This is an article from the July 2006 issue of DM Review's Extended Edition. Click on this link for more information on DMR Extended Edition or to download this entire issue in a PDF format. 

REVIEWER: Steve Tipping, customer analysis manager, Britannia Building Society.

BACKGROUND: Britannia BS is a leading UK mutual mortgage provider. We have more than 3 million customers to whom we provide a full range of financial products. Britannia has a strong commitment to try to provide the best in customer management, and we have won many awards for CRM and customer service.

PROBLEM SOLVED: Our customer contact is driven by a full suite of predictive models. Model scores are applied and updated in the marketing data warehouse as part of the regular database refresh. We rely on a full suite of propensity models being available. We became aware that we would need to refresh the existing models more frequently and shorten the lead time to produce new models. A further issue for us was that our team of eight has significantly increased its responsibilities, but not its headcount. The increased modeling requirement was going to put us under further pressure. We turned to Marketing Databasics, a UK-based marketing service provider, to resolve the problem. Marketing Databasics integrated KXEN's automated modeling within the Alterian Marketing Suite to strengthen and speed the analytical process.

PRODUCT FUNCTIONALITY: Modeling-KXEN preprocesses the data automatically, producing optimized binnings - this is very time-consuming in conventional software. Models are then generated in a point-and-click environment quickly, interpreted through easy-to-understand diagnostic tools, and because they can be scored back to the database in seconds, this makes it possible to sense check the scores rapidly. Models are produced in seconds. We can produce a full production model in half a day, compared to the more usual four to five days using traditional techniques. The modeling functionality is used primarily by our two statisticians, who now spend more time thinking about model inputs because modeling-KXEN looks after the model build. We can resource the tool with nonstatisticians when we have a heavy modeling workload. This new Alterian-based technology has given us a 20 percent increase in revenue from direct marketing activity while reducing our spend by 30 percent. We have gained enormously from using Modeling-KXEN in the Alterian environment and would be surprised if there is a faster way to model, segment and score customers available anywhere. An unexpected bonus, however, has been the KXEN segmentation option. "Unguided" segmentation produces results similar to K-means clustering. "Guided" segmentation extends the concept and produces clusters that are optimized against a target variable. This has proven very useful for campaign response analysis, because it allows us to quickly see if there are homogeneous subgroups of responders and nonresponders. This is used almost daily by one of our business analysts who has campaign analysis as part of his brief but is not a statistician.

STRENGTHS: Modeling-KXEN delivers a best-of-breed toolkit for development and deployment of predictive models. Alterian's database speed combined with its powerful data visualization capabilities and with KXEN's intuitive environment for model production.

WEAKNESSES: KXEN does not give the more expert statistical user much control over what the software does, and the Alterian implementation has removed some of the (limited) control available in the base KXEN product. Also, if you can develop models quickly, you tend to have a large number of them, some of which are production and some not. At present, the software doesn't allow you to nominate which models are to be automatically scored to the Alterian database when it is reloaded - so the model maintenance process requires user input. We are working with Marketing Databasics to develop an automated process.

DELIVERABLES: The system supports a full range of customer insight and campaign management activities, and the CRM team is responsible for all customer analysis as well as the planning and operational execution of outbound campaigns via direct mail and a branch messaging system.

VENDOR SUPPORT: Britannia Building Society and Marketing Databasics have worked in partnership for almost eight years - and we have used Alterian software since 2000, with the high-speed database as the platform to hold an extensive marketing data warehouse. The warehouse is run as a hosted system, managed by Marketing Databasics, from whom we receive a high level of technical support.

Alterian Marketing Suite - Modeling-KXEN
1 North LaSalle
Chicago, IL 60602
(312) 704-1700

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