Maximizing CustomerValue through Data-driven Marketing

Uroš Breznik, BDOBarbara Frank, Data Science Project Manager

The Pain

Churn Definition in FinanceSupporting Slide

Customer Churn:

When an existing customer stops doing business or ends

the relationship with a bank on the level of a product or in

total.

Data Science Approach:

Build models using data to understand when and why

your customers stop interacting with your

business.

In 2012, 50 % of customers, globally, either changed their banks or wereplanning to change

Cleopatra Financial for Churn Prediction

Cleopatra Financialpredicts churn andmeasurements to retainclients with up to 96 % accuracy.

Churn Hurts Sales, Hurts Bank

Total Revenue – Total Cost

ROI = -------------------------------------- x 100

Total Cost

Cleopatra FinancialChurn Model - ROI

ROI of Customer RetentionSupporting Slide

CAC (customer acquisition cost) in banking = approx.

300 € per customer

In case aunnual churn rate =

20.000 customers

6.000.000 €needed for acquisition

annually

Churn prediction model with 80 % accuracy = 16.000 potential churners

identified

Retention rate 30 % = lowered

acquisition costs by1.600.000 €

Cleopatra Financial Enables Data-driven Decision Making

Offer selection

Segmentation

Product pricing

Retention

Content creation

Customer service

Possible Upgrades for Cleopatra Financial

EWS (early

warning system)

Scoring

Fraud detection

Treasury management

Risk management

R&D

Supporting Slide

DEMO

Useful Information for Different Purposes

Output from deep learning prediction

model

Output from deep learning model explanation module

Data from customer data mart

360o view of customerthese are input variables to the model

Business rules defined by marketing and/or product development department

Deep learning model

Used for defining

Customer „Health“ Scorecard

Information available to customer relationship manager in a branch.

Churn Facets

Information useful for controling, marketing and product development departments.

Correlation Analysis

Information useful for marketing and product development departments.

Supporting Slide

Cleopatra

Cleopatra Financial

Cleopatra Product Family

Cleopatra Enterprise

Cleopatra Industrial

Thank you

Most of the world will make decisions by either guessing or using their gut. They will

either be lucky or wrong.

Suhail Doshi