Our news and views relating to Data Analytics, Big Data, Machine Learning, and the world of Credit.
If 2020 was not hit by the COVID-19 global pandemic, many were touting 2020 as the year of alternative data. In the credit assessment world, data has typically incorporated demographic data and credit bureau data (where available), but now we are seeing alternative data playing more of a role namely in cellular behavioural data and psychometrics.
Principa employs a variety of best-practice credit scorecard building techniques including mathematical programming, regression modelling, optimal segmentation-seek genetic algorithms and reject inference parceling, amongst others. Through our credit risk scorecards businesses can look to improving their credit risk decisioning by 5-30%.
Peoples habits are changing - Are you adapting?
New technology gives the promise of greater enablement. But some of the shrewdest entrepreneurs understand that opportunity comes from the unintended consequences of new technology. So, let us take digitalisation of the loan application process: the opening of digital channels has enabled lenders to service their customers 24/7 and through APIs integrate with a host of sophisticated services. However, the advent of the digital channel has meant more opportunity for fraud. The question to ask is:
One of the major premises used in credit scoring is that “the future is like the past”. It’s usually a rational assumption and gives us a reasonable platform on which to build scorecards whether they be application scorecards, behavioural scores, collection scores or financial models. That is reasonable until something unprecedented comes along. You can read about this black swan event in our previous two blogs here and here
This is the second of a 2-part blog. You can read the first blog here.
One of the basic principles of credit scoring and modelling is that the “future is like the past”. Whilst robust credit models may be calibrated on multiple time periods, this assumes that trends in the past represent what is going on today. COVID-19 is a black swan event – meaning in the modern day it really is unprecedented. If you have never come across the term black swan, or if you have but no idea the origin, I recommend taking two minutes to read its really interesting etymology.
In today’s world, running a call centre is more difficult than ever before, with customers demanding a high level of service and a great experience at every touch point.
We’re looking forward to attending this year’s Digital Customer Experience conference. The 2019 conference will be hosted by Trade Conferences International (TCI) on the 4th and 5th of September at the Indaba Hotel, Fourways, Johannesburg.
Today, more than ever before, customer service is the most important aspect of your business. With all your competitor’s that your clients can choose from, you need to offer the best experience and service to keep your customers happy – and to keep them as customers.
Most websites or apps lately have a chat function, whether that be an AI-powered chatbot or a live chat function. But many people (and some businesses) don’t know the difference between the two and aren’t sure when they are talking to (or have installed) a bot or an agent.
What is Atura? Atura is a powerful artificial intelligence chat solution that uses cloud technology to deliver the right answers to your customers via any device, albeit mobile, desktop or tablet. Built on the Microsoft Azure technology stack, Atura uses its advanced algorithms and machine learning techniques to correctly understand your customer request and then deliver the correct response. In the event that the AI doesn’t understand the customer request, the entire messaging conversation can be seamlessly redirected to a physical agent to further respond to your customer. The result: a fluent and seamless customer experience!
Deciding on which cloud service to host your core business systems on can be a daunting task. Amazon Web Services (AWS) and Microsoft Azure are two of the biggest players around, while Google Cloud and IBM Cloud are also gaining market-share.
Innovative companies know they must embrace digital transformation in their business to stay competitive in the world of the fourth industrial revolution. But legacy systems often get in the way of transformation. In this blog, we look at why companies are reluctant to move away from their legacy systems and how to know when it really is time to modernise.
What is Agent X? Agent X is a call centre virtual assistant that not only guides and supports agents during calls, but motivates and inspires high performance via an engaging, dynamic and intuitive interface.
According to Marketing Metrics: The Definitive Guide to Measuring Marketing Performance, the probability of selling to a new prospect is 5 to 20%, while the likelihood of selling to an existing customer is 60 to 70%. Your customer growth strategy is an easy way to grow your bottom line and improve your revenue.
We apply the science of data analytics to assist our clients within various aspects of their customer-driven business and engagement process. Our products make use of predictive modelling techniques to facilitate the treatment of customers at the various stages of customer lifetime, for example during onboarding, growth and retention.
Our final roundup this year covers two of our main topics: customer acquisition and customer engagement. We’ve not covered these topics in depth this year, and so decided to combine these two to provide a roundup of the best of both.
How To Improve Your Call Centre Agent Performance from PrincipaDecisions
When we initially committed to being sponsors and exhibitors at the CEM Africa Summit, our team was very excited. Not only would we have a space on the floor that would give us the opportunity to meet and connect with attendees, but we’d also have the chance of exploring the sessions at this prestigious summit ourselves.
