Data Mining On the Fly
Data mining has enabled Partners First to establish its hallmark: serving specific customer segments on an integrated basis. Says Marc Bellanger, telemarketing manager at Partners First, "What that means is from the beginning, with acquisition, all the way through to customer service, we have designed customized approaches to our customer segments."
To identify these segments, Partners First takes its prospect file seriously.
"Data mining is not an option for us," says Bellanger. "It's a core strategy. The prospect file is where the targeting and modeling begin, which for telemarketing are typically response and activation models."
Partners First works with Acxiom Corp. to develop and maintain its prospect system of more than 50 million records.
While Partners First has one mission—issuing profitable credit cards—it has many products. Marketers use predictive models to better segment prospect lists by gaining an understanding of who the best customers are for each offer. Products and offers are customized at the individual level based on a prospect's propensity to respond and be profitable.
Card marketers must balance between a campaign's profitability and response rate. If marketers don't use data mining techniques to sort through available data, they risk marketing the wrong products to the wrong customers.
Customers may take the card, but if the marketer does not sell something of value to the right prospects, they may never use the card or be profitable. Conversely, if marketers make an irresistable offer (e.g., ultra-low interest rate), its customers may sign up and use the card at record rates. However, the accounts won't be as profitable as they would be with a higher interest rate that attracts lower response.
Partners First walks a fine line to determine the acquisition offers that are most likely to elicit response while bringing the most profit for each prospect.