Customer Segmentation Archives - Page 2 of 4

Three reasons why wealth & asset managers need young investors

Posted on: 14 April 2023

While wealth and asset managers may have developed a sophisticated and loyal base of investors, it is no secret that their client base is ageing and shifting. There have been noticeable changes in both the types of customers and their behaviours, whereby moving away from traditional investment styles and seeking out alternative areas of wealth to gain market share have become commonplace.

So, why would wealth and asset management firms benefit from having younger investors in their client base?

Their trajectory to wealth has high earning potential for wealth management businesses

Reaching the broader and untapped market of high-earning young investors has become critical for wealth and asset managers to continue to be successful. Supporting potential investors who are en route to wealth inheritance, who may find themselves in a position to sell off a thriving business in the near or distant future, or whose career path suggests high earning potential, are all inviting factors to drive wealth and asset management firms to acquire younger clients.

According to the Financial Conduct Authority (FCA), a High Net Worth Individual (HNWI) is someone who either earns more than £300,000 per annum or has net assets of more than £3,000,000. Firms with a client base that is more likely to pass down their wealth generationally are left to wonder the amount that might one day be re-invested into the firm, while young investors are more likely to distribute their wealth differently as a result of their current life stage and emerging alternatives, such as Crypto currencies. While the average new and younger potential investor may, for example, only bring ~£100k in assets to the table, potential exists for this investor to be on the trajectory towards becoming a high-net-worth individual.

Their financial industry knowledge is superior

Young investors building or inheriting their own wealth are often more knowledgeable (and environmentally conscious) about their financial options than previous generations.

With 80% of 18-24-year-olds having reportedly invested in ESG (Environmental, Social and Governance) stocks according to the Saltus Wealth Index 2022, their expectations on the importance of sustainable or green investments may likely differ, and they may be inclined to ensure that ESG factors such as how the businesses they invest in respond to climate change, water management, health and safety policies are likely to be considered. These investors may also be more likely to consider whether investments meet global standards for sustainability reporting (GRI) in transparency and accountability.

They are not afraid to take their services digital

The investor arena has increasingly filled with entry-level investors who have lofty expectations for customer service, especially with digital services. They are aware of the capabilities of self-sufficient online investing; therefore, they expect the same level of speed and ease of use in all their financial affairs.

How can wealth management businesses identify and secure young investors?

Without a comprehensive understanding of the behaviours and traits of potential younger investors, firms may struggle to target the right investors through their own initiatives, or target young investors at scale through digital channels. CACI is equipped with robust data that can provide valuable insight into potential investors at scale across the UK, garnering information on who the potential clients are, what they like, and what they do. CACI can also track existing clients’ signals and triggers to model with future investors in mind.

Throughout this blog series for the wealth management industry, we break down the opportunities for businesses to attract and retain high-net-worth individuals. Continue reading at the links below:

Blog 1 – Four barriers wealth managers face when attracting & retaining customers

Blog 2 – How to identify, attract & retain high net worth individuals

Blog 4 – How CACI supports the wealth management customer journey

Whitepaper – Acquiring new high net worth clients – What wealth managers need to know

Is your firm looking to attract younger investors? Get in touch with us by clicking the link below to find out how you can achieve this.

How to identify, attract & retain high net worth individuals

Posted on: 23 March 2023

The distinction between attracting and retaining high-net-worth individuals (HNWI) within the existing investment landscape can feel like a blurred line for many wealth and asset management firms.

With new rules released by the Financial Conduct Authority (FCA) in 2022, which demanded increased consumer protection for financial services consumers, it is now more important than ever for firms to leverage data to improve customer experiences and outcomes.

As a result, firms may now be experiencing the impact of lacking the necessary customer-centric data to effectively and compliantly deliver positive experiences and outcomes. Understanding the steps that must be taken to ensure that wealth management firms are digitally safeguarded, while adopting customer-first practices and identifying the HNWI they would like to attract, will be critical.

How do wealth & asset management businesses know who to attract?

It is through enhancing customer data that is backed by demographic, lifestage, lifestyle and attitudinal insight that will enable wealth & asset management firms to better understand, reach, and serve customers. Without having the right data available, they will risk lacking an integral understanding of who to attract.

