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Case Study

Case Study Cross-Sell Opportunity Formulation for a reputed bank Building a Decision Tree Model to help

Cross-Sell Opportunity Formulation for a reputed bank

Building a Decision Tree Model to help identify customers susceptible to cross change initiatives

Client: A new bank moving to target its liability customers for asset products

susceptible to cross change initiatives Client: A new bank moving to target its liability customers for

Summary

Summary Business Objective • • Our client was trying to find out ways to gain wallet-share

Business

Objective

Our client was trying to find out ways to gain wallet-share of it

Our client was trying to find out ways to gain wallet-share of it

customers (savings & current a/c holder)

customers (savings & current a/c holder)

It was looking for a Decision Tree model to give likely list of leads

It was looking for a Decision Tree model to give likely list of leads

so as to focus the marketing campaigns towards them.

so as to focus the marketing campaigns towards them.

Cequity identified the variables which makes the difference

Cequity identified the variables which makes the difference

through rigorous statistical modeling and analysis

through rigorous statistical modeling and analysis

Once the variables were identified , the best possible path to reach

Once the variables were identified , the best possible path to reach

high propensity customers through decision tree modeling

high propensity customers through decision tree modeling

Solution

Results

• •

• •

• •

We built a quantifiable model for client to reach the best leads

We built a quantifiable model for client to reach the best leads

through decile treatment

through decile treatment

Based on the behavior pattern, we could predict the right offerings

Based on the behavior pattern, we could predict the right offerings

for each segments.

for each segments.

There was a huge lift in conversion rate for our client using the

There was a huge lift in conversion rate for our client using the

Cequity model. Marketing & campaigning spends were also

Cequity model. Marketing & campaigning spends were also

optimized.

optimized.

Business Objective

Business Objective Our client was facing low conversion rate in cross-selling the Assets products to its
Our client was facing low conversion rate in cross-selling the Assets products to its Liability
Our client was facing low conversion rate in cross-selling the Assets
products to its Liability customers. Although the Liability and Asset
products have been on the market for quite some years, the
overlaps for its customer into these Venns were very low.
But it would have been imprudent to expend marketing resources
on entire liability customer base with for cross-selling them asset
product. It was desperately looking for a model to focus its
resources better.
We built a Cross-Sell model taking into consideration all factors like Demographics, Transactions, Psychographics and
We built a Cross-Sell model taking into consideration all factors like
Demographics, Transactions, Psychographics and Response from
previous campaigns.
The result was evolution of a non-linear model for predicting the
chances of buying its asset products within its liability customer
base.

Solution – Finding out micro segments

Solution – Finding out micro segments Uni-Variate Analysis Multi-Variate Analysis Criteria Marital Status = XXX
Uni-Variate Analysis
Uni-Variate Analysis
Multi-Variate Analysis
Multi-Variate Analysis
Criteria Marital Status = XXX Ledger balance < XXX Number of Fixed deposits < X
Criteria
Marital
Status =
XXX
Ledger
balance < XXX
Number of
Fixed
deposits < X
Amount
credited in
last x months
> xxx
Response Criteria Rate Quantum leap in targeting the right customers Marital Status = Y 1
Response
Criteria
Rate
Quantum leap
in targeting
the right
customers
Marital Status =
Y 1 %
XXX
Y 2 %
Marital Status =
XXX & Ledger balance
< XXX
Marital Status =
XXX & Ledger
Y 3 %
balance < XXX
&Number of Fixed
deposits < X
Marital Status =
XXX & Ledger
Y 4 %
balance < XXX &
Number of Fixed
deposits < X & Amount
credited in last x
months > xxx
Response Rate X 1 % X 2 % X 3 % X 4 %
Response
Rate
X 1 %
X 2 %
X 3 %
X 4 %

Solution – Analysis

Solution – Analysis Uni-Variate Analysis Multi-Variate Analysis Response Response Criteria Criteria Rate Rate
Uni-Variate Analysis
Uni-Variate Analysis
Multi-Variate Analysis
Multi-Variate Analysis
Response Response Criteria Criteria Rate Rate Marital Empower with The Power of Multi-Variate Marital Status
Response
Response
Criteria
Criteria
Rate
Rate
Marital
Empower with The Power of Multi-Variate
Marital Status =
Status =
Y 1
%
X 1 %
XXX
XXX
Analysis
Ledger
balance < XXX
Y 2 %
Marital Status =
XXX & Ledger balance
< XXX
X 2 %
Marital Status =
XXX & Ledger
Number of
Fixed
deposits < X
X 3 %
Y 3 %
balance < XXX
&Number of Fixed
deposits < X
X 4 is much
much higher
than Y 4
Marital Status =
XXX & Ledger
Amount
credited in
last x months
> xxx
X 4 %
Y 4 %
balance < XXX &
Number of Fixed
deposits < X & Amount
credited in last x
months > xxx