Answer your business questions with advanced business decisioning using DecisionSmart scoring, segmentation and decisioning engine to provide segmentation, scores and decisions based on your business data, and Agent X call centre virtual assistant to display information visually for optimal call centre agent performance.
Meet Vusi, a call centre agent, with call centre agent struggles. He needs to keep his customers engaged while he shifts between various systems to find the information he needs to meet his manager’s expectations of consistent, successful call outcomes.
The right customers are important for every business. Marketing to and serving customers who are not profitable removes your focus from your best customers and ensuring they remain loyal to your business. (Click to Tweet!) Scorecards can help you identify and focus on your ideal customers by ranking your customers by the common criteria historically shown to be shared by your best customers.
According to this article by Frederick F. Reichheld in the Harvard Business Review, the average company loses about half its customers in a five-year period. When customers see a loss of value, they churn. The ultimate goal of a great loyalty strategy is to increase the perception of your solution’s value in the eyes of your customer, exactly when you need to. To achieve that, you need to be able to predict churn, many in the industry turn to leading (or lagging) indicators to indicate where efforts need to be focused.
An average customer’s attention span is less than that of a goldfish, according to the National Center for Biotechnology Information. While a goldfish can focus its attention for 9 seconds, in 2015 customers were found to lose interest after only 8, down from 12 seconds in 2000. (Click to Tweet!) The reduced attention span, makes the initial impression all the more critical, especially in a call centre environment.
As the pressure of intensifying competition mounts every day, companies must look to boost customer loyalty, considering that it costs five times as much to onboard a customer than it is to retain one. And with consumer influence now stronger than ever, businesses that fail to respond to their customers’ needs will feel the impact on their sales figures. A recent study by Bain & Company revealed a 10% increase in customer retention levels results in a 30% increase in the value of a company, and a 5% increase in customer retention rates increases profits by between 25 and 95%.
Can you test a different data-driven lead aqcuisition approach? Is it better to use one or multiple channels? Is this approach really successful? My team and I frequently get asked these and other questions on a data-driven approach to acquisition lead selection. In this blog, I’ll answer some of the most frequent questions.
I have the honour of curating the last of this year’s topic-specific Top Blog Collections. The blogs in my collection all focus on the customer, as we all should(!).
I have been lucky enough to work with and for various customer facing financial services organisations over the years. One of the benefits of this experience is the chance to compare and contrast how these organisations operate. Based on some of these observations, I have sketched out a generalised framework that describes the key functional actions of the modern customer-facing organisation. Meet the 3-I Raven*.
The amount of data now available to us is overwhelming: every two days we create as much information as we did from the beginning of time until 2003. As a Marketer, the challenge is determining what data is useful and how to turn it into marketing wisdom that leads to customer retention and growth. Considering that it costs 5 times as much to on-board a customer than it is to retain one, companies would do well to leverage their data to develop and drive retention strategies. In this post, I look at 3 ways data can be used to build and drive customer retention strategies that result in reduced churn rates and open new avenues for meaningful engagement with target markets.
Effective communication helps us better understand and connect with those around us. It allows us to build trust and respect, and to foster good, long-lasting relationships. Imagine having this ability to connect with every customer (or potential customer) you interact with through communication that addresses their motivators and desires. In this blog post, I take a brief look at ‘customer segmentation’ and how it can foster the type of communication that leads to greater customer retention and conversion rates.
McDonalds mastered the upsell with one simple question at the time of purchase: “You want fries with that?”. A simple and relevant question at the right time that has likely generated millions of extra dollars in revenue through the years for the company. Ever since then, companies have tried to emulate their success by identifying complementary products in their offering and training sales staff to ask customers the right question at the right time.
Your customers go through numerous milestones in their journey through your business: the initial interest, the first purchase and opening of an account, (hopefully) paying their accounts on time, maybe signing up for your loyalty programme (and being comfortable to tell you more about themselves).
Thanks to mobile technology, wearable devices, social media and the general pervasiveness of the internet, an abundance of new customer information is now available to marketers. This data, if leveraged optimally, can create opportunities for companies to better align their products and services to the fluctuating needs of a demanding market space.
The power of Customer Experience and growing competition are driving companies to take a more scientific approach to building customer loyalty.
As the banking industry pursues improved customer engagement, unlocking the value of data becomes critical in designing a successful loyalty programme. The balance of power in banking has changed. What customers expect, how they want to be serviced, what information they are prepared to share, and how loyal they are prepared to be, have all changed radically. According to leading industry analysts, Forrester Research, we are in the age of the customer, in which the only sustainable competitive advantage is knowledge of and engagement with customers.
