Title: How worldclass organizations use Complex Databases to drive growth and profitability
1How world-class organizations use Complex
Databases to drive growth and profitability
- Ron Swift, Teradata VP of Cross Industry
Solutions
- For Rick Watsons Graduate MBA Class on
Databases
- At The University of Georgias Terry College of
Business
- September 27, 2006 Brooks Hall Room 316 8 AM
2Teradata, Who We Are
- Founded in 1979
- 1.3B division of NCR Corporation
- 4,200 World-Wide Professionals Dedicated to Data
Warehousing
- World class customer list continuing to add 100
new customers/year
- Strong penetration in leading global companies
across multiple industries
- Banking
- Government
- Insurance Healthcare
- Manufacturing
- Retail
- Telecommunications
- Transportation Logistics
- Travel
FORTUNE 2004 Global Rankings
3Agenda
- Characteristics of Complex Databases
- The Evolution of Databases for Business
Intelligence and Active Service Processes
- A Framework for utilizing complex data within
Analytical Business Decision-Making processes
- Case Examples of Realized Successes
- Using Data and DW/BI for Profitability and
Growth
- Best Practices and Recommendations
- Additional Resources available to you
4Consolidated view of source systems
Operational Data
Web Logs
Enterprise Warehouse Management
Industry Logical Data Model
5The Value of a Comprehensive Logical Data Model
Consolidating the Customer View
Enhancing Understanding
6Example Teradatas Financial ServicesLogical
Data Model (FS-LDM) Release 8 with Basel II ERM
Extensions
- Enhancements in support of the Basel II Accord
and Enterprise Risk Management, for example
- Market Risk per the
1996/98
Market Risk Amendment
- Credit Risk swaps, derivatives, collateral
and risk
mitigation, securitization, and parameters
- Pillar 3 structures added to support Basel II
reporting
- Logical Views for Credit Risk, Market Risk
and
Operational Risk
7Integration driving Profitability Management
The Superior Value of Integrated Detailed Data
Business Value
Product/Sales Analysis
Channel Analysis
Customer Analysis
Profitability
Enterprise Analysis
Resource/ Supplier Data
Financial Data
Financial View
Value
EDW Investment
Customer Data
Customer View
Customer View
Transaction View
Transaction Data
Transaction View
Transaction View
Evolution To Enterprise View
Product View
Product Data
Product View
Product View
Product View
Data Mart Elimination
8Knowledge Used for Cross Function and
Multi-Organizational Decisions
CEO
President
Marketing
Payments Receivables
Sales
Product or Services Production
Strategic Tactical Planning
Legal
Data Sources are Organized and Accessible to
all who need to know
9Enterprise DW/BI Applications and Cross-
Organizational Knowledge within EDW
Strategic Objectives and KPIs
Customer Management
Financial Management
Supply Chain Analytics
Demand Chain Management
ProductDevelopment Analysis
CompetitiveAnalysis
HumanResources
Marketing and Services
Procurement Analysis
Fraud and Revenue Assurance
Customer Value Management
Cross-Selling
Sales Effectiveness And Resource Analysis
ChannelManagement
Differential Marketing, Pricing, Contracting
10Teradatas ERM Vision Economic and Strategic
Value
Enterprise Initiative
Capital Mgmt
Compliance (Basel II)
ERM Dashboard
Pricing
RAROC
Integrated Risk Data Warehouse
Enterprise Customer Management
Enterprise Performance Management
Customer Data
Finance and Ops Data
LOB Initiative
11EDW Business Solutions Portfolio
Products
Suppliers
Employees
Customers
Execs/Mgrs
Channels
BUSINESS PERFORMANCE MANAGEMENT
(Strategies, Planning, Forecasting, Budgeting, P
roduction, Process Measures, Financials,
Employee Productivity, Governance, Regulatory,
Services, Reporting, Business Improvements)
TERADATA BUSINESS SOLUTIONS (Designed and Imple
mented for High-Performance, Profitable
Decision-Making)
Demand Chain Management
E-Business Management
Financial/Risk Management
Profitability Analytics
Customer Management
Supply Chain Intelligence
TERADATAs ENTERPRISE DATA WAREHOUSE
WITH INDUSTRY LOGICAL DATA MODELS
Legacy
Oracle
Siebel
SAP
HR
OLTP
Sales
IBM
12The Evolution of Intelligent Marketing and
Communications to Drive Growth, Profitability,
Loyalty, and Value
13The Marketing and Analytical Evolution Focus on
the practices of business intelligence
Increasing Business Value and Impact
Increasing Decisioning Workload Complexity
Increasing Data Detail, Volume, Integration
Schema Sophistication
14Case Study Examples of Successes
15A case study of who is doing it.
Sources Study by Hugh Watson (UGA), Barbara
Wixon (UVA), and Jeff Hoffer (UDayton), 2004
Articles in Numerous Publications including
Harvard Business Review June 2005 The Diamonds
are in the Data by CEO Gary Loveman. Winner of
Numerous awards.
