Payment Behavior Analysis and Prediction Project at a Telco ...
Payment Behavior Analysis and Prediction Project at a Telco ... Payment Behavior Analysis and Prediction Project at a Telco ...
Copyright © 2002, SAS Institute Inc. All rights reserved.Payment Behavior Analysis andPrediction Project at a Telco CompanyÖzge Neslihan ÇaycıSAS Turkey
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Copyright © 2002, SAS Institute Inc. All rights reserved.<strong>Payment</strong> <strong>Behavior</strong> <strong>Analysis</strong> <strong>and</strong><strong>Prediction</strong> <strong>Project</strong> <strong>at</strong> a <strong>Telco</strong> CompanyÖzge Neslihan ÇaycıSAS Turkey
Copyright © 2002, SAS Institute Inc. All rights reserved.Agenda! <strong>Project</strong> Background! About the company! Previous Marketing Department CRM project! Finance Department <strong>Payment</strong> <strong>Behavior</strong> <strong>Analysis</strong> <strong>Project</strong>! Business Needs! Business Answers! Business Benefits! <strong>Project</strong> Architecture <strong>and</strong> Modelling techniques! Questions
Copyright © 2002, SAS Institute Inc. All rights reserved.About the company! The leading Mobile Oper<strong>at</strong>or in Turkey! About 10 million subscribers
Copyright © 2002, SAS Institute Inc. All rights reserved.Marketing DepartmentCRM initi<strong>at</strong>ed project
Copyright © 2002, SAS Institute Inc. All rights reserved.Business needs (Marketing)! Customer Underst<strong>and</strong>ingDiscover who the customers are to gain a global marketknowledge! Segment<strong>at</strong>ion <strong>and</strong> ProfilingSepar<strong>at</strong>e the customers into homogeneous groups accordingto the call behavior <strong>and</strong> service usage! Churn <strong>Prediction</strong>Predict which customers will churn <strong>and</strong> determine the causes
Copyright © 2002, SAS Institute Inc. All rights reserved.Business Answers (Marketing)! Customer Underst<strong>and</strong>ing! Identific<strong>at</strong>ion of major pains (fraud, suspension)! Initi<strong>at</strong>ed a new project on the payment behavior! Segment<strong>at</strong>ion <strong>and</strong> Profiling study! Know their customers call behavior better! Started a new tariff which has received the most responseever! Churn <strong>Prediction</strong>! Churners are not the most valuable customers! Able to run models for different targets
Copyright © 2002, SAS Institute Inc. All rights reserved.Agenda! <strong>Project</strong> Background! About the company! Previous Marketing Department CRM project! Finance Department <strong>Payment</strong> <strong>Behavior</strong> <strong>Analysis</strong> <strong>Project</strong>! Business Needs! Business Answers! Business Benefits! <strong>Project</strong> Architecture <strong>and</strong> Modelling techniques! Questions
Copyright © 2002, SAS Institute Inc. All rights reserved.Business NeedsScore the customers for their payment riskApply different collection actionsIncrease the r<strong>at</strong>e of payment
Copyright © 2002, SAS Institute Inc. All rights reserved.<strong>Project</strong> ScopeCustomer Underst<strong>and</strong>ingReaction to the current collection actions, realiz<strong>at</strong>ion ofdifferent payment behaviorsSegment<strong>at</strong>ion <strong>and</strong> ProfilingSepar<strong>at</strong>e the customers into homogeneous groupsaccording to their payment behaviors for applying propercollection action setsNon-payment <strong>Prediction</strong>Predict which customers will pay l<strong>at</strong>e <strong>and</strong> whichcustomers will become suspended due tononpayment
Copyright © 2002, SAS Institute Inc. All rights reserved.Collection Process! <strong>Payment</strong> on due is very important for• the cash flow planning• for the reduced risk!