If you at all follow the on-goings of Hollywood, you’ve probably heard of a baseball movie starring Brad Pitt that came out a few years ago. Its name is Moneyball, and it relates an important lesson that is revolutionising customer engagement strategies. The movie tells the true story of Billy Beane, general manager of baseball team the Oakland Athletics, who’s sick and tired of their lacklustre performance. After a key loss to the New York Yankees, he’s forced to rebuild the team on a limited budget. Instead of going with the obvious picks, he enlists the help of a Yale economics graduate to crunch the numbers and pick a team of statistically strong yet undervalued players. After a few losses, the data-driven approach is proven effective when the Athletics go on to have a 20 game winning streak – the longest in the history of the game.
South Africa’s First National Bank (FNB) has been considered one of the world’s most innovative financial institutions for years now. Voted the most innovative bank globally in 2012, the financial institution owns bragging rights as the first bank in South Africa to launch a mobile banking app in 2011 and second in line to provide fully-fledged web banking portal conveniences to its customers. For those who can remember the days before feature-rich banking apps, FNB also carved in-roads to making basic online services available to customers through SMS and WAP services - on what is now considered the archaic cell phones and internet backbones of the early 2000s.
In his final keynote speech at the 2011 Apple Worldwide Developer’s Conference, Steve Jobs remarked that, “If the hardware is the brain and the sinew of our products, the software is its soul.” Jobs’ intimate understanding of and vision for his products stands out as one of the key reasons behind Apple’s success. His notoriously protective stance on his company vision and the extent of his involvement in the conception, design and development of his products right up until their anticipated release is legendary. But the man behind Forbes’ most valuable brand of 2015 also knew a little something about value creation and customer value management.
In order to improve customer loyalty, we need to listen to our customers more. Increasing our share of wallet and maximising customer lifetime value (CLV) will only happen when customers are prepared to choose our brands and products over our competitors. Fortunately, businesses are uncovering clues to improving customer loyalty in new places thanks to data and evolving analytics platforms. This led one bank in Canada to turn to the thousands of conversations between its representatives and its customers for new insights into elevating the customer experience.
The fact that you are a living, breathing, individual means you have a unique, human-shaped imprint. Be it radiation, the endless trail of dead skin cells, or your infinitesimal gravitational field, you’re leaving a mark that can potentially be reduced to a unit of data and analysed. Enter the human voice: each chortle and hum that emanates from a customer’s vocal chord is unique. This is especially apparent when their voices are converted to electrical signals over the phone – when speaking to your company’s contact centres, for example. And when patterns emerge, such as with certain emotions or excitement levels, intelligent programs can learn to identify human states of mind in real-time speech and act accordingly to improve the speaker’s experience.
Data has redefined how businesses understand their customer base and make decisions. For instance, it’s transformed marketing from a relatively intangible expense into a clear-cut investment with a measurable ROI and targetable initiatives. However, strategically applied data has more uses than strengthening your marketing efforts alone, especially when it comes to understanding your existing customers and better attending to their needs.
How does a credit card company differentiate itself in a market saturated with special offers, low interest rates, and convoluted rewards programs?
As the pressure of intensifying competition mounts, retailers and restaurateurs are looking to reduce costs across the supply chain while boosting customer loyalty. And with consumer influence now stronger than ever, businesses that fail to respond to the demand for improved products and services will feel the impact on their sales figures. Central to this is the pervasiveness of the social, mobile, analytics and cloud (SMAC) era that is redefining traditional retail models that place the consumer at centre-stage.
Machine learning is a subfield of data science that involves the use of algorithms and computing systems capable of learning on their own from new data as it becomes available, identifying patterns and automatically adapting to predict or anticipate future outcomes with an increasing degree of accuracy. For marketers, what this means is the ability to predict customer behaviour and make relevant and personalised offers on the fly to acquire, retain or grow your most profitable customers.
With virtually every brand setting up shop on social media platforms these days, customers have become immune to seeing “just more marketing” come at them through their screens. But this isn't to say that social platforms don't have their place in omni-channel marketing. It simply means that maximising your online reach requires a little more than the odd tweet or like. Online communities are an ideal medium for brands to provide customers with a common base to share experiences, discuss news and trends and also discover new value in their brands in the process. South African online kitchenware store – and community - Yuppiechef is a primary example of a business that hit the community management nail on the head, and as a result, has grown into one of the most loved brands in South Africa.
