Case Studies Financial Services Predictive Analytics helps in Strategic Marketing!

Project Objective

To help the client position his products, identify cost centers in the marketing process, identify white spaces across regions and to segment their customers.

Client
Leading mortgage company for self-cert mortgages in UK

Approach
The mortgage firm had an information system, which recorded the new customers acquired, transactions, products sold, etc. This huge data dump makes no sense to the senior management of the mortgage firm unless it was converted into presentable information.

As part of strategic marketing, one of the most significant steps is Environment Scanning. The firm was analyzed with respect to its competitors in terms of pricing, distribution, promotion, advertising and market segmentation.
  • Pricing: The break-up of the Net Present Value for each product into costs lead to significant insights as in where the firm can reduce its costs in its marketing process to improve on its profit. Each of the products of the firm was plotted on the BCG Matrix (Market Growth Rate Vs Relative Market Share) to get an idea of the cash cows and the stars in the portfolio.
  • Distribution: Distribution being the fourth element of marketing mix plays a significant role on a products success. The secondary data on the market was analyzed for the Market Share of the firm in various regions and product categories. This helped in identification of White Spaces, where the firm could concentrate on its marketing efforts
  • Promotion: The brokers are paid a commission based on the number of products they sell. Based on the historic data a much better commission scale was worked out which lead to a Win-Win Situation for the broker as well as for the firm. We also provided scope for filling up white spaces in the market by giving better commission to brokers in certain regions where there is very less penetration.
  • Customer Segmentation: The customers were segmented on the basis of loses. The historical data was used as a training dataset to predict the segments of the current customers. Based on the segmentation of the current customers the management was able to forecast its net profit under several scenarios.
Solution
The position of the firm was plotted with other competitors on a BCG matrix. High cost centers were identified in the marketing process. Penetration of the firm's products in different regions was calculated, and low penetration regions were identified. Broker Commissions were optimized based on 'the right incentive for the right person'.

Benefit
The client was able to understand where his firms products stood with respect to his competitors thereby decide on whether to re-position if not satisfied with the current position. We also identified profitable spaces in the market where they could sneak in.
 
 
To use analytics for environmental scanning of the firm
Leading mortgage company for self-cert mortgages in UK
Helped in identifying the current positioning of the products of the firm.
- Profitability Analysis for Mortgage Lenders
 
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