Turning Data into Sales

Educational publisher Mentoring Minds sharpens marketing focus with IBM® SPSS® Predictive Analytics and Direct Marketing

Published on 25-Mar-2011

"With IBM SPSS Predictive Analytics, we can create a much more efficient and effective marketing communication to customers because now we’re talking to them about products they have a likelihood of wanting to hear about, as opposed to just sending out generic packages across the board." - Gavin Rasco, Director of Marketing, Mentoring Minds

Customer:
Mentoring Minds

Industry:
Wholesale Distribution & Services, Retail, Education, Professional Services

Deployment country:
United States

Solution:
Integrated Data Management, Business-to-Consumer, BA - Business Analytics, BA - Business Intelligence, Smart Work, Smarter Commerce, Smarter Planet, Information On Demand

Smarter Planet:
Smarter Education

Overview

Mentoring Minds, one of the nation’s premiere educational publishers, believes in the power of critical thinking. The company’s innovative and affordable teaching materials – everything from math and reading assessments to flip charts, card sets and many other teaching aids – are designed to help children think more critically while helping educators more effectively teach topics ranging from vocabulary development to the prevention of bullying.

Business need:
Mentoring Minds wanted to mine customer data in disparate systems to develop in-depth customer insights that would support more efficient and effective marketing campaigns.

Solution:
The educational publisher implemented IBM SPSS Predictive Analytics solutions, allowing the company to make confident predictions about customer buying propensities and shape personalized marketing campaigns that generate more sales.

Results:
Personalized marketing campaign in one market generated 250 percent more sales compared to traditional generic mailings. - Experienced 250% sales increase in one market using predictive modeling to create more personalized direct marketing campaign

Benefits:
- Combined customer data in 2 systems to build a complete picture of customer behavior and purchasing history - Created RFM scores for customers to focus marketing efforts on most valuable prospects - Performed market basket analysis to determine likelihood customers may purchase specific products - Posted optimal product suggestions on website based on customer propensity models - Leveraged survey data to explore new markets and better understand purchasing variables

Case Study

Mentoring Minds, one of the nation’s premiere educational publishers, believes in the power of critical thinking. The company’s innovative and affordable teaching materials – everything from math and reading assessments to flip charts, card sets and many other teaching aids – are designed to help children think more critically while helping educators more effectively teach topics ranging from vocabulary development to the prevention of bullying.

Now, with help from IBM SPSS Predictive Analytics, the Texas-based company has the power to think more critically about key issues impacting its own business: It is using statistical modeling to uncover valuable insights about customer behavior and preferences, helping the company target customers more effectively, create better marketing campaigns, and ultimately give sales a boost.

“We’re getting the intelligence we need to become more efficient sellers of our products,” says Gavin Rasco, director of marketing for Mentoring Minds. His team began deploying predictive analytics solutions – including IBM SPSS Modeler, IBM SPSS Statistics, and IBM SPSS Direct Marketing – about a year ago to mine customer data stored in disparate databases.

Efficient data mining
Mentoring Mind’s customer data is spread across a customer relationship management (CRM) system that tracks sales transactions and a marketing database that contains a rich store of demographic and other customer-related details. For a time, the marketing team tried to glean insights from the data though laborious data dumps and a lot of spreadsheet work, but with little success. “With Excel, you can only do so much,” Rasco says, but with IBM SPSS Statistics, the team has been able to rapidly extract intelligence and understand customers and prospects in greater depth.

“We’ve been able to really dig into the data in a much more effective manner,” he says. “It’s a very efficient data manipulation tool.” Using tools in IBM SPSS Direct Marketing – a module in the IBM SPSS family of Statistics products – the company has been able to perform recency, frequency, and monetary (RFM) analyses that rank customers by value, helping focus marketing efforts on the best prospects.

Analyzing market baskets
Other data mining tools – including Modeler – allows Mentoring Minds analyze customers’ past purchasing behavior to predict what they are likely to buy next. “Now we can look at a customer’s historical purchases and compare them to other customers with a similar history,” he says. “We can determine that people who bought product A and B, for example, had an 89 percent propensity to also buy product C.”