With marketing budgets increasingly stretched to cover the myriad of channels and touch points out there today, CMOs might feel a little uncertain about whether they’re focusing on the right areas for their acquisition strategies. But even if your marketing spend does deliver positive on-boarding results, it’s still only the first step in a much longer journey with your customer. With the cost of acquiring new business usually five times more expensive than retaining existing customers, and with over 60% of revenue coming from existing customer bases, it only makes sense to build watertight retention strategies that not only retain customers, but preserve the best among them.
It was Wendell Smith, president of The Marketing Science Institute at the time, who in 1956 first advocated customer segmentation as a means to drive market demand, influence brand preference, and improve overall marketing profitability. Smith’s observations in this now 66 year old Journal of Marketing piece still holds some views that are largely relevant to today’s marketing landscape.
Since the early days of commerce, competing brands have grappled with how to be the one that comes to mind first when customers discover a “need” for a product. It is also fairly common knowledge that the cost of acquiring new customers is significantly higher than retaining the most valuable ones, highlighting the need to pre-empt the ebbs and flows of existing customer lifecycle stages and their respective segments as a means to optimise share-of-wallet. In the age of big data and predictive analytics, we’re getting much closer to reaching the level of brand awareness that helps us be present at the decisive moment our customers commit to the purchase.
In my experience as a marketing professional, potential customers almost never just decide to walk away from a purchase - unless given sufficient reason to do so. And, if you’re wondering how a promising list of leads managed to slip through your fingers, it might be time to refocus on the basics of your on-boarding strategy.
I don’t think any of us like it when someone forgets our name. Although anonymity might be the companion of choice for the most socially averse, for the rest of us, the feeling that we matter as individuals carries with it a sense of identity. Marketers who bear this fundamental human attribute in mind are already halfway to creating customer retention strategies that pay dividends. Don’t believe me? Then it might be worth mentioning the Coca-Cola “Share a Coke” campaign which replaced Coke’s universally recognised branding with the personal names of consumers. The result was almost 1 billion impressions on Twitter and over 150 million personalised bottles sold world-wide.
In my eyes, loyalty programs exist for two simple reasons: to motivate increased engagement with your brand and to collect data in order to build deep customer understanding. But they also exist for a third reason: customers want them. In a study by Nielsen, 84% of respondents said they were more likely to choose retailers that offered a loyalty program. Forrester Research have found that 64% of consumers agree that loyalty programs influence where they make purchases, and 50% agree that loyalty programs influence what they buy.
Virtually every retailer or restaurant chain has some type of customer loyalty program these days. In South Africa, there are over 100 local loyalty programs with an estimated 50 million memberships across them. With this said, the challenge lies in building programs that appeal to each individual customer segment that result in increased spending on products and services while boosting loyalty to your brand - a big task in these competitive times. However, what is considered “value” by one customer isn’t necessarily perceived in the same way by the next.
No matter how automated our processes might be, mistakes and mishaps will happen. It’s how we respond as a business in these moments of truth that can turn an unhappy customer into a customer for life. We all make mistakes. It’s what makes us human. It’s how we learn. And as businesses, we implement technology and automate processes to try to minimize the likelihood of human error. However, regardless of the advanced systems we may implement, mistakes and mishaps will happen. It’s how we respond as a business in these moments of truth that can turn an unhappy customer into a customer for life. One such way of responding is something I’ve coined the 3 Hs, which I learned from a personal experience in the early, “bleeding edge” days of e-commerce.
Out of the mouths of babes comes wisdom that can be applied to building lifelong Customer Relationships. Last week, pop musician Taylor Swift came out with an op-ed piece for the Wall Street Journal about the music industry and where it is heading. The piece left me drawing parallels between the relationship musicians form with their fans and the relationship brands form with their customers. In her musings about how social media and the Internet are impacting the music industry, she noted that the one thing that hasn’t changed is the significance of forming a long-lasting bond with your fans:
For companies to survive and flourish in the Age of the Customer, IT Departments must shift their focus from Information Technology to Business Technology to help the business win, serve and retain their customers. Customer experience is a concept that has been around for quite some time. But never before has it been as crucial to a company's success as it is today. According to IT industry analysts, Forrester Research, 92% of companies surveyed in the US say Customer Experience is a top strategic priority.
Observing consumer trends and understanding customers’ lifestyles can lead to moments of genius in meeting customer needs to create a superior Customer Experience. Case in point: Starbucks. According to US-based technology and market research company, Forrester Research, 92% of companies surveyed last year confirmed that the customer experience would be a top priority for them. We are entering what Forrester refer to as the Age of the Customer: “a 20-year business cycle in which the most successful enterprises will reinvent themselves to systematically understand and serve increasingly powerful customers.”