Wealth products were historically sold by independent advisors who knew the local area and could identify the ultra-wealthy with ease, including where they were likely to be, often by word-of-mouth. This is no longer the business model for many wealth management firms looking to identify potential business at scale and deliver direct sales to new investors who expect a different type of engagement.

What major challenges do wealth & asset management businesses face in attracting & retaining high net worth individuals?

Competition for investment

The everchanging investment landscape has caused wealth and asset management firms to re-evaluate existing investor experience approaches. To keep up with the changes in client demands, firms that lack integrated insight and digital engagement capabilities will find themselves at a disadvantage against competitors, and unable to provide the tailored experiences investors now expect.

Cost of living

With no definitive end in sight for the cost of living crisis, there is increased interest in targeting affluent individuals from across sectors, many of which are mature in their data and digital capabilities. Wealth Management firms will experience increased competition and pressure for those available assets. Firms are tasked with reassessing their customers’ journey end-to-end to determine how to effectively safeguard against these unpredictable times.

What techniques should wealth & asset management businesses use to retain investors?

Effectively identifying and catering for the right customers

No two customers are the same, and firms that may have opted for a traditional approach that meets the needs of all customers will quickly realise that personalised and customised experiences for each unique customer is the best way forward. It is integral for firms to understand what their clients want and where they are seeking out financial products that meet their unique needs, to help them access the right products. This approach will allow customers to gain the most use of their tailored solution and will encourage them to remain with the firm for future support in their financial endeavours.

Utilising consolidated data to retain customers

Firms that effectively utilise consolidated data will notice long-term growth and can leverage this to outcompete their competition. Firms have client data, but without an understanding of how to enrich it, decipher it and make use of it to improve their customers’ experiences, they will not determine how to retain customers effectively. Customising solutions for clients that are built on demographic, attitudinal and behavioural insight will be paramount for this.

Acting upon customers’ short and long-term needs

Firms need to better understand the current and future needs of investors to appeal to a wider investor audience. Those that acknowledge the need for enhanced client understanding can introduce insight into their business that will drive improved customer-first experiences and outcomes.

How can CACI help?

Consumer Duty is an authoritative intention that will guarantee trust between financial institutions and consumers. Firms must innately understand their customers to adapt their products and drive messaging that effectively engages them and improves results, whilst also ensuring compliance with the directive.

CACI is uniquely positioned to support businesses through agency, consultancy, data provider and system integration capabilities, all of which work in conjunction to drive value for your business. Our services and data products work in conjunction with our strategies and values to continue to connect firms with their customers.

Blog 1 – Four barriers wealth managers face when attracting & retaining customers

Blog 3 – Three reasons why wealth & asset managers need young investors

Blog 4 – How CACI supports the wealth management customer journey

Whitepaper – Acquiring new high net worth clients – What wealth managers need to know

To find out more about how CACI can support you, contact our team of data experts today.

Understanding whether a loyalty programme is right for you

Posted on: 14 March 2023

How do you decide when to create a loyalty programme?

All businesses will eventually face the existential question of whether they should implement a loyalty programme or not. Understanding the value in doing so is paramount— customer loyalty is a big question for a lot of brands, and few know where to begin to devise a promising loyalty scheme, with many brands lacking an understanding of the potential return on investment. It is also integral for brands to have a business case prepared prior to formulating the loyalty programme’s design, as this knowledge will sway the development entirely.

Why brands might be thinking of this now

There are several factors that may prompt the creation of a loyalty programme– increasing share of wallet, encouraging customers to buy directly from a brand versus through a third-party retailer, or enhancing direct customer relationships to drive repeat purchase behaviours. No matter what the driving forces, businesses have become increasingly aware of the impact that customer insight has on informing an effective loyalty programme and the potential cost and risk of not introducing one into your own business.

What risks are associated with creating a loyalty programme?

Improperly planned and executed loyalty programmes can result in hefty costs for businesses, plummeting bottom line profit figures and an inability for revenues to bounce back.

