The document summarizes a presentation about using customer data and predictive modeling to personalize customer interactions. It discusses how O2 improved its CRM program using tools that analyze customer data to determine the next best action or offer for each customer. This has improved conversion rates for promotions and allowed O2 to better target retention efforts. The key is using a centralized decisioning system called Vision to optimize inbound contacts and control retention spending based on customer value.

1. Event: DDMA iLounge Thema: DM 2.0 Spreker: Hugo Koopmans – Chordiant Datum: 26 september 2007, De Balie Amsterdam www.ddma.nl

2. Inbound marketing : van cost naar profit centre Hoe het ‘Next Best Action’ paradigma voor meer omzet,service en loyaliteit zorgt.

5. What is being transitioned

6. Foundation Blocks CRM Transformation Programme Data Mining Strategy Management (Decision Engine - Campaign Integration) Decision Engine (Operational Decisions) Customer Planning Capex Revenue (£ x k) + (£ x m) + (£ xx m) £0 +£ 5 m +£ 10 m +£ 100 m ? Phase 0 Phase 1 Phase 2 Full Rollout

7. An example campaign : Evaluation of Summer Roaming Promotion We think it is a great campaign!

9. Which customers are more likely to roam? If a customer tops up more then £8 per month, it increases probability to roam by 7% Customers with Nokia Handsets have higher probability to start roaming If a customer uses a credit card for top ups, and the higher the amount the more likely they are to roam. Online Customers have the highest probability to start roaming The more customers use their voicemail the more likely they are to start roaming Propensity Model

11. The Next Best Action paradigm

13. Trivial Next Best Action Strategy If there are no risks, what sales proposition should be made and in what way? MMS Propensity Broadband Eligibility Travel Services Propensity Broadband Propensity Travel Services Eligibility MMS Eligibility Broadband Proposition Travel Services Proposition MMS Proposition Best Offer Best Action Credit Risk Prediction Risk Mitigation Strategy Is there a credit risk? If so, how to respond? Value Prediction Retention Proposition 1 Churn Prediction Retention Proposition 2 Champion Challenger Retention Matrix Is there a churn risk? If so, should we invest in retention? If so, how to retain?

16. Vision for up sell opportunities

17. Group acct no Group name Group code Postcode Account type BAM/BRM Reward taken Flex account Company acct no Company name Company code Account no Account name JBU8045021 JBU8048231 SME CT3 3EQ No Boltons Marley Group JBU6821588 Marley Waterproofing MPN 07860349815 Tenure (months) First prog. award CONTRACT LOYALTIES Current tariff Agreement no ITS 252 No Net 100 R/T Marley Floors & Waterproofing Top offers for MPN are displayed. Offers take into account the call context and the caller’s decisioning authority.

18. Group acct no Group name Group code Postcode Account type BAM/BRM Reward taken Flex account Company acct no Company name Company code Account no Account name JBU8045021 JBU8048231 SME CT3 3EQ No Boltons Marley Group JBU6821588 Marley Waterproofing MPN 07860349815 Tenure (months) First prog. award CONTRACT LOYALTIES Current tariff Agreement no ITS 252 No Net 100 R/T Marley Floors & Waterproofing If no offer is made, this is recorded by pressing ‘Not offered’ button. Click on an offer to select it. The script helps the advice discuss the offer and provides a tailored justification If offer is made, customer’s response is recorded by pressing appropriate ‘response’ button.

19. Vision for Retention

22. Meeting customer demand for advice and re-assurance can help us tailor packages that fulfil their needs, but also manage our costs Advice Managing costs Managing Cost

23. Chosen save tools are added to the shopping basket Remaining balance is re-calculated Agent selects chosen save tools

24. Vision Results Conversion rates

27. Centralized Decisioning At the heart of improving “Customer Experience” Self Service Contact Center Retail Branch