Drivers analysis enable a retailer to understand drivers of quality perception

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