Additional elements you must consider when implementing a loyalty programme include:

Getting the value exchange right

If customers do not understand the point or see the value behind your business’ programme, it will not be successful. Getting the value exchange wrong can erode your brand’s impression on customers. If the programme appears worthless as opposed to rewarding, it will fail to increase customers’ sentiment or engagement with your brand.

Getting the level of innovation right

Loyalty programmes must be innovative and uniquely tailored to a diverse customer base. Your business must meet customers’ expectations in one cohesive programme versus through multiple solutions, which demonstrates the importance of value exchange– meeting the wants of customers without sacrificing your business’ value.

Getting the loyalty mechanic right

You must be mindful of what customers are looking for from a loyalty programme, but this understanding must be backed by a data-driven approach that allows you to understand the unique selling point for your customers. There are a few approaches you can take:

Tiered loyalty programme: This splits benefits into tiers or levels that customers spending certain amounts of money can achieve. The higher the tier a customer reaches, the greater the benefits will be.
Points-based loyalty programme: Customers are given points with every purchase they make, and when they reach a certain number of points, the points can be used towards a discount or reward.
Subscription-based loyalty programme: Customers that sign up for subscription-based loyalty programmes will pay for their subscription upfront or in monthly or yearly instalments to receive exclusive discounts or rewards.

A lack of access to customer-centric data and an understanding of your customers’ wishes, however, will hinder a loyalty programme’s capabilities.

What should you consider before creating a loyalty programme?

Is your business bought in, engaged and set up to support a loyalty programme? Do you have the right technology and CRM in place, an existing loyal customer base and the ability to continue to sign up new customers?
Is a loyalty programme worthwhile for your customers and for you? Have you listened to your customers’ value mindset in terms of the product or offering to conclude the best potential ROI from your loyalty programme?
Is your business clear on how to enter the market in a way that will demonstrate ROI? Does it have the necessary mechanics or programme in place to pilot in the market to provide a successful ROI? Are you aware of the potential opportunity it can bring?

If you can answer these three questions, you can conclude whether now is the time to create a loyalty programme.

What steps should your business take to implement a successful loyalty programme?

Ensure your business is equipped with the necessary data to determine a loyalty programme’s value and discern what a good outcome for your business would be. This can be done through data analysis, best practices and benchmarking that will help you effectively align internally to understand existing capabilities and how best to proceed.
Confirm that your customers want a loyalty programme. If they do, what does a valuable loyalty programme look like for them, and what is the opportunity for your business? Identifying the value to the customer as well as to your business through data enrichment and data science will be a key next step.
Determine the ROI that your loyalty programme can deliver and understand what type of mechanic should be used in the pilot market to achieve this. An assessment of the scenarios of mechanics should be carried out to determine this. Once the opportunity from a viable mechanic is understood, determining how to effectively enter that market in a way that will deliver ROI will be crucial.

How can CACI support you with implementing a loyalty programme?

CACI’s data science capabilities and Customer Engagement consulting team can determine the actual costs that your business will face in running a successful loyalty programme and support your business through an innate understanding of loyalty across enterprises.

We do this by using our own proprietary data, data science, and expertise to understand the headroom in the market and help determine KPIs, understand which of your customers want a loyalty programme and how they want it to look to inform what potential opportunity exists. Areas that we assess to inform this include demographic richness, compliance for use, permissions, and our own products to fill any gaps around customer segmentation to determine who customers are and ask the right questions.

Our teams of data scientists and consultants will scenario plan with your business to comprehend the mechanics and experiences that must served and managed to your customer groups to build the pilot. Once this business case is understood, and a feasible pilot market has been identified, we can design a sophisticated end-to-end offering to help you deploy a successful loyalty programme.

Could your business benefit from a loyalty programme? To learn more about how CACI can help you, contact us here.

Four barriers wealth managers face when attracting & retaining customers

Posted on: 10 March 2023

Navigating everchanging expectations from customers, as well as new rules from the Financial Conduct Authority (FCA) to ensure that increased consumer protection is in place, has led wealth managers to not only find new ways to better understand their existing clients, but innovate ways to identify and attract new high net worth individuals (HNWI). This has caused many wealth management firms to scramble to increase their digitisation and customer-first policies quickly and effectively.