Increasing Gain – “Good” customer characteristics

Solution – Building the Decision Tree

characteristics Solution – Building the Decision Tree     Supervised   Criterion # 1  
   

Supervised

 

Criterion # 1

 

Classification

 
   

Gain

Gain

on 6,00,000

 
   

18%

X 1

 

Criterion # 2 (montly avg balance)

 

%

< INR xxx

INR xxx – xxx

INR xxx – INR xxx

INR xxx – INR xxx

> INR xxx

 

Gain

Gain

 

X 2

28%

%

Criterion # 3 (MOB)

 

<

x m onths

x – y m onths

y-z m onths

z+ m onths

 

Gain

Gain

 

X

35%

3

%

Criterion # 4 (# of debits)

0-a debits

a-b debits

 

b-c debits

c-d debits

d+ debits

 

Gain

Gain

 

X

39%

4

%

 

Self employed

Em ployed with Corporate setup

Sm all scale business person

Criterion # 5 (occupation)

Gain

Em ployed with PSU

Gain

X

5

45%

   

%

Criterion # 6 (age group)

 

p-q yrs

q-r yrs

 

r-s yrs

> s yrs

 

Gain

Gain

49%

X 6

%

Increasing Gain – “Good” customer characteristics

Solution – Building the Decision Tree

characteristics Solution – Building the Decision Tree Supervised Classification Criterion # 1 Gain Gain on
Supervised Classification Criterion # 1 Gain Gain on 6,00,000 18% X 1 % Criterion #
Supervised
Classification
Criterion # 1
Gain
Gain
on 6,00,000
18%
X 1
%
Criterion # 2
(montly avg
balance)
< INR xxx
INR xxx – xxx
INR xxx – INR xxx
INR xxx – INR xxx
> INR xxx
Gain
Gain
28%
X 2
%
Criterion # 3
(MOB)
< x m onths
x – y m onths
y-z m onths
z+ m onths
Gain
Gain
X
35%
3
% 0-a debits a-b debits b-c debits c-d debits d+ debits Gain Gain X 39%
%
0-a debits
a-b debits
b-c debits
c-d debits
d+ debits
Gain
Gain
X
39%
4

Criterion # 4 (# of debits)

Criterion # 5 (occupation)

Criterion # 6 (age group)

% Self employed Em ployed with PSU Gain Gain Em ployed with Corporate setup Sm
%
Self employed
Em ployed with
PSU
Gain
Gain
Em ployed with
Corporate
setup
Sm all scale
business
person
X
45%
5
%
p-q yrs q-r yrs r-s yrs > s yrs Gain Gain 49% X 6 %
p-q yrs
q-r yrs
r-s yrs
> s yrs
Gain
Gain
49%
X 6
%
Monthly Avg Bal
INR XXX
The Ideal
Months on books
# of debits
x-y months
Profile
b-c debits
Occupation XXX
Age group
q - ryrs

The customers belonging to the adjacent segment would be the preferred target for our cross sell exercise (a given asset product)

7

Results

Results Optimized marketing Increased Response rates and conversions efforts and spend Target right customer
Optimized marketing Increased Response rates and conversions efforts and spend Target right customer with right
Optimized
marketing
Increased
Response rates
and
conversions
efforts and
spend
Target right
customer
with right
product
Identify
customers in
Top Deciles
who have
propensity of
buying an
Asset product
Thank you Customer Equity Solutions Pvt. Ltd. Customer Equity Solutions Pvt. Ltd. Worldwide Offices Worldwide
Thank you
Customer Equity Solutions Pvt. Ltd.
Customer Equity Solutions Pvt. Ltd.
Worldwide Offices
Worldwide Offices
INDIA
INDIA
USA
USA
Mumbai Office: 105-106, 1st Floor,
Mumbai Office: 105-106, 1st Floor,
Chicago Office: 626,
Chicago Office: 626,
Anand Estate, 189-A,
Anand Estate, 189-A,
Grove
Grove
Street, Evantson, IL
Street, Evantson, IL
Sane Guruji Marg, Mahalaxmi,
Sane Guruji Marg, Mahalaxmi,
60201
60201
Mumbai-400 011
Mumbai-400 011
Phone: +91 22 4345 3800
Phone: +91 22 4345 3800
Fax: +91 22 4345 3840
Fax: +91 22 4345 3840
www.CequitySolutions.com
www.CequitySolutions.com