Date post: | 08-Jul-2015 |
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Business |
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Deliberate Decision-MakingMaximizing the value of customer-initiated interactions
Matt Cappio
Business Problem
• How do we maximize the value of customer-initiated interactions?
Call Center Branch Online/Mobile
OfferOffer
Offer
Direct Mail
BC
Agent, IVR
Online, Email
ATM
Mobile, SMS
Chat
OfferOffer
Offer
OfferOffer
Offer
OfferOffer
Offer
OfferOffer
Offer
OfferOffer
Offer
OfferOffer
Offer
OfferOffer
Offer
DEPOSITS
INVESTMENTS
MORTGAGE
CARD
“I have an offer – let me find a customer”1“I have an offer – let me find a customer”“I have an offer – let me find a customer”
“I have an offer – let me find a customer”
“You do not know me & ask me multiple times about the same thing.”
“I am not offered solutions based on my multiple relationships.”
“I use Bank of America for convenience but primarily use another bank.”
“The Bank’s associates can’t address all of my business needs.”
A seemingly simple question…with many different answers
But what is the “best” answer?
• No one option can be considered in isolation
• Every option involves “tradeoffs”
• The answer often depends…
• Being deliberate requires a decision-making framework
• Drive Car– Speed: Low– Flexibility: High– Comfort: High– Cost: High
• Ride Metro– Speed: High– Flexibility: Med– Comfort: Low– Cost: Med
• Take Bus– Speed: Med– Flexibility: Low– Comfort: Med– Cost: Low
Optimization in your daily life – How do I get to work on time?
What about customer interaction management?
• The same principles apply
• An optimization software solution generates potential courses of action
• These “scenarios” represent different ways of quantifying and balancing trade-offs
This balancing act is too complicated for a binary, criteria-based approach
Call Center Branch Online/Mobile
Associate Capacity
Relationship Deepening
Credit Quality
Account Production
Customer Engagement
Quality Relationships
Customer Experience Profitability
“Shelf Space”
Scenario BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5
Objective Function N/A Maximize Profit Maximize Accounts Maximize Profit Maximize Profit Maximize Profit
Risk Constraint N/A Max 6.00% Max BAU 6.85% Max 6.00% Max BAU 6.85% Max BAU 6.85%
Profit Constraint N/A No Constraint Min BAU Profit No Constraint No Constraint No Constraint
Investment Constraint N/A No Constraint Max BAU Investment No Constraint Max BAU Investment No Constraint
Risk Eligibility Criteria BAU 15% BAU 15% BAU 15% None BAU 15% BAU 15%
Volume 186,869,244 183,368,592 162,532,177 196,363,693 162,529,046 238,314,147
Projected Response 0.29% 0.26% 0.38% 0.25% 0.32% 0.26%
Projected Accounts 534,420 473,256 620,088 486,850 514,911 626,511
Projected Loss Rate 6.85% 6.00% 6.85% 6.00% 6.85% 6.85%
Projected Profit $154,640,991 $189,136,155 $157,970,870 $199,255,575 $226,459,449 $226,127,652
Marketing Investment $78,485,082 $77,014,809 $68,263,514 $82,472,751 $68,262,199 $100,091,942
Projected Cost to Acquire $147 $163 $110 $169 $133 $160
Projected Profit per Account $289 $400 $255 $409 $440 $361
Data above is for presentation only and does not reflect actual Bank of America marketing plans, performance or targeting
Decrease from BAU
No Change from BAU
Improvement over BAU
Optimization provides the framework for the strategic tradeoff discussion
Direct Mail
BC
Agent, IVR
Online, Email
ATM
Mobile, SMS
Chat
DEPOSITS
INVESTMENTS
MORTGAGE
CARD
Cu
sto
me
r N
ee
ds
& S
egm
en
t St
rate
gie
s
Customer Experience &
Treatment Strategies
“I have a customer – what is most relevant to him/her and beneficial to his/her long-term relationship with the bank?”
“The bank knows me and values my relationship“
“They seem to know what I need and when I need it.”
“The bank isn’t always selling something.”
“There is real value to me in getting all my needs met by one bank.”
• Business Priorities• Segment Priorities• Shifting Customer Needs• Changing Regulatory
Environment
• Product Innovations• Competitive Pressure• Shareholder Return• Strategic Direction• Re-Branding
Deliberate, Customer-Centric, and Mutually Beneficial
Questions?