The ability to define these HNWI and UHNWI can be cumbersome, especially when the HMRC, FCA and individual banks and wealth managers all use varying criteria to measure this. Wealth and asset management firms looking to grow their business through the acquisition of these individuals will have to consider the importance of overarching data and scalable transformation to do so.

While you may recognise the need to better understand your clients, legacy practices and technology can often hold you back. Currently, we have noticed four major barriers in attracting and retaining customers:

1. Sparse investor data to inform decision making

Building a high-net-worth portfolio of investors requires the right financial products. Financial and consumer data products that identify people with incomes above £100k are far and few. This makes differentiating between an investor earning £100k and an individual with a £500k annual salary complicated, and identifying and targeting high-net-worth groups a challenge.

You cannot rely on your clients’ intergenerational wealth either as, once it is passed down, it is often the case that inherited wealth will be spent or not reinvested. However, if it is reinvested, it is often done with other brands, as different investor groups have different needs. This can leave you questioning how much wealth will actually remain with your client.

2. Lack of understanding of current and future investors’ needs

Once you acquire a new HNWI investor, utilising your cross-sell and upsell capabilities to extract the most benefit from their available wealth will be crucial. The ability to understand your clients is paramount, including both present and future needs in order to establish a long-term relationship.

Consumer Duty has been introduced to make firms more accountable over the suitability of their products and services, to meet the needs of those they are sold to. You will need to review the entire investor lifecycle and journey, revisit how and what to include in your marketing strategies, and establish new ways to measure all these areas to remain compliant and trusted.

Outreach to younger target investors

Younger investors are not as likely to behave as their older counterparts. For example, they may not necessarily attend the same in-person industry events, and often need to be targeted and communicated with via digital channels or social media. They will also want to manage their assets via digital platforms to be more self-serving. This means you need to work harder to intrigue and engage with younger investor audiences.

3. Maintaining GDPR (General Data Protection Regulation) compliance

By attempting to reach your target investors via additional or new channels, you must consider data protection and GDPR. Substantial penalties can come with breaches; therefore, you must ensure that any data handling is done carefully and correctly. Plus, you need to provide clarity to your audience as to where you have sourced their data from and why you are legitimately contacting them.

4. Delayed response towards technology-first approaches

The last five to 10 years have seen a significant move towards digital transformation and customer-first policies, particularly with banks and building societies. While this ongoing transformation has been relatively steady for some sectors, the wealth and asset management sector has struggled to adapt.

To appeal to investors, brands must now adopt and embrace digital practices by implementing business models that will facilitate customer-led and technology-first transformation.

How can CACI help?

CACI is already a trusted partner to leading wealth and asset management firms, supporting investor acquisition and retention through predictive analytics and data solutions.

Throughout this blog series for the wealth management industry, we break down the opportunities for businesses to attract and retain high-net-worth individuals. Continue reading at the links below:

Blog 2 – How to identify, attract & retain high net worth individuals

Blog 3 – Three reasons why wealth & asset managers need young investors

Blog 4 – How CACI supports the wealth management customer journey

Whitepaper – Acquiring new high net worth clients – What wealth managers need to know

Or to learn more about how CACI can help your firm overcome barriers in this area, explore our services or get in touch.

Using machine learning techniques to increase revenue, conversions and engagement for DFS

Posted on: 20 February 2023

About DFS

DFS, the UK’s largest sofa retailer and manufacturer, aims to lead furniture retailing in the digital age. Most famous for sofas, DFS also partners with leading lifestyle brands, such as Dwell, French Connection and Joules, to provide a wider range of furniture products.

CACI has worked with DFS for over 20 years and hosts its customer database, providing insight from CACI’s proprietary datasets to support customer understanding and location strategy. Outputs include segmentation, machine learning models, communications strategy, store catchments and digital targeting algorithms.

The challenge: targeting relevant engagement between major purchases

DFS sells to a market where customers traditionally make infrequent, high value purchases, as Mike Aspinall, Data Activation Manager at DFS, explains: “The main thing we sell is sofas, with a repeat purchase average of seven years. This can be challenging for CRM, which is all about nurturing ongoing relationships.

