A large automobile manufacturer relied on vehicle discounts, in the form of cash-back incentives, to entice buyers. Though it’s a standard industry practice, this mechanism is also a costly and inefficient way to build value. Our client needed a way to gain greater insight into the buying habits and life cycle of their customer base. Our role was to help the client migrate away from product-focused marketing, and move towards an approach that centered on the individual needs and preferences of the buyer.

The client had a vast amount of customer data, and needed a creative way to turn it into knowledge and actionable insights. Our solution included three major components: (1) Customer Life Cycle, which identifies the customer’s stage within a vehicle purchase cycle to determine the customer’s buying potential (2) Segmentation, which categorises customers based on many factors, and differentiates by profit-driving behaviors and (3) Offer Optimisation, an engine that’s powered by statistical models to find the “best” offer to extend to a customer based on business goals and assorted client-supplied constraints. This engine also helps make sales forecasting and goal-setting more accurate.

This analytically driven solution has been successfully used by our client in marketing campaigns for several years. The marketing teams appreciate the practicality of a data-driven approach to the creation of incentives, and the executives prize the excellent forecasting ability they now possess. Confidence is higher that programs will deliver expected results, and campaigns using this solution generally experience a 10 – 60 percent lift in sales over control groups.

The automobile manufacturer has a better way to sell - a clearer view into the lives of its customers, an informed way to prioritise customers with the greatest potential, and a smarter way to disseminate offers and incentives.