Strengthening Customer Ties in Japan

As the largest credit card issuer in Japan, JCB Co., Ltd. has established itself as an international brand. The company, with 34 million cardholders, offers more than 200 services and 600 types of cards.

Little by little, and with the help of specialists from SAS Japan, JCB has been testing the waters of data mining technology with projects that include everything from protecting customers' vital personal data from hackers to identifying potential catalog recipients.

In July 1999, JCB's sales department began a new data mining project aimed at tracking increasingly diverse and complex customer needs. The new system, implemented in only three months with the help of SAS Enterprise Miner, is integrating such cutting-edge scientific marketing concepts as customer profiling and customer relationship management into JCB's standard business practices.

Already, the results are impressive. With data mining, JCB has quadrupled the rate of customer responses to direct-mail solicitations and initiated a successful campaign to retain current cardholders – achieving a success rate six to 10 times greater than that of earlier campaigns.

Providing the Best Service in the Industry
In Western countries, the credit card industry is typically associated with the financial industry since banks are the primary issuers of credit cards. But in Japan, and more specifically at JCB, there is a strong belief that the credit card industry is a service provider. And JCB works hard to provide the best customer service.

For example, JCB operates the industry's largest call center, where 600 operators receive approximately 8.5 million calls per year. All suggestions received through the center are stored in a database, where the information can be used to further develop the company's services. Enterprise Miner analyzes customer data in new ways, helping executives make strategic decisions about ways to retain loyal customers and attract new ones. JCB hopes to serve its customers for several decades by offering different services for various life stages.

"Everything changes very quickly these days, and customers' needs are diverse and complicated," explains Makoto Nakaoka, manager of JCB's business administration department. "We are trying hard to establish customer-oriented business processes to better understand our customers and offer personalized service as soon as possible. In order to do that, we selected Enterprise Miner from SAS to mine our data."

Improving Segmentation and Customer Profiling
Under the new system, JCB uses data mining technology for two purposes. First, it segments customers to increase the response rate of its marketing campaigns, which in turn increases revenue. Then it uses customer profiling technology to devise a customer-focused sales strategy. The system analyzes how members use their cards, helping JCB identify and retain its most profitable customers.

"By clustering and making associations with the data, we are trying to figure out what customers need. And we would like to polish our business models by repeating the process of planning, doing, checking and practicing," says Nakaoka.

Increasing Customer Response
The project is already showing results. Not only are direct-mail campaigns showing much greater success, Enterprise Miner is identifying new segments of potential customers that traditional marketing methods had overlooked.

"In the past, it had been a very tedious job to arrange all the customers' data for mining. But SAS Enterprise Miner helped us with the process from start to finish," says Nakaoka. JCB's strength is that it doesn't stop at simply analyzing the data. The company tries to maximize customer satisfaction by combining the mined data with the knowledge it has gained from 40 years of experience in the credit card industry.

The Future – Incorporating the Web
What does JCB plan to do with its data mining technology in the future? One goal is to be able to examine customers' needs from every perspective – call centers, Web clickstreams, purchase histories and other sources – to pursue the virtual world of e-business.

"We are looking into developing a service which recognizes customers' needs on demand. Data mining technology will be the core technology to implement this service," says Nakaoka. "We have very high expectations for both Enterprise Miner and SAS Institute Japan, and we are confident that they will help us achieve our goals."

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