Our challenge was to deliver a CRM strategy that would enable us to maintain relevant engagement in a targeted way. We wanted to understand the opportunity to encourage repeat purchase through a data lens – which customers might be open to further purchases, when they might be likely to make them, and what kind of products they might want.

The solution: an actionable scoring algorithm that updates continually

Mike asked CACI to work with a large sample of DFS’ previous purchase data. “We have a rich customer database. CACI analysed two years’ data to find people who had bought two items from us consecutively within that period, looking at their purchase patterns and pathways.

CACI mapped out the attributes of people who had made the two qualifying purchases using Ocean demographic and lifestyle data blended with DFS behavioural data. The analysis looked at the identified customers’ over and under-indexing attributes, comparing them to people who bought the first item but not the second.

CACI trained a machine learning algorithm which is updated daily, incorporating the latest transaction and customer information. It is applied to the data in DFS’ customer experience platform (CEP), appending data points to customer profiles.

The benefits: conversion and revenue uplifts through highly relevant, low-waste, accurately targeted multi-channel campaigns

Mike tells us, “we had fairly low expectations of the first email in a multi-month journey. But against the control group, we saw an 866% uplift in revenue from the email campaign alone, within 14 days. That’s a four-times conversion increase, measured against a control group of people in the same segment who didn’t receive the communication.

This project was a perfect fit for CACI as an expert data science partner. With our DFS mission to lead furniture retailing in the digital age, machine learning is crucial to engaging our customers with truly relevant, timely communications. We have been working with CACI for decades – their team understands our business and data extremely well and we have a strong relationship.

Read the full case study here. For more information on how CACI can support you in delivering targeted, relevant, customer experiences get in touch and one of our data experts will happily arrange a time to talk.

The growth of online: a surprising pivot in 2023

Posted on: 13 February 2023

Over the last three years, we have seen a more significant shift in consumer habits than we could have imagined. Currently challenged by the rising cost of living and an economy in recession, the post-pandemic spending bubble was cut much shorter than initially anticipated by economists.

Like everyone in January, CACI reflected on the last few years, and as part of this, we revisited predictions that we made during the height of the Covid-19 pandemic. Consumer behaviour changed significantly in the space of several days, triggered by widespread temporary store closures during the lockdowns. Some stores were never able to reopen; whilst online platforms boomed, in light of these significant behavioural shifts, CACI rebuilt predictions to reflect this new normal.

How close were CACI’s consumer online spending predictions to actual results?

Mirroring our spend predictions, a phrase we maintained at CACI at the time was that “online spend jumped forwards five years in one month”. What we have come to realise was that three years on, these spend predictions, shown in the below chart, highlighting a return to in-store, were very close to the true picture.

How can CACI track consumer online spend behaviour?

CACI can unpick these new trends in spend behaviour using our new and exciting tool kit of Spend Dimensions and Brand Dimensions, which tracks over 200 shopping centres and 300 brands across the UK.

What we can see demonstrated in the above chart is a post-pandemic slump in online spend as a proportion of total spend. In 2023, online spend falls to 38%, before gradually rising again in the preceding years.

Whilst the current split in online and offline engagement provides us with an overall national average, it is important not to expect all shoppers to follow suit. We have seen asset type, product category, brand, region and demographics all play a big part in the extent to which a shopper might engage online.

Who is most likely to shop online?

Demographically, the split between those engaging in-store and online has become less distinct, highlighting the closing of the digital gap between young and old, with the difference between online market share across all groups dropping from 10% to 5% over the last year.

However, the big picture doesn’t change. Key online shoppers continue to be younger shoppers across the affluence spectrum as well as more affluent shoppers, likely driven by greater access to e-commerce platforms and the ability to afford delivery costs.

How does this vary by product category?

The recent shift back towards in-store engagement isn’t clear-cut and does vary by product category. CACI expectations were that the drivers of the overall return to the store would be clothing and footwear, household and health & wellness brands. This has been the general spend trend that we’ve been seeing across the UK since 2020.