16Harrahs Business Strategy
Established a Brand Identity Based on...
Source Academic Case study, Harrahs High
Payoff from Customer Information, Hugh J. Watson
and Linda Volonino 11/01.
17HARRAHs -
HARRAHs
- 4B / yr 40,000 employees
- 30 Million in Total Rewards
- Compute expected profitability for gaming,
hotel, food per day
- 36 share of gaming budget for Reward Members
grew to 43
- 800,000 surveys / year impacts bonus of
front-line employees
- (All pre-merger stats)
18Closed-Loop Marketing Cycle
Using Compudigm And Teradata
- Gaming Behavior
- Predicted
- Actual
- Demographics
- Other Detail Trans
- Marketing Actions
19Example of Analytical Success
Same store sales growth has increased
significantly -- year over year
Source Annual Reports
20Best Practice Travelocity.com
21Travelocity.com
- The worlds 1 online travel destination
- Users make reservations on most of the world's
airlines, 46,000 hotels, 50 car rental companies,
and 70,000 vacation packages
- Using EDW and CRM to
- Do click-stream analysis to discover how
customers use the website
- Turn lookers into bookers
- Use data to differentiate the company
- Define new customer communications
- Conduct powerful loyalty programs
- Leverage interaction knowledge to provide
relevant and timely bulletins
- Maintain high customer satisfaction and a
conversion rate much higher than the competition
22 Move to Customer Focus
- Using TCRM to
- Analyze web behavior discover how customers use
the website
- Turn lookers into bookers
- Conduct powerful loyalty programs
- Use CRM to differentiate the company
23The Result Travelocitys CRM ROI
- CRMs incremental lift over baseline
- 25 lift in booking conversion for recipients of
event-driven campaigns such as post-booking and
new member welcome
- 50 -100 lift in bookings for recipients of
targeted email promotions
- 35 improvement in booking conversion for
newsletter subscribers
24Who is doing it... Union Pacific Railroad
- The Goal
- Gather data into one location for an enterprise
wide view that provides better data quality,
integration of silo legacy data,
synchronization of the business, and easy access
by business users - Utilize the EDW to drive revenue growth, improve
cost management, and gain competitive
intelligence
- The Solution
- Knowledge Centre serving over 4000 users asking
175,000 questions every day
- Applications supported by the EDW include billing
resolution, locomotive utilization, car
management and forecasting, business analysis,
revenue variance analysis, cost and profitability
measurement, price management, customer services,
and others - The Performance Value
- Estimated benefits are in excess of 100 million
each year
- Improvements in asset management, revenue
collection, equipment utilization, profitability,
planning, and customer relationships
- 24 hour instant on-line access
25Case Study Mobile Company
1 Year Payback by Significantly Reducing Churn
Marketing Areas Identify, Predict and Manage Ch
urn Customer Segmentation Creation of New
Offerings
- Accurate prediction of churn candidates within 15
days
- Identification of reason for potential churn
- Proactive action by Customer Service Reps to
retain customer
- Identification and targeting of most profitable
customers
- Development of custom offers (i.e. Regional
Service Plans) in a day, not weeks
- Higher take rate and increased offer
profitability
26Case Study Mobile Company
- Customer historical call mix analysis in minutes,
not days
- Sales can propose custom package for business
customers based on usage
- Higher win rates, more calls by sales
- Prompt knowledgeable response to customer
complaints by engineering
- Instant access to call records
- Proactive identification of subscribers with
dropped calls
- Invoice quality control
- Proactive identification of erroneous bills
before sending to customer
Operational Areas Increased Sales Productivity b
y Commercial Salesforce Improved Customer S
ervice
27Using Customer Knowledge and Channels to Increase
Profitability
The most powerful effect of Customer Relationship
Management is on the bottom line!
- 2-Channel Shoppers are twice as likely to shop in
the
- store and spend twice as much
- 3-Channel Shoppers--web, catalog and store--are
three times as likely to shop in-store and spend
three times as much.
- 30-40 of sales at Sears.com involve customers
purchase online but then pick up their products
at a Sears store.
- 20 of those pick-up customers then buy more
products in the store
A tri-channel customer is worth between 5-10
times that of a one-channel customer and between
2-3 times a customer that shops using 2 channels
- Average JCPenney.com customers spend 121 per
year
- Yearly spending increases to 502 if they also
use the catalog
- Yearly spending more than doubles to 1,050 if
they use the catalog stores as well.
28- Segmentation
- Defining, satisfying, growing, interacting,
building, selling, profiling, modeling, RFM.
- Focusing on segments with the highest value and
best potential for advancement.
- Using detailed knowledge to gain ROI and
increased profits.
