Nagoya Railroad Co., Ltd.

Analytics used to understand customers and run targeted marketing campaigns that drive revenue

Published on 11-Nov-2013

"For the first time, we have a powerful analysis tool that doesn’t just crunch numbers — it helps us solve business problems and guides marketing efforts so that we can expand card membership and increase revenue across the business." - Nagoya Railroad Co., Ltd.

Customer:
Nagoya Railroad Co., Ltd.

Industry:
Travel & Transportation

Deployment country:
Japan

Solution:
BA - Business Analytics, BA - Predictive Analytics, Smarter Planet

Overview

Nagoya Railroad Co., Ltd., more commonly known under the brand name Meitetsu, is a leading private railroad company in the Chubu region of Japan, serving mainly the Aichi and Gifu prefectures.

Business need:
Nagoya Railroad needed a powerful business analytics solution that could help unlock the wealth of insights hidden in card usage data.

Solution:
By analyzing the immense volume of data generated by its mileage points loyalty cards and splicing it with demographic data, the company can identify patterns of behavior in different demographic groups.

Benefits:
Estimated to increase group-wide return on assets from 2.4 percent in 2010 to 3.0 percent in 2014.

Case Study

Nagoya Railroad Co., Ltd., more commonly known under the brand name Meitetsu, is a leading private railroad company in the Chubu region of Japan, serving mainly the Aichi and Gifu prefectures. Meitetsu operates a railroad line in Nagoya City that stretches approximately

450 km–the fourth-longest private railroad in Japan. With its extensive network connecting the cities of Toyohashi, Nagoya and Gifu, Meitetsu shuttles approximately 940,000 passengers every day.

The Opportunity
Nagoya Railroad Co., Ltd. (Meitetsu) operates an extensive transportation network as well as department stores, convenience stores, hotels and more. It offers a mileage points loyalty card that more than 140,000 customers use for travel and shopping. The cards generate an enormous amount of data — more than 330,000 transactions each day. But for all the data collected, the company was unable to produce meaningful insights about why, how and when customers buy. Nagoya Railroad needed a powerful business analytics solution that could help unlock the wealth of insights hidden in card usage data.

What Makes It Smarter
The chaos at a train station belies the order and predictability that can be found in the passengers’ lives: their daily routines, tastes and preferences, favorite stores and leisure activities. Nagoya Railroad looks beyond the chaos in its train stations, hotels, stores and other facilities, using sophisticated statistical analysis to understand when customers travel, where they shop, what they buy and how they might be influenced to buy more. By analyzing the immense volume of data generated by its mileage points loyalty cards and splicing it with demographic data, the company can identify patterns of behavior in different demographic groups.

For example, analysis showed that young women who regularly commute through a particular train station tend to shop at a nearby mall, buy from a specific type of store and eat at certain restaurants. With insights like this, Nagoya Railroad can segment customers, predict what they are likely to do and buy, and run targeted marketing campaigns designed to influence their spending habits.

Real Business Results
• Estimated to increase group-wide return on assets from 2.4 percent in 2010 to 3.0 percent in 2014
• Simplified the analysis process by visually representing data as a stream that can be saved, reused and modified
• Expanded the company’s network of affiliated stores and increased membership numbers with specialized insights into how to target consumers

For more information
Please contact your IBM representative or IBM Business Partner. Visit us at ibm.com/spss.

To learn more about Nagoya Railroad Co., Ltd., visit www.meitetsu.co.jp.

Products and services used

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

Software:
SPSS Statistics Server, SPSS Modeler Server

Legal Information

© Copyright IBM Corporation 2013 IBM Corporation Software Group Route 100 Somers, NY 10589 Produced in the United States of America October 2013 IBM, the IBM logo, ibm.com and SPSS are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml. This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The performance data discussed herein is presented as derived under specific operating conditions. Actual results may vary. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.