The variation by category gets further exacerbated by the time of year. For example, comparing the months of October to December 2021 and 2022 in the chart below, there was a clear shift for household and kids’ goods spend to in-store, likely driven by the desire to experience before purchasing. Whereas, General Retail painted an interesting picture within the final quarter of 2022. Both in 2020 and 2021, with Black Friday and Cyber Monday taking place in November, Christmas hit online earlier than in-store, boosting online’s share of the market temporarily. In December, our Christmas survey reiterated this sentiment, with over half of those shopping online citing a main drive of this being concern with the rising cost of living and saving money, whereas over half of those shopping in-store did so for the experience. The experience-focused, in-store shoppers drove the resurgence year-on-year of in-store spend in December.

What does the return to in-store mean for retailers?

Across the 300 brands we tracked, many pure online brands are experiencing a decline in market share, in-store brands have typically performed well, and those blended brands have seen a shift towards a greater in-store market share. The power of the store can be seen through brands such as Decathlon, Nespresso, Build-A-Bear and Denby, who have all shifted to greater reliance on the store over the last quarter. In comparison, online disrupter brands such as Vinted and Shein which thrived through the year began to see a drop off.

What does the future of consumer online spending behaviours look like?

Whilst 2022 did represent a return to bricks and mortar, we are still at least a year ahead of where we would have been if the pandemic hadn’t happened. We expect to see continued growth in both on and offline retail spend, although proportionally online spend will increase.

However, it is undoubtedly true that we are currently, and will continue to, experience unexpected macroeconomic challenges which will impact different brands and destinations in different ways. Brands can no longer rely on their name as we have seen with the casualties of too many well-known landlords and retailers. Therefore, making informed decisions through the use of CACI data will help retain a competitive advantage and stand out from the market.

To learn more about how CACI can help your brand navigate changing consumer spending habits, get in touch with us here.

Elevating Customer Experience with High-Quality Data: The Power of DataHub

Posted on: 7 February 2023

“Garbage In, Garbage Out” (GIGO) is a well-known adage that holds true across various industries, including sports nutrition, education, wine making, data science, and, most notably, customer experience.

Poor-quality data can undermine confidence in reports and impede the implementation of personalisation and other data-driven initiatives.

At CACI, we are dedicated to harnessing the power of data to deliver remarkable results.

High-quality customer data is critical to this mission. Data that is accurate, consistent, and free from duplicates will enable us to optimise customer loyalty, personalisation, AI/ML, conversion optimization, and regulatory compliance.

To ensure that our data is of the highest quality, we adhere to the following criteria:

Demographically rich: The data provides insights into the customer’s identity and lifestyle.
Standardized: The data is consistent across systems, allowing for quick and efficient processing.
Veracity: The data adheres to your standards for validity and consistency.
Free of duplicates: The data is resolved at the individual level to avoid double counting and over-communication.
Consistent identifier: The customer is identified consistently, regardless of the source.
Predictive: The data contains variables that enable modelling and prediction of customer interests and needs.
Compliant: The data adheres to relevant consent and permissions standards.
Understood within the organization: The data is accessible and understandable to stakeholders.

To address these challenges, CACI has developed DataHub, a solution that solves data quality issues faced by brands. DataHub was built on the experience of working with leading brands in retail, publishing, financial services, gaming, and utilities.

It processes and enriches data in real-time using a scale on demand cloud native architecture, engineered to work with your data, wherever it is stored. For CACI clients already using Acorn, Ocean, and Fresco, DataHub provides dynamic, real-time enrichment of data, enabling real-time personalization and optimization of the digital or call center experience.

To learn more about DataHub and its flexible integration options for all use cases and enterprise architecture needs, download our short brochure or reach out to us for more information.

Let’s work towards a future where data quality is no longer a concern.

A Customer Personalisation Platform to deliver change for financial services brands

Posted on: 3 January 2023

Change within the financial services sector is complex. There are multiple stakeholders, regulatory needs, and often a base of legacy data and technology to unpick.

From our work with major brands, we know that the change is achievable and worthwhile. Investing in customer centricity will pay dividends in the long-term by reducing competitive threats, winning new customers, and ensuring retention of base customers.

