Powershop Life Time Value and Segmentation Presentation

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Information about Powershop Life Time Value and Segmentation Presentation
Business & Mgmt

Published on March 4, 2014

Author: optimalbi

Source: slideshare.net

Description

Overview of the Life Time Value and Segmentation work OptimalBI and Powershop did together.

LOVING YOUR CUSTOMERS, BY UNDERSTANDING THEM BETTER SAS NZ Conference 18 February 2014

CHRIS PROUT SHANE GIBSON POWERSHOP OPTIMALBI CUSTOMER INSIGHT MANAGER MAKES CUSTOMERS HAPPY

QUESTION 1 : ARE WE MAKING OR LOSING MONEY ON A CUSTOMER QUESTION 2: IF WE ARE LOSING MONEY WHAT BEHAVIOR DO WE NEED TO CHANGE TO MAKE MONEY

A STORY OF LIFE TIME VALUE CUSTOMER SEGMENTATION AND HOW IT WAS DELIVERED

MAKE DATA ACCESSIBLE MAKE THE DATA TELL A STORY MAKE THE STORY VISIBLE

ABOUT POWERSHOP AND THEIR DATA

SEGMENTATION LIFETIME VALUE BUILDING BLOCKS

DESCRIBING A CUSTOMER VISUAL SEGMENTATION VISUAL DISCOVERY

USING SAS TO CREATE THE STORY

ENTERPRISE GUIDE HARNESS THE WEALTH OF UNIQUE CUSTOMER BEHAVIOR DATA

ENTERPRISE MINER / RPM LIFE TIME VALUE AND SEGMENTATION MODELS IDENTIFYING CUSTOMER BEHAVIOR

VISUAL ANALYTICS / INFOGRAPHIC SHOW RESULTS OF THE MODELS VISUALLY

MODEL BUILDING BLOCKS

LIFETIME VALUE HISTORICAL VALUE FUTURE VALUE 250 200 150 VALUE 100 50 0 2010 2011 2012 -50 -100 -150 LIFETIME VALUE 2013 2014

SAME CALCULATIONS = DIFFERENT ANSWERS COST TO SERVE CALCULATION

The annual average monthly Cost To Serve: • Customer $950/month • Consumer $970/month

SAME CALCULATIONS DIFFERENT ANSWERS BEHAVIOR Segmentation was done at a customer level. This allowed us to use behavioural demographics to characterise the segments. CALCULATED VARIABLES All other variables have been calculated for both consumer and customer. THE POWER OF SAS SAS allowed us to calculate at both levels and pick one as our business default

VISUALISATION IS EVERYTHING

AVG LTV SEGMENT 1 2 3 4 5 Grand Total AGCL 458.01 300.29 141.21 331.05 906.79 711.57 BOPE 900.12 134.49 30.32 402.30 814.17 363.48 CTCT 394.77 347.61 660.21 215.70 193.83 37.01 EZYN 444.29 983.31 836.89 916.78 520.78 15.39 GENE 583.13 284.27 247.72 575.16 600.65 440.82 GENH 124.71 136.25 11.88 430.15 60.43 355.81 GEOL 55.83 591.25 458.06 496.29 398.64 552.13 HNET 632.14 933.46 10.67 357.06 106.31 104.73 MEEN 572.54 762.98 447.82 367.90 777.30 507.99 MERI 755.54 282.27 913.39 142.65 145.55 725.23 PRME 834.69 674.02 802.77 496.99 944.49 241.12 PSNZ 601.11 113.96 68.99 907.61 960.14 180.86 PUNZ 574.01 468.47 248.96 997.26 876.39 242.68 SIMP 765.22 218.85 532.30 574.52 807.28 230.17 TRUS 663.66 893.55 398.03 974.38 265.09 855.49 UNKN 776.13 19.41 30.17 487.85 338.22 992.43 Grand Total 9,135.89 7,144.45 5,839.39 8,673.64 8,716.04 6,556.92

SEGMENTATION

CHURN DRIVERS

WE ONLY FOCUSED ON THE TOP CHURN DRIVERS

UNDERSTAND THE CUSTOMER

RESIDENTIAL customer Relatively HIGH cost to serve LOW user generating HIGH revenue LOYAL Powershop brand HIGHLY engaged Purchaser HIGH number of specials Pays the HIGHEST unit price

SAS VISUAL ANALYTICS

POWERSHOP HAS A UNIQUE CULTURE

UNDERSTAND YOUR CUSTOMER

POWERSHOP MOVE FAST & NEED TO PROVE VALUE FAST

SAS VISUAL ANALYTICS FAST Deployed in the Amazon cloud, up and running in days rather than weeks or months VALUE Small monthly costs rather than massive upfront costs PROVE IT If SAS Visual Analytics doesn’t deliver value, it can be turned off easily

POWERSHOP DON’T LIKE LOCK-IN

NO BLACK BOXES TRANSPARENT MODELS SAS EM, RPM and EG were used to provide visible and self documenting code. No black box base SAS code was harmed in the delivery of this project. TRANSPARENT DELIVERY Powershop got all the EM/RPM projects, EG projects, SAS code and documentation so they could run it themselves. They only call us when we can add more value. MENTORING Personalised onsite mentoring after the project was delivered. Ensured Powershop got up-to speed gradually and as needed.

START SMALL, DELIVER QUICK, SHOW THE VALUE

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