Download Actionable Marketing Analytics using Spotfire

Actionable Marketing Analytics using Spotfire
It is an exciting time to be in marketing! Today the combination of vast new
sources of information and data—plus powerful analytic tools to extract insight
from that data—means that an analytic-savvy marketer can propel his company
forward in ways not possible just a few years ago. TIBCO Spotfire® is an especially
powerful tool for the marketer: with Spotfire, you don’t need to be a data scientist
or computer wiz to tame data and develop insights. With Spotfire you can seize
new business opportunities and avoid risk with unmatched speed and flexibility
using interactive dashboards, visualizations, and predictive and event-driven
analytics on any device.
WHY SPOTFIRE?
• Powerful inter-connected visualizations easily reveal big picture market views
and facilitate communication between marketing teams.
• Spotfire sets the standard for visualization-based predictive analytics.
• Powerful geo-spatial layering functionality can accurately position locations on
a map chart.
• Drag and drop business modeling using state-of-the-art techniques provide
sophisticated, self-service business intelligence to even novice users.
• Powerful and easy to create visualizations reveal the Pareto Principle, a
distribution reflective of the purchase patterns for most companies’ customers.
• The ability to create custom visualizations allows you to look at your business
the way you think about your business.
• Availability of R’s huge library of procedures for clustering (K-means,
hierarchical, affinity, etc.) and other analytics help you gain actionable insight
from advanced analytics.
• TIBCO® Enterprise Runtime for R (TERR), which is built into Spotfire, delivers
unrivalled speed on top of enterprise-class stability without sacrificing any of
R’s flexibility.
• Spotfire’s experienced marketing analytics specialists can be leveraged to
provide analytic frameworks, Spotfire templates, or professional consulting for
advanced analytic projects.
Spotfire customers have exploited these powerful Spotfire capabilities to perform
many types of marketing analytics. This document showcases what is possible
with Spotfire customer use cases.
DATASHEET | 2
CUSTOMER SEGMENTATION
Marketers seek to understand customer segments
to gain insight into business opportunity and
simplify marketing strategy. Segmentation can be
based on geography, industry, company size, other
firmographics, purchase patterns, etc. Often the
challenge is to generate a small enough number of
segments that a strategy can be broadly understood
and practically implemented.
• Inform in-store marketing
• Provide better market sizing data for planning and
business strategy
BENEFITS OF CUSTOMER SEGMENTATION
The application of customer segmentation can lead
to increased revenue. Customer segmentation can:
• Inform new product-based loyalty offers
• Guide the development of marketing campaigns
• Serve as the engine for linked-purchase promotions
• Provide better market sizing data for planning and
business strategy
PREDICTIVE ANALYTICS: PROPENSITY-TO-BUY
Propensity-to-buy (P2B) scoring grades the
likelihood that a customer will purchase a particular
product or service. The purchase could be from your
company or a competitor and is usually relative to
a time period, such as within the next six months.
The scoring model can be based on the customer’s
segment, past purchasing patterns, and exogenous
factors such as economic conditions. Scores can be
used to optimally focus sales and marketing efforts
on the best target customers.
STORE SEGMENTATION
Stores vary in clientele, location type, channel, and
product mix sold. Each store serves a micro market
and is limited by channel and available products.
Store segmentation can provide a meaningful
framework for adjusting strategy to best serve micro
markets. A comprehensive store clustering process
will take into account historical product sales by
category, channel, neighborhood demographics, and
makeup of customer segments.
BENEFITS OF STORE SEGMENTATION
Store segmentation can lead to better use of store
resources and reduced cost ratios. It can:
• Simplify store planning strategy
• Optimize use of aisle/counter space
BENEFITS OF PROPENSITY-TO-BUY SCORING
P2B scoring can lead to higher return on marketing
activities and greater return on marketing investment
(ROMI). It can:
• Provide very specific targeting of marketing offers
• Supply a basis for focusing marketing campaigns
• Guide planning for future product development
and business strategy
DATASHEET | 3
PURCHASE SEQUENCE AND
BUNDLING ANALYSIS
Customers typically fall into patterns of purchase
behavior that can be described by purchase
sequencing and product bundling. Understanding
patterns can help you promote the most appropriate
next product for purchase, illustrated by the tactic
used by online retailers: “Customers like you have
also bought . . .” But for companies that offer
many products, the possible combinations grow
exponentially, which makes a next-purchase program
challenging to implement.
Visualization can greatly help with this analysis,
which is part science and part art.