To succeed in an increasingly competitive market, financial services brands need to establish change that encompasses:

A coherent data-driven strategy – where customer data is of a high quality and securely democratised to enable meaningful messaging to the individual
Establishing the right business targets and success measures – moving from short-term outcomes to long-term value for the customer and the organisation
A focus on your customers and the market context – understanding the needs and behaviours of both customers and prospects to better engage them
Maximising data and tech ROI – having the right tools to deliver the outcomes the business needs and then sweating the technology assets to deliver long-term ROI
Measure and optimise what matters – ensuring accurate reporting is fed through the business and that teams are empowered to act on those insights to optimise performance

Our challenge to leaders within financial services is to create a vision and become an agent of change. We want to work with brands who care about their customers and are making changes to show it. Therefore, our catalogue of services is developed to do amazing things with data and connect your brand with the individual.

At CACI, we can improve marketing ROI through detailed attribution modelling. Our customer demographics and bespoke segmentations provide a more accurate profile of customer needs, market size, and even financial vulnerability. Technical decisions around investment in AI, decisioning or identity resolution are made by defining clear use cases for technology and designing future technical architectures.

This work led to CACI developing a framework for customer personalisation at scale. Working with leading vendors Tealium, Braze and Snowflake, we created a technology blueprint that can achieve full integration between enterprise data and the omnichannel experience.

To find out more about the CACI Customer Personalisation Platform or to discuss issues related to customer transformation, please get in touch.

You may also be interested in downloading this report which uncovers a surprising disconnect between what banks think and how customers feel about the customer experience, with statistics and insight gathered from 1,500 marketing leaders and 5,000 consumers.

You can also check out the previous parts of this blog series below:

Blog 1 – How the banking and financial services sector can lean into a changing market

Blog 2 – Creating human banking experiences through data-led marketing

Blog 3 – Three ways to stand out in a crowded insurance market

Blog 4 – Combining data and technology to deliver effective customer journeys in the financial services industry

Marketing Measurement – a quick guide to getting it right!

Posted on: 14 November 2022

We’ve all heard the well-worn clichés about the difficulty of measuring marketing effectiveness. As tired as they are, there are valid reasons for their persistence – determining what works, why, and who for can be complex. But does it have to be?

We still find that most organisations are relying on a ‘last click’ attribution approach to Digital & CRM measurement, and with good reason – most ‘off the shelf’ software platforms default to it, it is relatively easy to establish, and it can provide results, where previously there weren’t any! That said, it’s widely accepted that this lacks sophistication and accuracy, resulting in ‘best guess’ outputs that will over or understate the true impact of channel contribution.

So, how can you more accurately track the performance of your marketing, leaving you with actionable insights that can drive improved ROI?

Our tips for enhancing your marketing measurement

Moving to multi-touch attribution, considering all digital and direct channels, is typically the first step we recommend and is an area where we have had significant impact with clients. Having evaluated multiple approaches, we currently favour Markov Chain modelling, which calculates probabilities between successive channel interactions. This attributes impact to each channel, whilst also accounting for the sequencing of contacts between different channels.

Another approach we often recommend is to use Shapley Values to work out the ‘co-operation’ that can take place between channels. This can help us to calculate transition probabilities (to determine the paths taken between channels) and the impact of channels in combinations.

Once this level of capability and insight is established, we recommend that Channel Incrementality is established to further evidence the isolated contribution of each channel. This is achieved through a controlled testing approach, with channels stopped completely for short periods. We can advise on lean approaches here to minimise the time that channels are out of action.

In addition to the Attribution approach, we also find great value in also considering the impact of ATL channels and wider econometric factors. We have seen influences such as competitor activity, economic factors (such as cost of living & employment data), weather and global events (Covid & Brexit) all have a significant and measurable impact on sales. The key is to identify data that has significant variability (e.g., things that change regularly over time as anything too static can be all but impossible to infer impact from). Our recommended approach is to combine the Media Mix Modelling with Multi Touch Attribution to provide a true 360-degree view of performance.

This MMM approach is used to infer not only the size of the effect of each channel on sales, but also, where data permits, to determine the time decay of each channel – this defines the delay between any marketing channel activity, and its knock-on effect on sales.  This may often differ significantly between channels. For these we typically apply bespoke Bayesian models which incorporate business knowledge to inform probabilities for any unknown parameters.

