The incremental impact

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Tapan and I had the chance to talk with Karen Washburn, Manager for the SAS Business Knowledge Series, a SAS Education Division program, who is joining us at Predictive Analytics World this week! Karen will be participating in the conference and seeking out new partners to join the Business Knowledge Series as instructors.

I hope you enjoy the conversation we had with Karen as we began our week at Predictive Analytics World and Data Driven Busines Week March 14-15 in San Francisco.

Karen shared a some insights about herself that are particularly relevant to retailers at the conference. She said "There are two things I know for sure about my shopping habits: First, I buy things I need. Second, I buy things I want. Okay, maybe there's a third: Would I wait for the coupon or not?

"What I haven’t given a lot of thought to until this past year, is what actually influences my buying practices," continued Karen. "Am I the type of person who goes to a specific store with a particular item in mind to buy, rather than wandering aimlessly among a variety of stores until something catches my fancy? Would I have bought a particular item from a specific store regardless of their having sent me an advertisement or discount coupon? Or, if I had something in mind, but received a different store’s advertisement or coupon, would I have gone there first, thus being influenced by their marketing?"

These are the same type of questions that companies ask about their consumers -- and they spend millions of dollars each year creating “response models” to predict who will purchase their products. In fact, Karen and Tapan agreed that SAS customers are using analytics to address these questions everyday: How can organizations focus their marketing money dollars to those customers that will react positively to their message (e.g. coupon, etc.)? Why spend marketing dollars on people who are going to buy anyway, will never buy, or could react negatively?

Tapan says Net Lift or Uplift modeling is of particular useful in situations where too many factors -- shopping venues, competition, messaging channels -- influence a customer’s behavior. These analytic models are used to predict the change in probability of a purchase, the probability of churn or attrition, a change in spending levels from a marketing action (such as a coupon in a mail), and many other behaviors.

By focusing marketing programs on people who can be persuaded to act, retailers realize greater campaign ROI, increased relevancy, improved retention, and reduced marketing costs, among other benefits.

So back to Karen's shopping habits: "Upon reflection, as a consumer, I don’t often examine my buying behavior… particularly if I am staying within my monthly budget. Companies in the business of selling goods and services, however, can’t afford to leave their marketing and analytics to chance and ‘hope’ they get it right."

At the upcoming Predictive Analytics World, attendees will have the opportunity to learn how to increase their ability to get it right by attending a workshop on Net Lift Modeling conducted by Kim Larsen, VP of Analytical Insights at Market Share Partners. The workshop is based on the highly successful SAS Business Knowledge Series course Kim developed “Net Lift Models: Optimizing the Impact of Your Marketing Efforts”.

Karen says workshop participants at Predictive Analytics World will have the opportunity to learn how to build incremental lift models that:

  • Optimize response rates (who will buy?)
  • Identify incremental lift predictive variables (who would have bought anyway?)
  • Build incremental lift models using a variety of techniques based on Generalized Naïve Bayes Classifiers (amazingly, when I looked this up, I actually understood what it meant, but don’t ask me to explain it).

Also, I would be remiss if I didn’t mention that Karen is attending the conference to keep her ears tuned in for emerging new topics in the field of analytics. "Our SAS Business Knowledge Series program, which offers a variety of courses developed and led by industry experts, is always on the lookout for new course development partnering opportunities," she says.

If you have expertise in a particular that you want to share through the SAS training program, stop by the SAS booth and leave Karen your business card or contact her at Karen.Washburn@sas.com. "In the meantime," says Karen, "I need to go do my part for the economy and do smart shopping."

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Kristine Vick

Principal Marketing Specialist

Kristine is an energetic, innovative, results focused marketing practitioner. She strives to share great analytical stories and successes. Kristine helps others see the big picture while taking care of details and thinking of creative ways to get more done!

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