• Provide offers and promotions at the optimal time
for a customer
• Provide marketing teams with focus and
orientation around specific customers
BENEFITS OF PURCHASE SEQUENCE AND
BUNDLING ANALYSIS
Purchase sequence and bundling analysis can lead to
increased revenue. It can:
• Identify purchase combinations that warrant focus
• Be the basis for a next-purchase offer program
• Aid the communication of offer promotion programs
WALLET MODELING
A customer’s “wallet” for a particular product is how
much they are expected to spend on that product
category in a given year. This expected expenditure
can be modeled using total addressable market inputs
from industry analysts together with the same kinds of
inputs that go into propensity-to-buy models.
BENEFITS OF WALLET MODEL ANALYSIS
Wallet models can lead to higher return on marketing
activities and greater ROMI. They can:
• Provide actionable customer-level wallet share data
• Provide for very specific targeting of
marketing offers
TARGETING
Targeting is the application of segmentation,
propensity-to-buy scoring, and purchase pattern
analysis to get the biggest bang for the buck by
focusing marketing programs and sales efforts
on the right prospects. In addition to missing
good opportunities, poor targeting can result in a
negative impact on brand perception if a customer is
repeatedly spammed with inappropriate offers.
BENEFITS OF TARGETING
Targeting can lead to higher return on marketing
activities and greater ROMI. It can:
• Enable a marketing organization to look at its
interactions from the customer’s perspective
• Reveal market share for a region, vertical, or
other segment
• Align planning around macro views of the market
and customer segments
DATASHEET | 4
ATTRIBUTION ANALYSIS
Attribution analysis gets at the question of what
marketing activity or combination of activities
actually makes a targeted customer respond or “raise
their hand.” Typically a customer may be exposed to
a company or product as a result of many marketing
activities (“marketing mix”). But which activity or
activities induced the response? A subset of this
analysis focuses on the multiple offers that are
presented to a customer via the web including the
company’s web sites, search engines, third-party
sites, etc.
• Guide the development of a more optimal
portfolio of marketing campaigns
• Free up marketing personnel for critical
marketing activities
BENEFITS OF ATTRIBUTION ANALYSIS
Attribution analysis can lead to higher return on
marketing activities and greater ROMI. It can:
• Guide the development of a more optimal
portfolio of marketing campaigns
• Reduce costs by eliminating marketing events and
activities that are redundant
• Help a marketing organization adjust to and
optimize web marketing
A/B TESTING
A/B testing is a powerful and dynamic learning
approach that many marketing departments
employ. Key to its success is the development of
appropriate sample sizes and performance measures.
By comparing time series plots and measuring the
significance of observed differences, a marketer can
learn what is working and what is not. Uplift models
can identify subgroups that respond differently and
that should receive different messages. This analysis
can inform a more intelligent messaging strategy.
BENEFITS OF A/B TESTING
A/B testing can lead to higher return on marketing
activities and greater ROMI. It can:
MARKETING OFFER/CAMPAIGN OPTIMIZATION
Marketers typically have far more marketing
program ideas and offers than can or should be
implemented. Traditionally the decision about what
types of marketing activities to pursue in a given
quarter is based on “gut instinct” and the judgment
of seasoned marketers; It is not typically a datadriven exercise. Inevitably some activities will be far
more effective than others. Marketing organizations
can benefit greatly by taking a more data-driven
approach based on an understanding of the past
performance of similar marketing activities.
BENEFITS OF MARKETING OFFER/
CAMPAIGN OPTIMIZATION
Marketing offer/campaign optimization can lead to
higher return on marketing activities and greater ROMI.
It can:
• Empower marketers to use data to augment their
instincts and make mid-quarter corrections
• Increase the effectiveness of overall
marketing campaigns
• Identify which programs to discontinue to improve
overall program impact
• Increase customer satisfaction with the
offer experience
DATASHEET | 5
SALE/DISCOUNT OPTIMIZATION
Sale/discount optimization is the application of
segmentation, propensity-to-buy scoring, and
purchase pattern analysis to focus discounting
efforts on the right prospects at the right time. This
classical optimization problem involves identifying
the right level of discounting that will generate a
sale without forgoing too much revenue. The process
of segmenting customers into elasticity bands will
provide the mechanism for offering different discount
levels to different segments.
• Help identify best practices in various teams
• Provide a framework and insights that improve
communication between teams
BENEFITS OF SALE/DISCOUNT OPTIMIZATION
Sale/discount optimization can lead to higher return
on marketing activities and greater ROMI. It can:
• Enable a marketing organization to look at its
interactions from the customer’s perspective
• Provide for offers and promotions at the optimal
time for a customer
• Provide marketing teams with focus and
orientation around specific customers
LOYALTY IMPACT
Turning Customers into Fans™. That’s the goal for
many companies—building loyalty. Many companies
are investing heavily in loyalty programs to make it
happen because loyal brand advocates are like gold.