Such “market basket” modeling is helping Rasco’s team stimulate sales by tailoring its marketing messages and product offerings to appeal directly to each customer. “We can create a much more efficient and effective marketing communication to customers because now we’re talking to them about products they have a likelihood of wanting to hear about, as opposed to just sending out generic packages across the board,” Rasco says. “For example, we’re sending math directors information about mathematics, and not sending them offers about one of our writing solutions.”

Mentoring Minds also enhances its website by posting suggestions for products that the predictive models show as complementing each other. “The market basket models and purchasing history analysis helped us create offerings on our site that basically say ‘If you like this, you may also like this,’” says the marketing director.

Sparking sales
Early proof of the value of predictive analytics came when Mentoring Minds ran a pilot marketing campaign in Georgia, a state where the company recently boosted its targeted promotional efforts. The pilot measured the relative success of two kinds of marketing packages: a “control drop” that contained the same standard set of materials, and a second package that included customer-specific materials determined by the results of market basket modeling.

The results were impressive. Prospects who received the personalized packages generated two and half times more sales than the controlled group. “That was really significant for us,” Rasco says. “It really showed us that this methodology works.” The company hopes to build on that success as it eyes moving into other markets across the country. “IBM SPSS Predictive Analytics is really going to help us make effective use of marketing dollars as we look to expand the company,” he says.

Putting customer surveys to work
In additional purchasing history, Mentoring Minds gains marketing insights from customer surveys, including both online satisfaction surveys and questionnaires it circulates at conferences. By aggregating and analyzes responses with Statistics, the company is learning what motivates customers to buy and better understand the variables that can both spur and slow sales.

For example, an analysis of a recent survey of secondary school prospects identified specific deal-size thresholds that determine the type of teacher or administrator likely to be responsible for handling the purchase. Other surveys help Mentoring Minds learn more about what customers like and dislike about its products, how current trends in school funding could impact purchases, and what times during the year they prefer to receive information. “It’s a great market exploration tool and the analytics really give us quantifiable proof that we can present to management,” Rasco explains.

Next steps
Looking ahead, Mentoring Minds plans to extend the power of predictive analytics into new areas. It is currently using analytical tools to establish performance benchmarks such as the average spend per customer, the average customer acquisition costs, and lifetime customer value. The company also wants to deploy IBM SPSS text analytics tools to rapidly interpret open-ended survey responses as well as monitor blogs and other online forums to pick up on market trends and shifts in customer preferences.

One of the most promising opportunities involves the integration of IBM SPSS Predictive Analytic with IBM Cognos Express, a solution that Mentoring Minds has separately implemented to help track sales performance. “Ultimately, we’ll have this huge business analytics machine that will combine the power of predictive modeling with a rich business intelligence capability. That’s going to be awesome.”

About IBM Business Analytics
IBM Business Analytics software delivers complete, consistent and accurate information that decision-makers trust to improve business performance. A comprehensive portfolio of business intelligence, predictive analytics, financial performance and strategy management, and analytic applications provides clear, immediate and actionable insights into current performance and the ability to predict future outcomes. Combined with rich industry solutions, proven practices and professional services, organizations of every size can drive the highest productivity, confidently automate decisions and deliver better results.

As part of this portfolio, IBM SPSS Predictive Analytics software helps organizations predict future events and proactively act upon that insight to drive better business outcomes. Commercial, government and academic customers worldwide rely on IBM SPSS technology as a competitive advantage in attracting, retaining and growing customers, while reducing fraud and mitigating risk. By incorporating IBM SPSS software into their daily operations, organizations become predictive enterprises – able to direct and automate decisions to meet business goals and achieve measurable competitive advantage. For further information or to reach a representative visit www.ibm.com/spss.

Products and services used

IBM products and services that were used in this case study.

Software:
SPSS Modeler, Cognos Express, SPSS Statistics Premium

Legal Information

© Copyright IBM Corporation 2011 IBM CorporationRoute 100Somers, NY 10589 US Government Users Restricted Rights - Use, duplication of disclosure restricted by GSA ADP Schedule Contract with IBM Corp. Produced in the United States of America March 2011All Rights Reserved IBM, the IBM logo, ibm.com, WebSphere, InfoSphere and Cognos are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (® or TM), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml. SPSS is a trademark of SPSS, Inc., an IBM Company, registered in many jurisdictions worldwide. Other company, product or service names may be trademarks or service marks of others.