Big Data and Dynamic

Customer Strategy

Soviljot Singh ()Chetan Dua ()Ankit Parmanandka (145)Meera Thacker (159)Anurag Yelkur (163)

What is big data and how will it change strategy?

What is Dynamic Customer Strategy? Do I have to throw out all I know about

strategy and start over?

Introduction

Big Data: data at an increasing rate of Volume, Variety, and Velocity

Every Transition generates data Online or offline How do we use this data? That’s when the

strategy part comes in

Dynamic: because when applied, organizations are free from those practices that locked them into strategies even while the market changed

Strategy is one activity, implementation another

DCS is a skillset and toolset to capture market value through agile marketing

Dynamic Customer Strategy

The practice involves identifying and securing targets of opportunity that con- tribute to strategic objectives

Strategy versus Opportunity

Key component to Dynamic Customer Strategy is the data strategy, or how one handles the raging river of Big Data.

DCS offers a way to increase the velocity of learning and velocity of action.

Speeding up flywheel for both means accelerating all manners of business cycles.

To achieve velocity , fast data acquisition tools are required, automatic analysis models and strong response mechanism

Applying Dynamic Customer Strategy

Value at the Individual/Market Level

Time

Value Event

Lost to Competitor

Data

Action

BEFORE

Time

Event

Close Sale

Analysis

Action

AFTER

Data

Analysis

Better execution of strategy. Strategies are executed with greater consistency because an outcome of DCS is a common language.

Provides the mission statement. That mission statement gives a broad view of what we can do.

Dynamic Customer Strategy tightens the linkages between the field and the leader.

DCS helps you figure out whether it is the strategy or the rep—and that distinction is key to replicating super-high levels of success.

Benefits of Dynamic Customer Strategy

Dynamic Customer Strategy

Dynamic Customer Strategy

Conceptual Map

Big Data Strategy Operational

Map

Organizational Learning & Absorptive Capacity

• New• marketing• activity

Operations

• Historical data

• Experiment

Research

• Sudden change

• Trend

Reporting

Traditional Insight to Action Model

Traditional Insight is Too Slow

Occurs after the fact – have to observe the trend

Fails to anticipate change

Value in Learning Faster

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Reaction to Competitor’s Major Launch #1

TimeSource: Tanner, Analytics & Dynamic Customer Strategy: Big Profits from Big Data

How to Accelerate Learning?

• Start with a Conceptual Map

Satisfaction Loyalty CLV

How to Accelerate Learning?Add Operational Definitions

Satisfaction

Loyalty CLV

Net Promoter

Loyalty Level

RFM

How to Accelerate Learning?

Add Why

Satisfaction

Loyalty CLV

Net Promoter

Loyalty Level

RFM

Beware the Data Trap

The Illusion of Knowing because you have a lot of data

No matter how many pictures of an elephant’s butt you take, you still don’t know there’s a trunk on the other end.

Loyal customers are multi-channel customers Loyal customers are willing to pay more Loyal customers are cheaper to keep Loyal customers make more referrals

Why Loyal Shoppers Have Greater CLV

High Value Multi-Channel Segments

• Are likely to be Variety Seekers• Buy more Hedonic products than

Utilitarian products• More likely to make Impulse

purchases

What to do Next?

• Observe• Hypothesize• Historical Data Analysis

Case Study: Cabela’s

Abandon

Abandon

Abandon

Buy or Die

Browse

DISCOVERY

• Business Question: How to accelerate browse/purchase cycle?

• Hypotheses:– Are there higher value products likely to

trigger purchase?– Are there buyers more prone to accelerated

cycles?

Conceptual Map

Value

Cost

Effort

Benefit

Conceptual Map

Value

Cost

Effort

Benefit

No Sale

Experiment: Hot Buys vs. Basket Starters

Increased transaction penetration.Increase in product level sales.Increased margin.Transactions including only ad items decreased.Increased traffic, increased conversion.Increased shopping across channels.

Back to Discovery

• Where can we extend the learning? (In-store merchandising strategies?)

• Why some customers and not others?• What are longer-term effects?• How do basket starters change?

– Within customer life cycles– Across seasons

Action

Not all “best-offer” models are customer specific – but NO MINDLESS DISCOUNTS!

Discover

Develop

Act

Another Example Canadian city transit system Frequent rider program Push special offers based on actual journeys

End Mindless Discounting! Cabela’s

Full Margin Offer Revenue Increase Margin Increase CLV Increase

Canadian Transit Co.

Dollar off! How is that different

from…

Organizational Barriers

The Belief that Business Results Trumps Learning Business Managers’ Fear of Math From Data Ownership to New Turf Battles Executive Sponsorship & Project Management Lack of Organizational Learning Strategies

Accelerating Organizational Learning

Organizational Learning is a commitment with processes◦ After-action reviews◦ Dissemination strategies◦ Effective community-building

Building Absorptive Capacity

Dynamic Customer Strategy

“The only sustainable competitive advantage is to (be able to) learn faster than your competition.”And to act on that learning!

THANK YOU