- Product/Affinity Analysis
- Identify product affinities
- Understand what customers buy/when/how/RFM
- Drill down to quickly explore patterns (active DW
datasets)
- Campaign / Interaction Management
- Build / Model / Know and Re-Use Relevant customer
communications
- Drive relevant and timely personalized offers
- Template process and verbiage for reuseable
Targeted Campaigns
- Integrate with segmentation, modeling, and
communications
- Learn from Interactions in person or on the web
29New Strategies for combining key Analytical
Processes and Integrated Data to drive actions
Pattern Detection
Customer Behavior Analysis
Cross-Segment Analysis
Percentile Analysis
Response Analysis
Product/Affinity Analysis
30Segmenting customers and using event-based
marketing to drive revenues and profits
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32Using Information Access and Analytical
Infra-Structure can be utilized for driving growth
Direct Marketing
Relationship
Channel
Marketing
Datamart
Datamart
Information
Extermal
Data
Research
Data
Internal
Methodologies
Predictive Marketing
Credit Risk
Warehouse
Warehouse
Databases
Market
Datamart
Intelligence
Product
Datamart
Cards Direct Marketing
Global HR
Life event
identification
Brand Management
Communication
Effectiveness Tools
Information Management
Distribution
and micro market
Database Marketing -
Sales Program
analysis
Intelligent/Predictive Marketing Algorithms
Management
Campaign
Segment
Requirements
Pricing
Statistical
Identification
Segmentation
Methodologies
Optimisation
Models
methodology
standards
Individual
Market
Opportunities
Prospects
Source NAB
33Customer Knowledge through Analytical CRM Techno
logies and EDW
- Profiler is available on the Bankers Desk top
34The cube, a concept developed at the National,
is now used in every Database CRM campaign. The
performance of each cell is the basis of
selection for the next round. Over time the
best combination of channel, offer and target
market is identified and future campaigns will
use only these cells. With this process the
cube effectively acts as a continuous
improvement process.
More information (Booklet)
35Examples of a Few of the ways our customers have
used Teradata DW and CRM analysis
- National Australia Bank
- Is using personalization tools event-based
triggers to meet customers at the point of need
create optimal customer experiences
- Achieved greater velocity - initiating 100 major
campaigns in six months
- Generated 570,000 sales leads in one year,
representing 4.4 billion in new business
- Achieved retention rates of 98.4 (88 would
recommend the bank to acquaintances)
- Bank of America
- Is using "event-based triggers" to reach out to
customers via large deposits, withdrawals,
insufficient funds, and other "significant"
events - Followed up on 6,000 identified leads in the
first five weeks with Teradata CRM - and 40
percent generated a sale or service opportunity
- Generated 1 million in new business in one
district in one week
- Has achieved customer satisfaction at "9 or 10...
on a 10-point scale"
36Summary and Recommendations
37The NCR Advanced StorePersonalized Direct
Communications
- Personalized Marketing To Mobile Customers
- Provides a direct response channel for
personalized marketing to your mobile customers
- Leverages rapid growth of text messaging to
attract new customers target your existing
customers
- Cost effective channel to drive results by
influencing individual customer behavior
- Right offer to right person at right time and
place
- Bounce back promotions, up selling, cross
department promotion
- Communication of marketing program
- Utilizes wireless messaging to increase sales,
cut costs, and improve productivity
- Carrier-grade platform hosted software, nothing
to install (ASP)
- Implement programs across networks, applications,
devices
- Technology, relationships and services to get
business results
38Generating More Visits, Sales, and Profits
All XYZ Soda products are 25 off today!
Visit your local Rons Grocery
Authorization code K1RL882 Expires on 10/31/
05 Visit www.RonsGrocery.com to learn about
new exiting products special promotions
designed for you !
- Public promotion to drive store traffic
knowledge of loyalty program
- Toll free call or web to learn about promotions
and other offers
- Private offers delivered to targeted customers
who have opted in
39 Additional Resources
- Many case studies white papers at
www.teradata.com
- Special Defying the Limits Publications at
www.crmproject.com Several articles by Ron
Swift
- Article Mastering Analytical Marketing
Initiatives
- Article Optimizing Customer Experiences
- Article Accentuating Customer Profitability
- Article The New Business Opportunity through
CRM
-
- www.TeradataUniversityNetwork.com (for
Professors)
- www.TeradataStudentNetwork.com (for Students)
- Teradata Center for CRM at Duke Univ.
www.teradataduke.org
- Excellent Literature and Books
- (see sources in these slides)
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41Thank you, Please feel free to contact me
For More Information review these books
Managing Customer Relationships by Peppers and
Rogers
Accelerating Customer Relationships by R. S. S
wift
The Value Factor by Lars Nyberg and Mark Hurd
Speaker Contact Ronald S. Swift - Teradata - a
Div. of NCR Corp. 1413 S.W. Osprey Cove - Port St
. Lucie, FL 34986-2018 Office Phone 1-772-344-16
22 Email Ron.Swift_at_NCR.com
42How world-class organizations use Complex
Databases to drive growth and profitability
FINI
- Ron Swift, Author of Accelerating Customer
Relationships
- and Teradata - Vice President, Cross Industry
Solutions
- For The Terry College of Business at Univ of
Georgia
- Dr. Rick Watsons Graduate Class in Database MIST
7800