Identifying Prime Customers With Analytical CRM
With today's business environment in a state of contraction and uncertainty, it has become a real challenge for financial services companies to maintain a lead over the competition. With more than 1,200 personal financial services companies competing in Hong Kong, PrimeCredit Limited recognized the need to devise and implement an analytical CRM solution that would help the company establish a strong foothold in the local market and gain a competitive edge.
PrimeCredit knows that it is not just important to understand their customers – it is absolutely essential to know who to target in a marketing campaign and why. As a director of marketing for PrimeCredit in Asia, Daniel Chong realized that the most profitable way to acquire and retain customers would be to make use of an invaluable resource – customer data. The company therefore chose to invest in SAS data warehousing and data mining technology.
"An effective advertising campaign can raise the public's awareness of the company, but it might not bring us the business we desire. Hong Kong's financial services market is extremely competitive; customers are continuously subjected to thousands of advertisements every day, so we needed to adopt a more targeted approach," says Chong. "PrimeCredit is looking to acquire and retain customers by understanding their buying and payback patterns, while minimizing bad debts and write-offs at the same time. It is extremely important for us to partner with a trusted vendor, such as SAS, to turn raw data into an intelligent tool for reducing credit risk and increasing revenue by selling new products to existing and potential customers.
"Due to the lack of local public information, it is difficult to go out and acquire demographic data the way companies can do in many other parts of the world," Chong adds. "Therefore, the data we build up internally takes on exceptional importance. With the right approach, the correct infrastructure and the best analytical solution, we can use this data as a real resource that can give us a huge competitive advantage."
The newly installed SAS data warehousing system houses the information in a manner that makes it instantly accessible and easy to analyze and monitor. At the same time, SAS Enterprise Miner data mining software helps to reveal trends, explain known outcomes, predict future patterns and identify critical factors that can secure a desired effect on a company's bottom line.
"There has been obvious improvement in the response rate of PrimeCredit's direct mailings, because our marketing offers are now much more targeted. We have seen an increase in customer feedback after sending out only one-sixth of the previous number of mailers to selected potential customers," Chong says.
PrimeCredit evaluated multiple data warehousing and analysis software vendors for a period of six months before choosing SAS. According to Chong, the greatest advantages of SAS were its professional consulting services, coupled with its flexibility and expertise in designing the credit scoring, customer retention and acquisition modeling. PrimeCredit has partnered with SAS for two years now.
Since the implementation of the SAS solution to master the company's data access, management, analysis and presentation, the relationship between PrimeCredit and SAS has blossomed. Chong says that SAS' full-service consultants offered invaluable insight into how data needs to be filtered and regrouped before it's ready for quality analysis. "There's no point in analyzing information irrelevant to our needs. It is important for us to have continuous on-site support from SAS so that every data discrepancy can be identified and fixed promptly," Chong says.
Data mining segments PrimeCredit's customers into profitability groups to develop cost-effective service levels and targeted marketing campaigns. It also will be used to develop customer scoring and retention models in cross-selling and up-selling strategies. The data generated from the mining technology can provide relevant, reliable and timely statistics vital to planning and decision making across departments.
Another advantage of SAS data mining is the ability it gives PrimeCredit to conduct internal analysis on the profitability of its product and branches, allowing the company to identify underperformers and evaluate the ratio of operational costs to revenue generated by them.
"Data mining allows companies to address a wide range of business issues by generating questions we may never have thought of and revealing hidden patterns in customer data," says Eddie Leung, director of professional services for SAS Hong Kong. "Using SAS solutions as business applications, PrimeCredit can transform raw data into a plan to reduce credible risk and increase revenues by providing new products that are suitable to existing customers."
In the near future, PrimeCredit plans to extend its customer acquisition services to the Web. "I believe SAS, as a strategic partner, can continuously support us on housing and analyzing customer data collected from all channels: call centers, retail branches and Web," Chong concludes.
The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.
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Gain competitive advantange in a financial services market inundated with advertising.
SAS data warehousing and data mining gives PrimeCredit the intelligence it needs to gain and retain the most profitable customers.
“It is extremely important for us to partner with a trusted vendor, such as SAS, to turn raw data into an intelligent tool for reducing credit risk and increasing revenue by selling new products to existing and potential customers.”
Director of Marketing