Marketing Analytics at IBM - export
- 1. © 2011 IBM Corporation IBM Client Advanced Analytics in support of IBM Marketing and Sales Spyros Kontogiorgis, PhD. “Analytics and the 21st Century MBA” Symposium, Oct 21 2011. George Washington University’ and IBM’ Analytics Solution Center.
- 2. © 2011 IBM Corporation IBM Client Insights 22 A century after its inception, IBM operates a broad line of business in Services, Software, Hardware and Financing in 170 countries. 2 Providing outsourced IT infrastructure services and business process services to accelerate projects and initiatives Providing professional services for strategy, planning and implementation of transformative projects Providing advanced computing, storage and semiconductor and products with energy efficient technologies Providing tools and middleware that enable our clients to gain business insights, integrate systems, enhance processes and manage application environments Providing a wide spectrum of client support and solution value by integrating, selling and distributing IBM products & services Providing financing solutions that can be customized to address specific client needs, from competitive rates to flexible payment plans and loans Corporate Providing best of-class business operations, helping us identify trends, and planning for the future Providing inventions and new technologies and working on multidisciplinary projects that lead to prototypes or long-term projects Global Financing Systems & Technology Software Global Business Services Global Technology Services Sales & Distribution Research “Analytics and the 21st Century MBA” Symposium
- 3. © 2011 IBM Corporation IBM Client Insights 3 IBM Business Leaders External Audiences Market Development and Insights - Applying deep market knowledge, insight creation assets, and business expertise to champion actions that drive profitable growth for IBM Provide market headlights to direct plans and strategies Drive winning competitive strategies and actions Embrace the voice of the customer for impact Provide direct access to market insights Provide market headlights to direct plans and strategies Drive winning competitive strategies and actions Embrace the voice of the customer for impact Provide direct access to market insights Clients Maximize return on IBM’s Go to Market investments Develop IP enabling clients to chart courses to greater value Deliver innovative capabilities to address key issues Clients Maximize return on IBM’s Go to Market investments Develop IP enabling clients to chart courses to greater value Deliver innovative capabilities to address key issues Global + Country Collaboration Business performance diagnostics Client acquisition roadmaps Industry growth assessment Channels optimization Define the path to top-line growth and increased profitability Drive country level insights through to execution Global + Country Collaboration Business performance diagnostics Client acquisition roadmaps Industry growth assessment Channels optimization Define the path to top-line growth and increased profitability Drive country level insights through to execution “Analytics and the 21st Century MBA” Symposium
- 4. © 2011 IBM Corporation IBM Client Insights 444 Consulting Root-cause analysis Data mining Statistics Forecasting Optimization Client Analytics Client Analytics combines quant techniques with consulting, to drive actionable outcomes CI Mission: Drive client action and measurable outcomes through the collaborative application of marketing science to IBM’s top marketing and sales issues Capability Business Issue Business Outcomes Client Buying Behavior Analytics Starbursts & cross-selling Increased revenue from clients Higher seller productivity Client-Base Analytics Erosion in key franchises Higher retention of clients in competitive situations Segmentation & Targeting High-potential prospects Higher seller productivity Marketing Effectiveness Demand generation Increased marketing productivity Growth through partner revenue “Analytics and the 21st Century MBA” Symposium
- 5. © 2011 IBM Corporation IBM Client Insights 5 Analytics in Action: Optimizing the mix of Marketing Events IBM executes more than 7,000 customer events annually, with good to excellent results Next to advertising, events are IBM’s largest marketing investment, contributing significant revenue. While, most events are face-to-face (conferences, workshops, road shows), IBM has begun embracing virtual events. “Analytics and the 21st Century MBA” Symposium
- 6. © 2011 IBM Corporation IBM Client Insights 6 Analytics begins by mapping business goals to a quant frame Optimize event portfolio. Reach target audiences (existing and potential customers). Achieve growth objective. Increase events in Growth Markets. Reach clients in all stages of sales pipeline. Reduce non-performing events. Increase virtual activities. Understand event planning strategy and business goals Express the goals in quant terms and select analytic method and tools Work with the client to answer these questions: • What are the key classes of events we need to optimize? What data do we have on them? • What are the decisions? (E.g. select the number of events of each class.) • What is the planning horizon? (strategic vs. tactical.) • What are the drivers? (E.g. maximize the expected revenue, or the expected number of attendees, or the number of events) • What are the operational constraints? (E.g. stay within a set budget, do a minimum of events of a certain type in a certain geography.) • How will we measure the impact of a proposed solution?“Analytics and the 21st Century MBA” Symposium
- 7. © 2011 IBM Corporation IBM Client Insights 7 Analytics leads to an Optimization model, that suggests an event mix to meet the business goals at minimum cost Event Attributes Categorization Objective Awareness, Lead Creation, Lead Progression, Thought Leadership Type Third Party, IBM and Virtual Brand GTS, GBS, S&D, SWG, STG Geography GMU, Japan, NA, NE Europe, SW Europe There are 300 event classes (attribute combinations). For each, we compile historical “averages” of revenues and costs. The optimization model produces a mix of event classes, which – Uses high-ROI events. – Maximizes overall win revenue. – Keeps the total cost (budget) flat. – Aligns event revenue to Finance brand/geo projections for overall IBM revenue. – Maintains Business presence and continuity. – Makes special provision for growth in virtual events. To achieve this, the model optimally trades events across brands, geos and classes, using ILOG CPLEX. “Analytics and the 21st Century MBA” Symposium
- 8. © 2011 IBM Corporation IBM Client Insights 888 IBM’s ILOG Optimization Studio is the best-in-class tool to implement the analytical model ILOG Optimization models can identify the best alternatives in complex decisions under limited resources that meet targets. Optimization models can explore alternatives, understand trade offs, and respond to changes in operations. One third of Global 500 have built custom applications using ILOG optimization tools. Examples: – Finding optimal transportation routes. – Scheduling Airline, Bus, Train, and Hospital Crews. – Optimizing a Financial Portfolio. “Analytics and the 21st Century MBA” Symposium
- 9. © 2011 IBM Corporation IBM Client Insights 9 Validate the proposed mix with the brands and geos. Build an ILOG mathematical model to select the high-ROI event mix. Mine data sources to build performance profiles of event classes. Collect/refine requirements (drivers, revenue goals, operational constraints). With this project we introduce an analytics methodology that enhances Event Planning - on top of the immediate ROI benefits Analytics Optimization Methodology Enhances decision-making by using analytically-robustified historical data. Facilitates business integration in planning. Jointly optimizes geographies and brands, under the same KPIs Aligns to Finance directives, to direct growth to future opportunities. Produces multiple scenarios, to illustrate impacts of choices and trade-offs. Methodology Benefits “Analytics and the 21st Century MBA” Symposium
- 10. © 2011 IBM Corporation IBM Client Insights 10 Example: Scenario analysis helps planners understand trade-offs 1. Without optimization (red), we meet the revenue goal with a proportionate scale-up of current spend. 2. Keeping spend at current levels and optimizing the event mix (blue), increases the revenue markedly, however it misses the goal. 3. The optimized-mix option (green) meets the goal with a modest increase in spending. Spend Revenue Optimized for midterm growth goals Optimized for current spend Unoptimized for midterm growth goals Current “Analytics and the 21st Century MBA” Symposium