An additional approach we have seen add significant value is to consider ‘Segmented Attribution’ – moving from a channel or ‘overall marketing’ level focus, to a view of performance at the consumer segment level. This allows us to determine not only how effective a channel is, but also who it is effective for. This enables organisations to target the channel activity at the segments that will return the optimum engagement.

Finally, once all of this capability is established, we recommend that you not only use this to explain what has happened in the past, but also to create performance forecasts for future activity. Ongoing tracking and optimisation can keep this accurate as the business evolves, so that attribution becomes a key asset informing ongoing marketing decision-making and investment planning.

It’s still a complex and evolving discipline, but we’re helping organisations of all shapes and sizes, across all sectors, to understand what is working (or isn’t) and why, and to make better decisions as a result. If you’d like an informal chat about how we can help you, get in touch & one of our data science experts will be in touch to discuss your specific needs.

Fair4All Finance helping make financial services fairer for everyone

Posted on: 4 November 2022

About Fair4All Finance

Fair4All Finance is a not-for-profit organisation driving change in financial services to help millions of people in vulnerable circumstances. It works with organisations to increase access to fair and affordable financial products and services across the UK.

Highlights

Developed a bespoke segmentation to better understand and help the millions of people in financially vulnerable circumstances in the UK
New segmentation helped to collaborate and deliver more applicable financial products and services to those usually excluded
Consolidation and blending of data from multiple sources to provide a detailed view on financial situation across the UK

The Challenge: understanding of the financially vulnerable population and their financial needs

Depending on the definition across the industry, up to 21 million people in the UK are thought to be in vulnerable financial circumstances. To fulfil their remit, Fair4All Finance aims to better understand this broad group of people and their different needs.

Most off-the shelf segmentations pull apart the population based on age and affluence. By segmenting this group along more behavioural lines, Fair4All Finance aims to develop strategies and work with the industry to make financial services more applicable and accessible to the financially vulnerable population.

Huge parts of the financial system don’t work for large portions of society. Products and services are designed around people with predictable lives and predictable incomes. There’s a huge chunk of the population that doesn’t work for

– Lauren Peel, Head of Markets, Consumer Insights and Product Design, Fair4All Finance

The Solution: a distinct segmentation that defines consumer groups and their needs

Fair4All Finance partnered with CACI and Trajectory, a research agency, to develop a segmentation solution tailored specifically to Fair4All Finance’s objectives, through consolidating and blending data from multiple sources. The solution made use of Fresco and Ocean to build a segmentation at a UK-wide level.

In order to identify key segments within the financially vulnerable population, a number of statistical methods, including correlation and principal component analyses, were applied to identify core features of importance. These driving variables showed discrimination and relevance across the financially vulnerable population.

The results: creating assets and personas based on the data

Six new segments of financial vulnerability were created using the data and then sized across the UK population to understand the spread of segments across geographies. The iterative process taken to develop the segments, ensured the final solution could be constantly adapted to make sure it was meeting Fair4All Finance’s end goals and aligning with its objectives.

A knowledge sheet was also created, which profiled each segment across more than 900 demographic, lifestyle and attitudinal variables from CACI data and specific behavioural characteristics from the research data, giving detailed insights into the key characteristics of each segment compared to the financially vulnerable population as a whole.

This allows the segmentation to be truly actionable as any organisation using it can delve into the detail and understandings that will help inform business decisions or product development

– Lauren Peel, Head of Markets, Consumer Insights and Product Design, Fair4All Finance

The Benefits: enabling internal and external insights

The findings will enable Fair4All Finance to share insights in three different ways, with credit unions and community finance providers, mainstreams banks and internally.

It will help us be more effective in the work that we do. With a better understanding of who the customers are and what the customers’ needs are, we’ll be able to better tailor and prioritise activity that needs to happen

– Lauren Peel, Head of Markets, Consumer Insights and Product Design, Fair4All Finance

Continue reading the full case study

To view the full customer story click here.

To find out more about how we can help your organisation do amazing things with data, please get in touch.