Copyright © 2002, SAS Institute Inc. All rights reserved.Segment<strong>at</strong>ion <strong>and</strong> Profiling! After the study of the variables for segment<strong>at</strong>ion threevariables were selected:• past payment behavior• past payment amount• age of the contract! Finance department grouped the segments into two groupsas good <strong>and</strong> l<strong>at</strong>e payers <strong>and</strong> planned different collectionactions for these groups! The 7 segments are studied <strong>and</strong> grouped into 3 for the newcollection actions as• Strict, Moder<strong>at</strong>e, Tolerant
Copyright © 2002, SAS Institute Inc. All rights reserved.L<strong>at</strong>e <strong>Payment</strong> <strong>Prediction</strong>! Target Variables• Paying after the due d<strong>at</strong>e• Being Suspended due to non-payment! Model variables• past payment behavior• past invoice amountCan easily predict the l<strong>at</strong>e payers checking theprevious payment behavior
Copyright © 2002, SAS Institute Inc. All rights reserved.Business BenefitsWith the differenti<strong>at</strong>ion of the collection actions animprovement of 10% has been achieved first monthwith the success of the collections.The improvement has also significantly affected thesuccess of the collections in the coming months whichis sentenced as a gre<strong>at</strong> profit for the company.The predictive models for non-payment <strong>and</strong>suspension are going to be used by the marketingdepartment for the campaigns th<strong>at</strong> will be gener<strong>at</strong>ed.
Copyright © 2002, SAS Institute Inc. All rights reserved.<strong>Project</strong> Challenges! Limited time for the project deliveryThe oper<strong>at</strong>ional system for the differenti<strong>at</strong>ion of thecollection actions was in place <strong>and</strong> the financedepartment was waiting for the model results! Human capitalAcquire analytical competence inside the financedepartment! MethodologyGain knowledge on d<strong>at</strong>a warehousing <strong>and</strong> d<strong>at</strong>a mining! EnvironmentEconomic crisis caused sudden changes in thepayment behavior <strong>and</strong> the company objectives
Copyright © 2002, SAS Institute Inc. All rights reserved.<strong>Project</strong> Organiz<strong>at</strong>ion! SAS D<strong>at</strong>a Mining Methodology! <strong>Project</strong> Details! SAS team (200 man days)<strong>Project</strong> Manager Özge Çaycı (SAS Turkey)Business Specialist Guillaume Leor<strong>at</strong> (SAS France)Warehouse Architect Timothee Robert (SAS France)! Customer team (5 people involved, 200 man days)! Dur<strong>at</strong>ion (5 months)
Copyright © 2002, SAS Institute Inc. All rights reserved.<strong>Project</strong> ArchitectureD<strong>at</strong>a sourcesDecision oriented serverProductionD<strong>at</strong>abaseCustomerD<strong>at</strong>abaseReports on customer<strong>and</strong> analysisReportingExternal D<strong>at</strong>aSelectControlAgreg<strong>at</strong>eMergeTransformTranspose<strong>Payment</strong> <strong>Analysis</strong>DMD<strong>at</strong>a MiningD<strong>at</strong>aWarehouse serverEnterpriseD<strong>at</strong>aWarehouseD<strong>at</strong>a sources qualityimprovementD<strong>at</strong>a CheckingEMTLSTORAGEANALYTICS / VALUE ADDITIONS
Copyright © 2002, SAS Institute Inc. All rights reserved.D<strong>at</strong>a Mining Modelling Techniques! SAS Enterprise Miner!Segment<strong>at</strong>ion <strong>and</strong> Profiling!Variable Selection!Clustering!Predictive Modelling!Decision Trees!Regression!Assessment
Copyright © 2002, SAS Institute Inc. All rights reserved.Conclusion! Implementing seper<strong>at</strong>e segment<strong>at</strong>ion models for Finance<strong>and</strong> Marketing resulted with more accur<strong>at</strong>e <strong>and</strong> usefulcustomer groups! The marketing call behavior segments <strong>and</strong> the financepayment behavior segments are merged for a companysegment<strong>at</strong>ion th<strong>at</strong> will be used by the customer care <strong>and</strong>sales departments! The marketing <strong>and</strong> the sales departments merged with areorganiz<strong>at</strong>ion after the marketing segment<strong>at</strong>ion project <strong>and</strong>divided into three departments as a marketing team servingeach one of the three main customer groups! Marketing Department is working on new d<strong>at</strong>a miningprojects for identifying cross selling opportunities
Copyright © 2002, SAS Institute Inc. All rights reserved.Upcoming Initi<strong>at</strong>ives! Finance department is in need of a modellingsystem th<strong>at</strong> will serve their cash flow forecastingneed <strong>and</strong> SAS ETS is being evalu<strong>at</strong>ed! Fraud department is also evalu<strong>at</strong>ing EnterpriseMiner for the tuning <strong>and</strong> the assessment of theirFraud Management System parametersManagement has put a lot of belief <strong>and</strong> hope intothe d<strong>at</strong>a mining teams in the company...
Copyright © 2002, SAS Institute Inc. All rights reserved.Questions ???
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