But how should this investment be assessed? There
needs to be a clear understanding of the impact of
the investment. How much more are loyal customers
spending? How often do they shop with us? What
activities are contributing to loyalty? What is the
optimal investment in loyalty? Proper analysis will
help teams gain these insights.
BENEFITS OF LOYALTY IMPACT ANALYSIS
Loyalty impact analysis can lead to greater ROMI.
It can:
LEAD MANAGEMENT ANALYSIS
The marketing consulting firm Sirius Decisions
has promoted a “waterfall” business model that
has become very popular. This model represents
the stages to produce a booked deal. It provides
a framework on which to assess every lead and
includes certain measurements, primarily conversion
rates between the stages, which can be used to
evaluate current operations and compare against
industry benchmarks. There is a gap between the
reporting of these results and the adjustments that
management needs to make in operations. Good
business visualization will help teams to gain and
communicate insights.
BENEFITS OF LEAD MANAGEMENT ANALYSIS
Lead management analysis can produce increased
revenue. Using Spotfire, it can:
• Provide a common, holistic view of the business
• Help marketing and sales teams diagnose lead
management problem areas
• Provide a clear understanding of the value of a
loyalty program
• Support justification for increasing investment in a
loyalty program
• Demonstrate the increased customer satisfaction
from loyalty
DATASHEET | 6
RECOMMENDATION ENGINE
A recommendation engine can powerfully apply a
company’s transactional data. It informs a store clerk
what product(s) to offer a customer who is buying or
has bought. In addition to product, recommendations
can be based on customer type (segmentation), time
of year, and seasonal promotional considerations.
Proper analysis will reveal the “wisdom of the
masses,” the idea that the buying patterns of
thousands of customers reveal intelligence and
logic that can serve as the basis for guiding the next
customer. Sophisticated retailers have been mining
this intelligence for years.
BENEFITS OF A RECOMMENDATION ENGINE
A recommendation engine can provide clear
guidance to store representatives and save the time
of the clerk and customer. It can:
• Inform a store clerk what product to offer a
particular customer based on what they plan
to purchase
• Improve customer satisfaction based on better
targeting of offers
• Help improve inventory management
• Directly improve the top and bottom line
• Increase customer satisfaction
SENTIMENT ANALYSIS
The sentiments that customers share about your
products and services through social media, emails,
and customer support logs is incredibly valuable
information. Content analytics has advanced such
that text instances can be assessed in terms of
sentiment and topic. The result is a rich set of some
of the most important information available about
your customers and your products. In our fast
moving world, opinions and topics of interest can
change quickly, and a company’s ability to monitor
trending topics and sentiment can be a tremendous
competitive advantage.
BENEFITS OF SENTIMENT ANALYSIS
Sentiment analysis can lead to a richer understanding
of the issues important to customers and helps
optimize the time and efforts of marketing, customer
service, and product development teams. Sentiment
analysis can:
PREDICTIVE ANALYTICS:
RETURN ANTICIPATION
Your business can reduce the costs associated with
product returns by anticipating them and actually
preventing some of them. Predictive models can be
developed that correlate customer attributes and
buying behavior with product returns. The results
can flag purchases with a high likelihood of being
returned. The return costs and predictions can
identify opportunities to interact with a customer
using an offer that will avoid a return and its
associated costs.
BENEFITS OF RETURN ANTICIPATION
Return anticipation can lead to a reduction in returns
and reduced cost ratios. It can:
• Help manage store inventory
• Provide the marketing team with new
campaign ideas
• Help customer service teams better plan their
response to specific issues
• Guide product development teams to make
product changes that customers value
DATASHEET | 7
TRADE AREA ANALYSIS
The trade area is the primary geographic region that
a store serves. It’s important to understand the type
of customers reflected in the demographics of a
store’s trade area to determine the optimal product
inventory and general marketing strategy. A business
can study trade area demographics of stores
individually or as part of a broad store segmentation
exercise. A rich map-based analysis can aid in the
communication and adoption of a trade area strategy.
BENEFITS OF TRADE AREA ANALYSIS
Trade area analysis can lead to increased revenue.
Using Spotfire, it can:
• Identify the profile of a store’s clientele
• Determine a store’s segment and aid in
strategic planning
• Assess the overlap with the trade area of a
competitor’s store
• Inform a more optimal product inventory strategy
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©2014, TIBCO Software Inc. All rights reserved. TIBCO, the TIBCO logo, TIBCO Software, Spotfire, and Turning Customers into Fans are trademarks or registered
trademarks of TIBCO Software Inc. or its subsidiaries in the United States and/or other countries. All other product and company names and marks in this
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12/08/14